Precision BioSciences Stock Offered in IPO
In our recent article on DNA nanotechnology, we looked at a paper co-authored by George Church that refers to the “staggering” progress being made in gene editing. While it used to be that gene editing seemed to be synonymous with the acronym CRISPR, that’s not the case. CRISPR is just one of many methods one can use to edit genes. About one year ago to date, we wrote an article about “A Few Updates on the Progress of Gene Editing” which touched on a highly contested intellectual property battle that’s been taking place in gene editing. In that same article, we talked about a – now publicly traded – firm called Homology Medicines (FIXX) which believes that current approaches like CRISPR and TALENs, suffer from the following limitations:
- Unwanted on- and off-target DNA modifications.
- Inability to efficiently and precisely introduce entire gene to the genome.
- Complexity of vector delivery and manufacturing to achieve gene insertion
They’re not the only ones that think popular methods may not be the way forward. Another firm called Precision BioSciences has developed their own unique gene editing platform. And they just filed for an IPO.
Precision BioSciences Stock Offered in IPO
We last came across Precision BioSciences in our August 2017 article on The 5 “Aging” Startups Backed by Longevity Fund. Founded in 2006 with technology spun out of Duke University, North Carolina startup Precision BioSciences has taken in $135.7 million in funding from a whole slew of investors including large pharma companies Amgen (AMGN) and Gilead Sciences (GILD). The last round of $100 million closed in June of 2018 and that money is being used to develop their proprietary one-step gene editing method called ARCUS which the company specifically states “is not a CRISPR/Cas9 technology” but a collection of protein engineering methods they developed to re-program the DNA recognition properties of the natural genome editing enzyme, I-CreI.
In nature, I-CreI is an endonuclease found in the genome of the algae Chlamydomonas reinhardtii, which evolved for the purpose of carrying out a complex gene insertion edit,” says the company. They go on to say, “To apply I-CreI to genome editing in other cells or organisms, we must modify it to recognize and cut a different DNA sequence for each new application we pursue.” Each of these “cutting specifications” is a customized endonuclease created by Precision BioSciences for particular applications. They call these custom endonucleases “ARCUS nucleases.” The company says they’ve been working on this for 15 years now, and are actually able to patent their technology:
ARCUS nuclease we create is novel and, we believe, patentable. As of December 31, 2018, we have obtained U.S. patents with claims directed to three ARCUS nucleases as compositions of matter, and currently claim over 250 ARCUS nucleases as compositions of matter in pending U.S. and foreign patent applications.
While everyone argues over who owns the intellectual property behind CRISPR, Precision BioSciences has found something that they can patent and now they’re submitting a ton of patents to stake their claims.
The Benefits of ARCUS
Many people glorify Steve Jobs like he was some sort of saint, when in fact many people said he was a complete asshole to work with. We have no dog in that race, but like to mention that he once said, “the biggest innovations of the 21st century will be the intersection of biology and technology.” If you think about how gene editing works, it’s kind of like asking a programmer to go make a change to a line of code. If that programmer fat-fingers one letter, it won’t compile (won’t work). If they use a function improperly, the code will compile (appear to work) but some defect might show up down the road. You can understand how the accuracy requirements for gene editing might be equally precise.
The first advantage that ARCUS claims is that of specificity. In other words, there is a very low likelihood that the endonuclease will recognize and edit any genetic sequence other than its intended target. The S-1 filing goes on to describe other benefits that the ARCUS platform provides over existing gene editing methods. These also include:
- Efficiency – A high level of on-target editing while rarely cutting off-target
- Easy Delivery – ARCUS is very small relative to other genome editing endonucleases. As such, they believe it will be compatible with many different delivery mechanisms.
- Type of cut – The way they cut the strand is superior and helps promote DNA repair after cutting
- Programmability – The ARCUS method used to present a major challenge to re-program for new editing applications. They spent 15 years solving those challenges and patenting them.
It’s that last bullet point that stands out when you consider the squabble that’s taking place with other CRISPR companies that are trying to secure their own intellectual property. Not only is ARCUS a very difficult challenge to take on, you now have intellectual property that may make other competitors think twice about trying to mimic these methods. Of course, it’s not about having a superior platform but whether or not you can make money on it. Precision BioSciences plans to make money in the following three areas.
ARCUS for Gene Therapy
A cursory look at the S-1 filing shows that some pharmaceutical firms out there think that this platform may be quite valuable for gene therapy. The U.S. National Library of Medicine describes gene therapy as follows:
Gene therapy is an experimental technique that uses genes to treat or prevent disease. In the future, this technique may allow doctors to treat a disorder by inserting a gene into a patient’s cells instead of using drugs or surgery. Gene therapy is currently being tested only for diseases that have no other cures.
The following diagram from Precision BioSciences shows how they might conduct gene therapy using their platform.
One interested party is Gilead Sciences (GILD), an $80 billion pharmaceutical firm, that has an exclusive license to this technology to treat Hepatitis B using “in vivo gene corrections” which is a form of gene therapy where living organisms are edited to eradicate a disease. It’s something they’ve promised $445 million in possible milestone payments to Precision BioSciences along with “tiered royalties ranging from the high single-digit percentages to the mid-teen percentages on worldwide net sales of the products.” Hepatitis B has no cure and is a major threat to public health according to the WHO.
ARCUS for Cancer Immunotherapy
Another interested party is Servier, a large private French pharmaceutical company that is working on cancer immunotherapy treatments using the platform. Servier has agreed to “develop allogeneic chimeric antigen receptor T cell therapies for up to six unique antigen targets,” with up to $1.5 billion in milestone payments and a royalty structure similar to the one Precision BioSciences has agreed upon with Gilead. Here’s basically how this process could work to treat cancer patients:
While cancer immunotherapy has been a hot topic pursued by loads of companies, Precision BioSciences seems to think that their platform is the edge that’s needed. From the S-1 (our emphasis in bold):
The U.S. Food and Drug Administration, or FDA, recently accepted our investigational new drug, or IND, application for our first gene-edited allogeneic CAR T cell candidate targeting CD19 and we expect to commence a Phase 1/2a clinical trial in patients with acute lymphoblastic leukemia and non-hodgkin lymphoma in the first half of 2019. We believe this trial will be the first clinical investigation of an allogeneic CAR T therapy for non-hodgkin lymphoma. We believe our proprietary, one-step engineering process for producing allogeneic CAR T cells at large scale in a cost-effective manner will enable us to overcome the fundamental challenges of manufacturing that have limited the CAR T field to date.
Lastly, they’re working with Cargill on modifying some canola oil.
ARCUS for Food
Precision BioSciences has a wholly owned subsidiary, Elo Life Systems, or Elo, which has been collaborating with food giant Cargill – one of the largest private companies in the United States – since 2014 to produce ARCUS-optimized canola varieties that have achieved significantly lower levels (less than 4.5%) of saturated fatty acids compared to the current levels (7%). Cargill is one of the world’s largest growers and processors of canola, the third largest vegetable oil by volume after palm and soybean oil.
Other food-related projects that Precision BioSciences is working on include a low-calorie sweetener that comes from monk fruit (check out this article of that topic interests you), plant-based protein sources starting with the chickpea, and citrus varieties that are resistant to citrus greening disease.
We will soon have two publicly traded firms – Homology Medicines and Precision BioSciences – that have left the whole CRISPR intellectual property battle behind and set out on their own with gene editing platforms that are said to be better than what other firms are working on. Even if you build a diversified portfolio of all gene editing stocks available today, there’s no assurance that any of them will be able to achieve commercial success in the short or long term. If we’ve learned anything so far, it’s that there are many ways we can go about editing genes and some of the superior methods may not have even been developed yet. If the Precision BioSciences IPO goes through, shares will trade under the ticker DTIL.
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