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The Thrilla in Virginia: The CRISPR Battle Comes to a Crispy Head

The patent fight billed as the “Ali-Frazier Fight of Biotech,” and a “clash of titans,” and the “last great priority dispute of the ‘first-to-invent’ era of US patent law” (um, okay, that final image is perhaps less evocative) had its first and only hearing before judges yesterday—and the line to get a glimpse of the brief proceedings wound its way around the lobby Christmas tree in the U.S. Patent and Trademark Office building in Alexandria, Virginia (a view of which can be found here, in lawyer Jacob Sherkow’s enthusiastic Twitter feed).

The battle, as I mentioned in my Oct. 26 post, is over who invented the revolutionary gene-editing technique known as CRISPR–Cas9. On one side are the Regents of the University of California and the University of Vienna (representing scientists Jennifer Doudna and Emmanuelle Charpentier, respectively); on the other is the Broad Institute of MIT and Harvard University (representing Feng Zhang). And, as I noted in the earlier post, the stakes are positively enormous, potentially affecting billions of dollars in future revenue, to say nothing of the valuations of several companies that have already launched to take advantage of this approach.

Doudna and Charpentier filed their patent applications first. Zhang filed later but managed to expedite his application and was actually awarded the patent. Team Doudna and Charpentier then filed what’s called an “interference” to invalidate Zhang’s claim—which was put in motion (er, “declared”) by the USPTO in January. (There’s more here on that Declaration from biotechnology patent lawyer Kevin Noonan at the terrific site Patent Docs.

No one doubts that Doudna and Charpentier announced their CRISPR–Cas9 discovery first—a revelation that ignited excitement in the scientific world. (Just do a Google search for “biotech discovery of the century.”) At issue is where they demonstrated CRISPR’s utility—in bacteria—and what that implies. Zhang, by contrast, showed specifically how the technique could be used in the more complex (eukaryotic) cells of rhododendrons, rodents, and humans. And the question now before the USPTO is whether Zhang’s discovery was an “obvious” extension of Doudna’s and Charpentier’s, or something truly novel and—if anything—more relevant to the bulk of scientific and medical applications now in the works. (The aforementioned Sherkow, an associate professor at New York Law School, has a great take on the cinematic twists and turns of the case—including some curious legal strategies and the mysterious role of an anonymous third party—at Stanford Law School’s infrequent but excellent Law and Biosciences Blog.)

To read the tea leaves—which is to say, the seemingly skeptical questions by the judges to the UC lawyers—Team Doudna/Charpentier had a rough day yesterday. The sense (again, to those who were interpreting questions and tone) was that the judges were less hospitable to the notion that Zhang’s work was a mere (and direct) extension of the UC team’s.

But whatever the merits of this specific case—and however the three judges rule—there is a broader issue that speaks to the reason we have patent laws in the first place. The ultimate aim of these invention protections is to accelerate the process of discovery and to expand the scope of public knowledge as quickly as possible.

One hopes that, whatever the USPTO decides in the Thrilla of Virginia, it doesn’t put a chill on scientific sharing. The biggest danger is that researchers will end up feeling ever warier of publishing their findings until they have the widest potential application. Why tell people where the oasis is, after all, if others will rush ahead to fence it off? Importantly, that’s NOT what I’m suggesting that either party has done in this case. But if that’s the message that comes out from the CRISPR ruling, then all of science will have lost.

More news below.

Clifton Leaf
@CliftonLeaf
clifton.leaf@fortune.com

DIGITAL HEALTH

Could IBM Watson be deployed against cyber crime? Add another possible advantage to IBM supercomputer Watson’s bag of tricks: fighting cyber attacks. Sandy Bird, CTO of IBM Security, says that the company is testing out a beta program in conjunction with 40 different organizations, including health care outfits like the University of Rochester Medical Center. The goal is to see whether Watson’s machine learning capabilities can turn it into a weapon to assist cyber security experts who must deal with massive amounts of data and the changing behaviors of cyber criminals. And the trend is one that IBM expects to grow substantially in the coming years. “Customers are in the early stages of implementing cognitive security technologies,” said Bird. “Our research suggests this adoption will increase threefold over the next three years, as tools like Watson for Cyber Security mature and become pervasive in security operations centers. Currently, only seven percent of security professionals claim to be using cognitive solutions.” (Healthcare IT News)

TiGenix aims for $43 million IPO to help fund its stem cell therapy. Belgium-based biotech TiGenix has filed for a NASDAQ IPO that could net it about $43 million. The money would be used in part to help fund a late-stage clinical trial of TiGenix’s Cx601, a stem cell therapy being tested in the inflammatory condition Crohn’s disease. The treatment has already shown promise in phase 3 studies in Europe, and TiGenix has even partnered up with Japanese pharma giant Takeda thanks to its merits. But the biotech wants to launch a second phase 3 trial in the U.S. in the first half of 2017—hence the decision to file for a NASDAQ listing. (FierceBiotech)

A former Novartis exec is joining Carl June’s cell therapy biotech. Pharma giant Novartis made a splash several months back when it announced that it would be shuttering its Cell and Gene Therapies unit. Now, that unit’s former chief, Usman “Oz” Azam, will serve as CEO of startup Tmunity Therapeutics, an outfit launched by world renowned geneticist and scientist Dr. Carl June. Tmunity is aiming to develop cell-based treatments (particularly those that use the body’s immune cells to fight various conditions). “I have had the opportunity to pursue the development of novel drugs and biologics for nearly 20 years but I have never been more excited about the potential we have at Tmunity to make a significant contribution to the treatment of cancer, HIV, and autoimmune disease by delivering the promise of T cell medicine,” said Azam in a statement. (Endpoints)

Heal raises $14.8 million in Series B for a “house call” app. Los Angeles-based tech firm Heal has raised nearly $15 million in a Series B funding round to help support commercialization of its eponymous house call app, which can be used to summon doctors for a home visit in order to treat relatively simple conditions like the flu or minor sports injuries. The app is already aligned with major California insurers like Blue Shield of California, Anthem Blue Cross of California, Cigna, UnitedHealth, and others, making the payment process much simpler for in-network customers. Heal has raised nearly $55 million in funding to support the app to date. (MobiHealthNews)

INDICATIONS

Global drug spending will hit $1.5 trillion by 2021. A new QuintilesIMS report finds that total topline global drug spending will reach a record $1.5 trillion over the next five years. But, interestingly enough, this is actually somewhat of a positive development. After years of outsize growth in drug spending, the level of inflation has actually begun to go down in 2016, possibly falling to half the level of 2014 and 2015 spending growth. The reason for the projected decline is major pushback in U.S. and European markets against high drug prices for new specialty therapies such as next-gen hepatitis C cures from companies like Gilead. But novel medicines in the cancer, diabetes, and autoimmune spaces will continue to cost a pretty penny and put strain on health care payers, according to the report. (Fortune)

21st Century Cures is slated to pass today. After sailing through the House of Representatives last week, the Senate is expected to give final approval to the 21st Century Cures Act on Wednesday. The chamber made some minor tweaks to the legislation yesterday—including renaming a portion of the bill for Vice President Joe Biden’s late son Beau Biden, who died of brain cancer last year (Cures includes funding for Biden’s Cancer Moonshot program)—before invoking cloture in a procedural vote. Expect to see the landmark legislation pass with little adulteration from the House-passed version, and stay tuned for my report on how even the bill’s advocates in the patient community have some disappointments with its final iteration.

Britain fines Pfizer record $107 million over a huge drug price hike. U.S. pharma giant Pfizer is feeling some heat on the other side of the pond as U.K. competition watchdog the Competition and Markets Authority (CMA) slammed the company with a $107 million fine. The reason behind the stiff penalty? According to the CMA, Pfizer and closely-held Flynn Pharma hiked the cost of an epilepsy medication by 2,600%, taking advantage of the fact that the drug’s price could be hiked with impunity once it lost its branded status. “The companies deliberately exploited the opportunity offered by debranding to hike up the price for a drug which is relied upon by many thousands of patients,” said Philip Marsden, chairman of the CMA’s case decision group, in a statement. “This is the highest fine the CMA has imposed and it sends out a clear message to the sector that we are determined to crack down on such behavior.” (Fortune)

THE BIG PICTURE

Donald Trump says he’ll bring down drug prices, sends biotech into a tailspin. President-elect Donald Trump, who has just been named Time’s Person of the Year, told the magazine that he plans to fight high drug prices once he takes office. “I’m going to bring down drug prices. I don’t like what’s happened with drug prices,” he said. Of course, exactly how that will happen is the billion dollar question. Trump has previously voiced some support for Medicare drug price negotiations and allowing for the importation of medicines from Canada and other countries with cheaper treatment tabs. But those proposals would likely face a difficult time in a GOP-controlled Congress. Biotech stocks and index funds plunged on Trump’s comments. (FortuneTime)

Hospitals warn of job cuts, billions in losses if Obamacare is repealed. Some of America’s biggest hospital lobbying organizations are warning President-elect Trump that a repeal of Obamacare—and particularly its expansion of the Medicaid program for poor Americans—will lead to big job losses and even hospital closures if other replacement measures aren’t put into place. Losing a gigantic number of insured customers could cost hospitals about $165.8 billion from 2018 to 2026, the groups contend, urging Trump and the incoming Congress to maintain coverage expansions and restore other types of funding like “disproportionate share hospital” payments for medical providers that treat a high number of low-income and uninsured people. (Modern Healthcare)

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Produced by Sy Mukherjee
@the_sy_guy
sayak.mukherjee@fortune.com

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