Editing the Software

of Life, for Fame

and Fortune

One lab spawned two startups hoping to dominate the booming world of genome editing. But the DNA-hacking wars are just beginning.

On a fall day in 2011, Jennifer Doudna was in her office at the University of California, Berkeley, chatting with one of her graduate students. She and the student, Rachel Haurwitz, had been investigating a seemingly arcane topic — how bacteria fend off invading viruses. They had homed in on a particularly interesting family of bacterial proteins, and were starting to dream a little.

“I think these proteins are going to be very useful,” Doudna told Haurwitz. She proposed that they start a small business selling them to researchers. Haurwitz leapt at the chance. “She had no hesitation, said, let’s do it,” Doudna recalls.

The proteins in question had an amazing attribute: they could slice through DNA at precise locations. Doudna envisioned a world in which any scientist working with living organisms might use these proteins to make controlled cuts in a genome to modify its function. They could come in handy in altering the microbes used to generate biofuels, or tailoring the animal models that test out new drug compounds, or tweaking the plants that produce our food, among other things.

Haurwitz was already pondering the end of her academic career and had started taking classes at the business school. “I knew all along that I wanted to end up in industry but didn’t know how, I hadn’t spent enough time worrying about it,” Haurwitz says. The opportunity to lead a company spinning out of her hotshot adviser’s lab sparkled with potential.

Their optimism was justified. Doudna and Haurwitz launched Caribou Biosciences in October 2011. The following summer, Doudna and her collaborators published a landmark paper that would catapult these proteins to fame, making them the hottest story in molecular biology.

Along with her collaborators and students, Doudna demonstrated that a protein called cas9 could be engineered to easily cut through DNA at precise locations of the scientists’ choosing. The key word was easy. If genome editing was once akin to performing dental surgery, it had almost overnight become more like squeezing toothpaste out of a tube. “It was pretty clear this was going to be an exciting technology, but I didn’t know how huge it was going to be,” Doudna says. Numerous other labs immediately began expanding on the technique.

Awards started to pile up. In 2014 a group funded by Silicon Valley elites (Sergey Brin and Mark Zuckerberg are just two) gave Jennifer Doudna and a collaborator, Switzerland-based Emmanuelle Charpentier, the Breakthrough Prize in Life Sciences, along with $3 million each. Another key figure in the cas9 world, Feng Zhang, a professor at MIT and the Broad Institute, won the highest prize awarded by the National Science Foundation. Many people predict that a Nobel Prize is only a few years away.

Fueling the excitement is the possibility that wielding this protein might allow clinicians to fix genetic defects and alleviate human suffering. But no university lab can bring those end goals into view on its own. Companies must step in to create life-changing, real-world products.

Caribou was the first startup to appear, and it set to work developing tools to make genome editing even more straightforward. Soon the other key scientists in this world were also launching companies, but with medicine in mind. Doudna, Zhang and several exalted scientists in Cambridge, Massachusetts, started Editas Medicine to investigate treating human diseases with genome editing. (Doudna later pulled out, citing the burden of travel.) In Switzerland, CRISPR Therapeutics also formed around the same goal, with Charpentier as a founder. And in the fall of 2014 Caribou cofounded its own therapeutics startup, Intellia, and placed a venture capitalist at its helm.

The new companies are all racing to improve human lives through cas9 genome editing. The startups’ most pressing concern, however, is nowhere near as lofty. Before this DNA-hacking revolution can reach its zenith, they must resolve once and for all who is the rightful owner of the technology.

Zhang already holds the first of several vital and broad patents covering cas9 genome editing. Yet Doudna and Charpentier had filed patent applications covering similar ground earlier than Zhang. In April, the Regents of the University of California filed a request with the United States Patent and Trademark Office (USPTO) to reconsider Zhang’s patents. The office is unlikely to rule soon.

The uncertainty has not stopped venture capitalists and pharmaceutical companies from snapping up deals with the warring genome-editing startups. “It’s a gold rush. It’s a tsunami. This pace is rare,” says Rodolphe Barrangou, one of the first scientists to decipher this bacterial defense mechanism, a co-founder of Intellia and a member of Caribou’s board of advisers. “You see some of the smartest investors in the world putting tens of millions into almost nothing: great names and founders, but no tangible assets, no products on the market, sometimes they don’t even have CEOs. They’re putting millions of dollars on a case, on an argument, on future potential.”

It’s even more a gamble given the unresolved intellectual property (IP) issues. Haurwitz, for one, is undaunted. “We believe we have a very strong position within that landscape, and our partners have made that bet as well,” she says. Even so, a patent feud can only be an unwelcome distraction.

Biotech enthusiasts refer to this moment in science as the “democratization of genome editing,” because almost any curious biologist can start to dabble in it using cas9. With Caribou, Doudna and Haurwitz had set out to make that promise real, by developing this form of genome editing into a more mature, reliable technique. Instead of devoting all their energies to ushering in this genetic renaissance, however, they are stuck doing the opposite of democratization: fighting for legitimacy in front of the almighty USPTO. Lives are in the balance. As are fortunes.

In the beginning, of course, there was science — research biologists doing their jobs, prodding bacteria and seeing what happens. They had no idea that doing so would fuel a boom in DNA hacking.

Doudna and her collaborators were studying a self-defense system that kicks in after a virus first attacks a bacterium. If the bacterium manages to clobber its invader, the cell then tucks away a memento of its opponent. It nabs a piece of the virus’s DNA and slips it into a special section of the bacterium’s own genome. This reference library is demarcated by distinctive sequences known as CRISPRs.

If another copy of that virus infiltrates again at some later time, the accosted cell can now launch a swift defense. This bacterial jiu-jitsu centers around none other than cas9, the protein Doudna was studying. It patrols the cell armed with a sequence of RNA corresponding to viral DNA stored in the library. The bit of RNA serves as a guide for cas9 to recognize an old foe, slash its genome and disable it. (In bacteria this system involves a few more steps, making it challenging to manipulate in the lab.)

Many biologists had wondered whether this protein’s genome-cutting powers could be used to sculpt DNA, whether to repair genetic errors in humans or, say, cultivate better biofuels. Evolution had produced a cumbersome system, but Doudna and her team found a simpler way forward. As they showed in a paper published in the summer of 2012, cas9 and its RNA sidekick can be easily customized t0 seek out any spot in a genome, opening up the possibility of adding, subtracting or repairing sequences of DNA as desired. Within six months a flurry of labs began showing how cas9 could tailor any living thing’s biological fabric — not just bacteria. Scientists theorize that cas9 could lead to a cure for HIV, cystic fibrosis, immune disorders, Huntington’s disease, and many other ailments.

All of a sudden things got crazy. Now molecular biologists like to say that they can edit DNA with almost as much ease as software engineers can modify code, because the increase in speed has been so dramatic: a process that used to drag on for months could now be whipped together in weeks. “So many people now have the ability to modulate the genome — any molecular biologist can do it,” says Enal Razvi, a biotech analyst at Select Biosciences.

Inevitably, the big money started rolling in. In an article in this month’s edition of the journal Current Opinion in Virology, the authors estimate that companies using cas9 for gene therapy-related applications have raised more than $600 million since the beginning of 2013. Major pharmaceutical companies are getting in the game, but among the startups that have clustered around these top-notch scientists, the biggest winners so far have been CRISPR Therapeutics, which announced on April 29 that it had raised an additional $64 million (for a total of $89 million), and Editas Medicine, with $43 million in Series A financing. For Intellia and Caribou — the elder statesman of the group—getting funding was more complicated.

Seated in her sun-filled office on UC-Berkeley’s campus, Doudna reflects on the mini-dynasty that has emerged from her work. By some measures the trim, smartly dressed scientist’s two companies are at a disadvantage. Her name is not on the key patents, the ones held by Zhang. And Caribou and Intellia have not soaked up as much funding as their competitors — at least not publicly.

But Caribou has always been different from the rest. It’s the only one of these startups not focused on developing human treatments. Instead it has set out to hone the quality of the genome editing technology, creating tools that make it more reliable and useful across industries, not only in medicine. Perhaps as a result, funding was initially harder to come by. “It was clear that venture groups were not interested in tools, and if we did find something, they would want to extract a big piece of it in return,” Doudna says. So at first she eschewed venture capital.

Rachel Haurwitz, CEO of Caribou Biosciences

At the time of Caribou’s founding, in 2011, neither she nor Haurwitz had any experience with starting companies, so their ambitions were relatively modest. They reached out to QB3, a biotech incubator in Berkeley. QB3 had just launched a new program called Startup in a Box to help professors, among other first-timers, navigate the challenges of writing business plans, dividing up equity, and getting incorporated.

Caribou was in the first batch of companies to try out Startup in a Box. QB3 advised Doudna and Haurwitz on their business plan, paid their fees to incorporate and paired the two scientists with students in the business and law schools, who provided free advice. “It was very, very helpful, especially when you know nothing,” Doudna says. Haurwitz’s fiancé came up with the name Caribou — a portmanteau of cas9 and ribo (as in RNA). “Through QB3 we wrote up a short description of what we’d envisioned, then we jumped on BART and incorporated the company,” Doudna recalls.

Doudna gave an exclusive license of her lab’s IP to Caribou. “That was an important moment because it gave a lot of credibility to the company,” she says. Without big piles of cash as a public stamp of approval, the license would have to do.

She kept venture capitalists at arm’s length for another reason, too. VC firms often oust rookie leaders in favor of their own people. “I really didn’t want Rachel to be removed as CEO,” Doudna added. “That was a real tendency among the more traditional venture firms. One of the problems in the biotech world is the lack of women in leadership roles, and I’d like to see that change by walking the walk.” To cope with the lack of funding, Doudna hired Haurwitz as a postdoctoral student. They rented lab space on the ground floor of Doudna’s building on campus, where Haurwitz began working alone, trying to figure out what Caribou might become. They lined up two small grants and donations from family and friends, totaling $150,000.

The slow start suited Haurwitz fine. “To go from zero to hero, with venture backing and a 50,000-square-foot space, you don’t get a chance to experiment,” Haurwitz says. That summer, in 2012, Doudna and her collaborators published the paper that kicked off the genome editing frenzy. Haurwitz immediately set to work developing the discoveries further. “We were well-placed when the cas9 work really popped,” she says.

The following spring Caribou set up its labs in a former Twinkies bakery that it rented from QB3, and started hiring. They decided they would work like a SWAT team, by teaming up with companies with specific research needs. The first such partnership came in January 2014 from the pharmaceutical giant Novartis, which wanted Caribou’s technology to help identify new potential drugs. “A lot of the work that’s necessary is to layer on rigor and robustness. Quite frankly, there’s not a lot that’s super exciting there,” Haurwitz explains. “It’s not what a graduate student is going to get a Ph.D. in, but it’s absolutely necessary for commercialization.”

That boring work is essential for tapping into the full promise of cas9-based genome editing. Most of the early buzz around cas9 has focused on its potential for restoring human health. Yet large companies, including Dupont Pioneer, are trying to edit the genomes of crops such as soy and wheat to make them disease-resistant and to make farming more efficient. Other corporate research labs are investigating using cas9 to produce green chemicals or new biofuels. The technique might also let scientists engineer mosquitoes that don’t spread malaria. And George Church, one of the scientists involved with Editas Medicine, is even tinkering with elephant genomes to morph their DNA into that of a woolly mammoth — and potentially bring those behemoths back from extinction. “We’re talking about a rare appeal across business segments. You see biotech, pharma, agriculture, and food,” says Rodolphe Barrangou, the Caribou scientific advisor. “It’s very rare for a technology to span concurrently a lot of interest in different business segments.”

The team of 22 at Caribou aims to find its way into all those sectors, and in April it finally announced its first $11 million in funding. It’s also furiously building up a broader portfolio of intellectual property, should the USPTO rule against Doudna. “We have positioned ourselves differently from every other CRISPR company right now,” Haurwitz says. “We are set up as a platform technology, with the understanding that we can go across many different markets, including agricultural and industrial applications.”

Nessan Bermingham, CEO of Intellia Therapeutics

As the Carib-ians were gaining momentum, Nessan Bermingham, a partner at a fund called Atlas Ventures, says he was working with Emmanuelle Charpentier, one of the co-authors on Doudna’s trend-setting 2012 paper, to launch CRISPR Therapeutics, based in Switzerland. “After reading that 2012 paper, for me it was ‘this is really interesting, this is a very surprising discovery,’” Bermingham recalls. But he wasn’t sold on the direction CRISPR Therapeutics was taking, and he felt a need to tap into the rich biotech scene in Boston, with its swarms of scientific and business talent. “I came to the conclusion that for us to do this in a position for success, we needed to start a company from scratch in Cambridge, Mass., and bring a team to the table that had deep drug discovery expertise.”

He started talking to Caribou, whose leaders were also feeling the allure of tackling genetic disorders. At the end of 2014 they teamed up to found Intellia Therapeutics with $15 million. “Here at Caribou we could build the best team for platform advancement. And Intellia could tap the talent pool in Cambridge,” Haurwitz says.

In April, five months after its launch, Bermingham approached Doudna about joining as a founder. She hesitated, and surveyed the startup landscape before committing. “In my opinion Intellia has built the best team,” she says. “It’s a really great group of people all rowing in the same direction, which has been an issue for some of the companies in this space.” (This is an oblique reference to rumors that the other CRISPR companies are in disarray.) And in another bury-the-lead comment, she notes that the publicly available figures don’t include an undisclosed but “very respectable” sum from a January deal with Novartis.

Bermingham says that Intellia will initially tackle approaches in which a patient’s cells are extracted, modified and returned to the body (so diseases affecting blood cells are a prime target). Any successful therapy is likely to be at least a decade away, however, so one could argue that these sister companies and their founders are hedging their bets. By straddling different sectors, and operating across different time scales, the two companies can take advantage of opportunities arising today while still gambling on the possibility of discovering a blockbuster treatment.

But first, the IP question looms. Bermingham, like Haurwitz, brushes off the concern. “To me, this is the fundamental question: do we want to spend our money dealing with IP and litigation, or developing products for patients? For me it’s the latter.”

Biotech watchers note that the patent ambiguity faced by these companies is not unique. Skirmishes around the IP for a technology known as RNA interference, which emerged from the human genome project, were eventually resolved through licensing deals between labs that let them share the spoils of their work. “My hope is that they resolve the disputes among themselves, and hopefully enter into some kind of cross-licensing agreement,” says Jacob Sherkow, a professor at New York Law School who specializes in patents. “That seems to be what’s happened in the past for huge biotech breakthroughs.”

Enal Razvi, the analyst at Select Biosciences, takes an even longer view of the situation. He is circumspect about these startups’ chance of success. “The first wave of therapeutics companies always fails. They all fail. Their expensive, hard-learned lessons are fodder for second and third generations,” he says.

Whether that rule of thumb holds in this case may take years to shake out. Perhaps Caribou, the lone company to not pursue human treatments, will be an exception. And perhaps Intellia will get lucky and discover a safe, effective treatment to an otherwise devastating disease. But the longer the patent feuds drag on, the longer it will be before society reaps the extraordinary rewards dangling before it. There isn’t a second to lose.

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Illustrations by Camilla Perkins