Turning Point in Global Gene-Editing Therapeutics Patent Battle: Why Did ToolGen Shares Surge?

As the United States Patent Trial and Appeal Board (PTAB) has sided with the Broad Institute of the United States in the global gene-editing technology patent dispute, shares of the Korean company ToolGen have surged. Despite the ruling being interpreted as an unfavorable outcome in the context of the patent competition, the market has responded positively, drawing attention to the reasons behind this reaction.

Industry insiders point out that the background for the stock price increase is the fact that the patent dispute over gene-editing therapeutics, which has been unfolding as a "three-way race," has reached a turning point. With the long-standing dispute partially clarified, allowing for greater predictability regarding future rights and revenue structures, the uncertainty surrounding the patent landscape has been somewhat resolved.

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According to the pharmaceutical and biotech industry on March 30, the PTAB has ruled in favor of the Broad Institute in an interference proceeding remand between the UC Berkeley-Charpentier (CVC) group and the Broad Institute over the "fundamental technology" of applying CRISPR-Cas9 gene-editing technology to human cells. The decision recognized the Broad Institute's priority, determining that it was the Broad Institute-not CVC-that first developed the core technology to successfully operate gene-editing in human cells.

This ruling could be interpreted as an unfavorable outcome for ToolGen, as the company has also been seeking to secure fundamental technology rights by filing related patents. However, on the same day, ToolGen's share price rose by approximately 20% compared to the previous day.

Industry analysts suggest that investors have focused on the fact that the direction of the patent dispute has become clearer. Previously, it was difficult to predict commercialization prospects or royalty structures due to the lack of clarity regarding patent ownership. With this ruling, a major direction has been established, enabling investors to make informed decisions.

A ToolGen representative explained, "With the conclusion between Broad and CVC, the next stage of ToolGen's own interference proceedings, which had been delayed, can now move forward. The resolution of uncertainty has been reflected in increased market expectations."

An interference proceeding is a process to determine who made an invention first when there are multiple applicants for the same technology. The first phase involves organizing claims and evidence, followed by a second phase to determine the actual date of invention. ToolGen has already passed the first phase, but entry into the second phase had been delayed due to appeals between CVC and the Broad Institute. The likelihood of the second phase resuming has increased with this decision, which is believed to have contributed to market optimism.

Expectations that the focus of gene-editing technology patent competition will gradually shift toward applied technologies also appear to have influenced ToolGen’s share price rise. ToolGen holds patents related to RNP (ribonucleoprotein) delivery technology, which plays a crucial role in the commercialization of gene-editing therapeutics.

If RNP delivery technology becomes an essential component in therapeutic development, it is possible that an additional royalty structure could emerge independently from fundamental technology patents. In this scenario, global pharmaceutical companies developing gene-editing therapeutics would need to sign separate licensing agreements with companies holding RNP technology patents. The only gene-editing therapy approved by the U.S. Food and Drug Administration (FDA), "Casgevy," is also reported to utilize RNP technology. ToolGen is currently pursuing related litigation against Vertex Pharmaceuticals, the developer of Casgevy, among others.

CRISPR-Cas9 is a technology that precisely cuts and edits target genes. It is considered a "game-changer" in the treatment of intractable diseases such as sickle cell anemia. As it can fundamentally eliminate the cause of a disease with a single treatment, it is attracting attention as a next-generation gene therapy technology.

The patent dispute over CRISPR-Cas9 technology, which is central to gene-editing therapeutics, has continued since the early 2010s. The litigation has centered on the CVC group, which clarified the basic principles of the technology, and the Broad Institute, which implemented it to function in human cells. ToolGen has also participated in the dispute by filing related patents ahead of others. According to global market research firm Mordor Intelligence, the gene-editing therapeutics market size is projected to soar from $4.53 billion (about 6.8371 trillion won) in 2025 to $11.23 billion (about 16.9494 trillion won) by 2030.

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