AS DIFFICULT sales pitches go, this one is hard to beat. This biotech company has burned through $75m in the past few years and has not yet started clinical work on a drug candidate. It says it will be many years, “if ever”, before it has something ready to commercialise. If this were not enough, not only is there a thorny patent thicket to manage but the firm must fight and win a case seeking to overturn its own intellectual-property claims on the ground that it was not the first to invent them.
Despite all this, shares in Editas Medicine, which filed on January 4th for an initial public offering, look set to draw great interest from investors. It will be an opportunity to buy into a revolutionary new technology called CRISPR-Cas9, which allows DNA to be cut and edited almost as easily as one might rewrite a document on a computer. Editas, spun out of the work of geneticists at the Broad Institute in Cambridge, Massachusetts, has already raised $163m from private investors and is seeking a further $100m from the markets. Its initial aim is to begin trials by 2017 on a possible treatment for a rare form of blindness
Editas is not alone in pursuing the CRISPR-Cas9 technology. Others include Caribou Biosciences, CRISPR Therapeutics and Intellia Therapeutics. There are also firms such as Bluebird Bio and Sangamo, which are further ahead with drug candidates developed using older, and clunkier, forms of gene-editing.
In the past two years about $1 billion of venture-capital financing has been invested in new gene-editing technologies, reckons the Boston Consulting Group. This reflects the promise the technology offers for producing treatments, and even cures, for a wide range of conditions—and not just those linked to mutated genes, such as haemophilia or sickle-cell anaemia. An early move to go public will help Editas stand out from the crowd, and perhaps help it recruit and retain good scientists.
CRISPR Therapeutics says it is also thinking about going public, given investors’ interest. Although enthusiasm for biotech IPOs as a whole may have cooled in the second half of 2015, Eva Haas of Hume Brophy, an investor-relations firm, says the Editas IPO is happening because it is “in a hot area and because it can.” Editas is also helped by having a stellar list of private investors, including Google, Bill Gates and Fidelity Investments, as well as three venture-capital backers, Polaris Partners, Third Rock and Flagship Ventures. (A number of other biotech companies filed to go public this week, including Corvus Pharmaceuticals, which is working on small-molecule drugs for cancer, and Audentes Therapeutics, a gene-therapy firm.)
Some startups in other areas of technology have chosen in recent years to delay going for IPOs and to raise money privately instead. However, Sam Zucker of Sidley Austin, a law firm that manages corporate transactions in biotech, says that early-stage firms in this area may be keen to go public because they want to be free from dependence on a small network of venture-capital firms. The pool of public capital they will then be able to dip into is often faster to materialise, as well as larger, than private capital, he says. Wherever the money comes from, however, Editas and other gene-editing firms will need to show results eventually.
http://www.economist.com/news/business/21685464-gene-editing-company-files-ipo-cutting-remarks?fsrc=rss%7Cbus
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