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Pharmaceuticals firms are forging alliances with biotech startups to access their gene-editing technology

Pharmaceuticals firms are forging alliances with biotech startups to access their gene-editing technology

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The genome-editing technology has shown the potential to cure life-limiting and threatening diseases. Many of the innovative startups have entered into the clinical trial phase, while some have even applied for accelerated approval of their product to the Food and Safety Administration (FDA) in the United States. Amid the growing innovation in the space from early-stage startups, genome technology has also garnered interest from large pharmaceutical firms, who are now looking to enter the space, to further accelerate their business growth. Consequently, these big corporations are either investing in early-stage startups or forging strategic alliances to access the gene-editing tools and platforms developed by startups. For instance,

  • In November 2022, Ionis Pharmaceuticals, one of the leading firms in the biotechnology space, announced that the firm had entered into a strategic partnership with Metagenomi, a United States-based gene editing firm. Notably, the collaboration with the gene-editing systems leader will enable Ionis Pharmaceuticals to expand and diversify its technology.

Under the terms of the deal, Ionis Pharmaceuticals will pay US$80 million to Metagenomi upfront. The collaboration will allow Ionis Pharmaceuticals to add DNA editing to its RNA-targeted technologies. Initially, the two firms are focusing on four genetic targets. Notably, the partnership with Metagenomi is important from a variety of different perspectives. For instance,

  • The collaboration will assist Ionis Pharmaceuticals to expand its technological capabilities, thereby allowing the firm to address more diseases and unmet patient needs. Furthermore, it will accelerate the potential for the firm to deliver gene-edited medicines.
  • The firm will also focus on validated liver targets while exploring new extra-hepatic targets. This will assist the firm to move closer to its ambition of becoming the leader in precision genetic medicines. Moreover, with the potential of gene editing technology, the firm can grow substantially over the next three to four years.

The trend of pharmaceutical firms collaborating with gene-editing startups is expected to grow significantly over the next few quarters. Already, many such partnerships have emerged in the gene-editing space. For instance,

  • In September 2022, Sanofi, another leading pharmaceutical firm, announced a strategic collaboration with Scribe, the California-based biotech firm developing gene-editing technology. Under the collaboration, Sanofi will pay US$25 million to access the CRISPR-based gene editing technology developed by Scribe. The alliance will enable Sanofi to explore and develop new cancer treatments constructed from the modified natural killer, or NK cells.

Over the years, NK cells have garnered increasing interest from cancer drugmakers as they continued to look for alternatives to T cells, which are used in CAR-T treatments for lymphoma, leukemia, and multiple myeloma. Notably, Sanofi was not able to capitalize on the first wave of cancer cell therapy development. It was led by players such as Novartis, Gilead, and Bristol Myers Squibb. However, the collaboration with Scribe indicates that the firm is now looking to make up for the lost ground, as it bets on newer technologies such as genome editing.

In addition to strategic collaborations, the trends of mergers and acquisitions are also expected to grow significantly over the next three to four years, as more and more large pharmaceutical firms continue to expand their focus in the gene-editing space. These trends have also started to emerge in the market. For instance,

  • In October 2022, Eli Lilly, one of the leading global pharmaceutical firms, announced that the firm had acquired Akuous, a gene-editing-focused firm, to further expand its presence in the new and emerging technology. Notably, the pharmaceutical giant acquired the gene-editing startup for US$610 million. The resources, global outbreak, as well as growing capabilities of the pharmaceutical giant will assist Akuous in fulfilling its mission of making healthy hearing available to all.

Furthermore, the trend of mergers and acquisitions will be also driven by the current macroeconomic environment, wherein startups are finding it difficult to raise funding from venture capital firms. This will present more acquisition opportunities for larger firms that are looking to capitalize on the early-stage gene editing development from these innovative startups.

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