For better or worse, it now appears the Crispr system is an entire generic 'immune system' with many variants found across many species. It is not a singular exotic find. Though the most used variant of Cas9 was first found in the bacteria that causes strep throat, we've since found similarly effective proteins in all sorts of other organisms. Just a couple of weeks ago a few more variants of the system were published after being found in archaea through a large bioinformatics search.[1]
Some of the new CasX, and CasY proteins [2] in these alternative crispr systems are actually even smaller than the original Cas9 proteins. I'm not sure how related it is, but the land grab associated with a broad patent has come with a large exploration effort to find alternatively systems that still provide similar utility.
As these kind of synthetic biology tools come online there definitely needs to be some reanalysis of how the tools should comport with the patent system, it being ultimately for the public good. As what's being built today in synthetic biology is very much the nascent infrastructure, the comparison to the rollout of the internet is not an unfair comparison.
I think what pisses people off is the preponderance of insiders. People who buy Editas before the court results go public, but have enough inside information to deduce Broad would win the ruling. If you think it's impossible for insiders to figure out how a court ruling will go based on private proceedings, you're forgetting that they discovered CRISPR in the first place and are way savvier overall.
It doesn't matter if Broad loses an appeal. It doesn't matter if there is even a single therapy ever developed with Cas9. The stock jumped 29%. Every insider made huge money off information that wasn't public.
You can't go and investigate every trade, I'm not saying that. I'm just saying that's what pisses people off. It's not the public good part. Believe me, no one cares about the million other patents the MIT licensing office owns that won't make any money. Nobody even cares about your new invention that will take decades to develop.
They just care about the preposterous get-rich-quick scheme that is the stock market reacting to court cases.
I cleared several hundred percent off of call options on EDIT. I did so based on closely tracking the USPTO case, its filings, studying both sides of the argument, etc. The oral arguments made it overwhelmingly clear who was going to win.
You didn't need to be an insider to see the obvious outcome.
If you did nothing else but follow Jacob Sherkow's posts on Twitter, a novice investor could have taken his information lead, done some further due diligence, and come to the same conclusion.
That's Berkeley desperately attempting to respond to having been smoked at the oral arguments. Look at how the panel chose to respond to Berkeley trying to submit new evidence. The panel had already made up its mind by that point in my opinion. There were numerous things the panel could have pursued further after the first (and only) oral arguments, that they chose not to tipped their hand again.
Still don't like the odds involved in buying call options on EDIT? Ok, easy, hedge: NTLA also had call options available. To make matters even better, both CRSP and NTLA had sold down heavily leading up to the verdict (CRSP crashed by ~40% in a month). NTLA was available for $12 or $13 per share for the whole month prior to the verdict (it's IPO price was $22 or so). When an outcome is so dramatic for a stock as this verdict, if you hedge call options, the huge spike will trivially compensate for the downside on the other stocks.
A (perhaps stupid) question, are USPTO judgment dates public ahead-of-the-fact? In other words, how do you prevent being too early and your options expiring worthless?
No. That was certainly part of the risk calculation.
I sat on most of my calls for two to four months prior to the verdict, with most of them having a May expiration. So a few points:
1) I made some guesses on how long the verdict was likely to take based on history and based on how the case was going. For example, did they follow the oral arguments up with a round of interviews involving some of the prominent people involved. Sherkow I'll note nailed the verdict date almost exactly and provided his own reasoning for why he thought it would be in February.
2) At the time I purchased a lot of my calls, May was the furthest out date available. There was almost no liquidity (I purchased some of the first calls ever available on EDIT). Once I bought, I knew I'd need to commit or take a beating trying to unload them near-term. However, over the months, August calls became readily available (so one could have taken an opportunity to roll them; eg sell some calls on an upswing, which EDIT was prone to due to its very low float, wait for a drop, if one occurs then load the August calls at potentially cheaper than what you sold the May calls for).
3) I specifically began buying after EDIT's stock was, in my opinion, bottoming out. It went into the $40s almost right after the IPO, due to a hyper low float and lock-up (plus fuzzy understanding + hype about CRISPR at that point in time). It dropped for about five straight months from those highs. By October 1st it looked to be near a floor, so I began stalking it, it proceeded to double then triple bottom right before the election.
If you had timed it freakishly well, you could have gotten May 2017, $17.50 calls for around ~$1.75 ($175 per contract) right before the election. They peaked recently at $11.x.
4) By timing the stock itself moderately well on bottoming - that is, by paying what I considered to be a cheap price on a well sold down stock - I was able to buy the calls very inexpensively. Why did that matter? Part of the bet was that it wouldn't just stay on the floor for the coming months leading up to the patent verdict and hearing (NTLA for example rallied significantly at one point before crashing back down). By the time it was ~$18 / share, my calls had already appreciated considerably, giving me a convenient exit if I wanted it, or I could just pull my principle. I didn't need to hold through the verdict, I could just take a 100% return or so and walk. That angle helped to offset (if I wanted to sell some) the risk of being forced to wait it all out and watching my position potentially expire worthless.
I also did one other thing that ended up being extremely profitable. I sold some of my calls for a nice gain in the $18s before the verdict came out. Keeping in mind I had no idea it would 100% be in February. So let's say I sold some $17.50s for May 2017 at that point for a good profit. I took some of those gains (not the principle), and acquired even more calls than I had sold, but for the $17.50s calls for March, on a very heavy discount. I paid $1.25 or something for those in the weeks before the verdict. When EDIT spiked in the days following the verdict, those were worth six to eight times what I paid for them and they were purchased solely with prior profit (if I ended up being wrong and the verdict didn't come out in time for the March expiration, I only put my gain at risk on the May calls I sold to do that).
Some of the new CasX, and CasY proteins [2] in these alternative crispr systems are actually even smaller than the original Cas9 proteins. I'm not sure how related it is, but the land grab associated with a broad patent has come with a large exploration effort to find alternatively systems that still provide similar utility.
As these kind of synthetic biology tools come online there definitely needs to be some reanalysis of how the tools should comport with the patent system, it being ultimately for the public good. As what's being built today in synthetic biology is very much the nascent infrastructure, the comparison to the rollout of the internet is not an unfair comparison.
[1] http://www.nature.com/nature/journal/v542/n7640/full/nature2...
[2] https://serotiny.bio/api/parts/10465