Gene editing outfit Editas has been one of the most successful tech IPOs of 2016 so far, with shares skyrocketing up 130 percent shortly after the company’s public debut. But the stock has now plummeted nearly 26 percent in after-hours trading over concerns it might not be able to legally use the technology it’s built upon.
Some on Twitter believe the drop to be part of a correction, but it’s likelier due to an increasingly nasty battle over the rights to the breakthrough genome editing technique used by Editas.
Two of Editas founders, UC Berkeley’s Jennifer Doudna and the Broad Institute’s (BI) Feng Zheng, are credited with pioneering CRISPR/Cas9, a gene-editing technology that has radically advanced the biotech industry. Editas uses this technology to develop therapies to treat humans at a genetic level.
Those with a genetically induced cancer would be able to receive treatment to snip out parts of the faulty gene sequencing using this technology, for example.
Though Doudna is listed as one of the founders of the company, she left Editas two years ago to create the competing Caribou Biosciences in Berkeley, California. However, BI filed for the CRISPR patents for Zheng and was originally awarded the rights to them.
UC filed with the U.S. Patent Trial and Appeal Board two documents last week claiming rights to the tech, leading to what some experts say has caused the plunge in Editas’ stock today.The stock is still way up past 70 percent from its IPO — likely due to the high-profile roster of its many investors, including Bill Gates and Google Ventures — but the legal dispute is a definite setback for Editas that could lead to further complications down the road.
We’ve reached out to Editas for comment and will be sure to update this article if and when we hear back.