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As top court invalidates some gene patents, biotech has moved on

By Sharon Begley

NEW YORK (Reuters) - The U.S. Supreme Court decision on Thursday to uphold patent protections for genetic material that has been changed in the laboratory but invalidate patents for purely natural DNA may seem like a partial setback for the biotech industry, but experts said it isn't: the industry has already moved on.

"There are literally tens of thousands of patents claiming DNA that we would not consider to be a product of nature," and which therefore are fine according to Thursday's decision, said Gregory Graff, a professor at Colorado State University who led an analysis of gene patents published last month in Nature Biotechnology.

One common form of DNA that has been manipulated in the lab and so is eligible for patenting, is called cDNA (the "c" stands for "complementary"). It is essentially an edited form of a gene: extraneous stretches of DNA have been excised.

It was cDNA that launched the biotechnology revolution in the 1980s and that has since fuelled the rise of multibillion-dollar businesses in gene-based medicine and agriculture, from Pfizer Inc to Monsanto.

Pharmaceutical companies use cDNA to produce proteins such as insulin and human growth hormone.

Although those original patents are now so old they have expired or are about to, the Court's decision leaves the door open to patenting other synthetic genes to make new medicines, said Robert Field, a professor of law at Drexel University.

NO SIMPLE GENE PATENTS

The legal protections that support today's DNA-based industries have also moved well beyond the simplest gene patents that referred only to the chemical sequence of a gene (a combination of the letters A, T, C and G). The shift has come largely since the Human Genome Project unveiled the entire 3-billion-letters-long human DNA sequence in 2003 and put it in the public domain.

"For human medical applications, that prototypical gene patent is a thing of the past," said Hans Sauer, general counsel at the Biotechnology Industry Organization, which sided with defendant Myriad Genetics in the case.

Instead, companies "are moving into making proteins and antibodies that closely mimic what is naturally found in the body," said Bill Gaede, an attorney with McDermott Will & Emery LLP in Menlo Park, California. If those disease-fighting compounds are tweaked even slightly, they can be patented.

Both DuPont's Pioneer Hi-Bred division and Monsanto hold patents on synthetic DNA molecules that make insect-killing proteins designed to increase a crop's ability to withstand pests, said Colorado's Graff. And Roche Holding AG's Genentech, as well as Novo Nordisk, hold patents on the DNA they have constructed to make bacteria churn out human hormones or vaccine antigens.

GENE-BASED TESTS

Another lucrative new DNA-based product that remains untouched by the Court decision is called "companion diagnostic." Recent advances in cancer treatment have come from drugs that target a genetic mutation that fuels the malignancy. Because the drugs work only on tumors that have that mutation, it is crucial to test a patient for it before using the drug.

Abbott Laboratories, for instance, makes the companion diagnostic for Pfizer Inc's lung cancer drug, Xalkori. The medication targets a gene mutation called ALK; Abbott's test determines if a patient has the mutation and is therefore likely to be helped by the drug.

But Abbott did not patent the ALK sequence. "Another company could develop an ALK test using different technology," said spokeswoman Darcy Ross. Abbott's DNA-related patents, which are unaffected by the Court's decision, "are primarily directed to detecting sequences and not the sequences themselves," she said.

The companies most likely to suffer from the decision are small biotechs that have yet to develop a product and so raise money from investors based on their gene patents.

"This was the only way some of the early genetics-based companies could survive," said Michele Wales, an attorney who specializes in patent law. Keeping a company afloat based on basic gene patents will now be more difficult, if not impossible, said Wales, a former employee of Human Genome Sciences, one of the largest gene-patent holders, which was acquired by pharmaceutical giant GlaxoSmithKline last year.

(Additional reporting by Diane Bartz and Bill Berkrot; Editing by Michele Gershberg)

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