• Bloomberg


U.S. companies racing to develop a promising gene editing technology are up against a formidable competitor — the Chinese government.

China has long set its heart on building an expertise in genomics and its government is pouring funds into a new and sometimes controversial tool called Crispr, encouraging its researchers to advance the technology. Chinese scientists say they were among the first in using Crispr to make wheat resistant to a common fungal disease, dogs more muscular and pigs leaner.

The scientific research bankrolled by the Chinese government could eventually be tapped by agricultural and pharmaceutical companies. Programs funded by Beijing are, among other things, working on disease-resistant tomatoes, breast cancer treatments and increasing the oil content in soy beans. In the southern city of Guangzhou, researchers who received government funds went a step further, sparking an international ethical debate last year after tweaking the genetic make up of human embryos using Crispr for the first time.

Formally called Crispr-Cas9, the genetic editing tool acts like a pair of low-cost and highly precise molecular scissors that can cut out unwanted sections of DNA and insert desired ones. It has revolutionized what was once a time-consuming, pricey and inaccurate process, and scientists and businesses worldwide are seeking to capitalize on this emerging technique. The expertise the Chinese groups are developing positions them to eventually challenge U.S. gene-editing companies, some of which have raised millions in venture capital.

“I would rank the U.S. and China as first and second Crispr-Cas9 research countries, respectively, at this time. Both countries have much strength in this area,” said Paul Knoepfler, an associate professor of cell biology and human anatomy at the University of California’s UC Davis School of Medicine, who recently published a book titled “GMO Sapiens,” discussing the application of gene-modifying technology on humans. “The U.S. currently gets the edge in high-profile papers, Crispr biotech and intellectual property. China has published a lot in Crispr animals.”

The Boston Consulting Group estimated in September that U.S. gene editing companies have attracted more than $1 billion in investment since 2013. Editas Medicine Inc., Intellia Therapeutics Inc., and Poseida Therapeutics Inc., are among the U.S. biotech companies researching Crispr to tackle health disorders. Editas this month raised about $109 million in the first U.S. initial public offering of 2016.

While Crispr has yet to be proven effective in creating new treatments, pharmaceutical companies worldwide see it as a potent tool. The hope is that it could potentially generate therapies for conditions from cancer to blood diseases.

A Chinese team at Sun Yat-sen University in Guangzhou last year became the first to report Crispr work in human embryos, attempting to edit a gene that causes the blood disorder, thalassemia. The study was at least partly funded by two government-run organizations, the National Natural Science Foundation of China and another called the National Basic Research Program.

The research caused an international stir, even though the scientists only used ‘nonviable’ human embryos — or those obtained through fertility clinics and without any potential for live births. Professor Huang Junjiu, who led the study, declined to comment. In publishing their findings, the Chinese researchers said that Crispr needs to be better understood and more accurate before being used in human testing.

While there is still little private investment in gene editing in China, a publicly traded Chinese company called Shenzhen Jinjia Color Printing Group Co. in a December statement said that it would provide 3 million yuan ($460,000) in funding to the university. The company, which prints cigarette boxes, has identified the health industry as a key area of growth and hopes to eventually share the rights to the Crispr-based thalassemia treatment technology, it said via email.

In the U.S., the federal government does not fund work that destroys or creates human embryos for research purposes. This month, the U.K.’s Human Fertilisation and Embryology Authority gave a group of researchers permission to conduct Crispr research on human embryos, although they still need an ethics committee to approve their plans.

Using Crispr to cure disease “is probably ethical,” said Eric Hendrickson, a professor at the University of Minnesota Medical School, whose research uses Crispr techniques for DNA repair. “To use that technology to make your child run faster or jump higher is uniformly frowned upon. The technology to do that, however, will soon be in place.”

Most of China’s funding for Crispr research is coming from the government, with very few private companies putting money into gene modification work, said Lai Liangxue, deputy director of the Southern China Institute of Stem Cell Biology and Regenerative Medicine. “Whether it’s animal or plant, our country has special funds for this aspect of work.”

Last year, the National Natural Science Foundation of China, a prominent government backed institution that funds research, awarded more than 23 million yuan ($3.5 million) to at least 42 Crispr projects, more than double the previous year. It is just one of several government institutions providing Crispr funding in China. China is also aided by a large pool of internationally trained scientists, many of whom have returned home after working overseas. The Chinese Ministry of Science and Technology did not respond to a fax seeking comment.

Backed partly by grants from the Ministry of Science and Technology, Lai, the researcher in southern China, has focused on biomedical applications of Crispr. He has given pigs genes that allow them to contract human diseases and serve as trial subjects for new treatments, or even act as potential sources of organs for human transplant.

Lai’s team also snipped a gene that inhibits muscle growth in beagles, enabling the modified dogs to have stronger muscles, run faster and jump higher than normal ones. The same technology could potentially benefit the police and military in the future if applied to canine breeds commonly used by law enforcement agencies, he said.

Part of the challenge for Chinese companies will be getting licenses to use Crispr commercially once there are patents awarded internationally. Several academic institutions in the U.S. and elsewhere have already filed patent applications for Crispr-Cas9 technology. “Without obtaining licenses from these parties, commercial applications in China or elsewhere will be hampered,” Jin-Soo Kim, a professor with the Center for Genome Engineering at Seoul National University.

Crispr has already boosted a new industry in China that supplies genetically edited animals to foreign research labs and pharmaceutical companies. Researchers in the U.S. and China also see its potential in agriculture — to potentially create disease resistant grains or better quality meat. Raising a genetically engineered pig with Crispr technology is already cheaper in China at about 700,000 yuan, while in the U.S. it could cost four or five times as much, said Lai. Labor and other costs are lower in China.

Still, Crispr-edited animals and crops in China so far remain off the market, he said, as their safety needs to be studied. In agriculture too Chinese scientists or their commercial partners will need to negotiate with the holders of the related patents and probably pay a fee to use them. In June, Des Moines, Iowa-based seed company DuPont Pioneer entered into a licensing pact with Lithuania’s Vilnius University, one of the first groups to discover the gene-editing functions of the Cas9 protein.

“If in the future we think they don’t cause any harm to the human body and can indeed increase output, they will be very useful to the development of our country’s agriculture sector,” said Lai, referring to edited animals and crops.

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