The U.S. Supreme Court unanimously ruled last week that human genes are not patentable. But it made a clear distinction between naturally occurring gene sequences and those that are created synthetically in a laboratory.
“The decision represents a victory for all those eagerly awaiting more individualized, gene-based approaches to medical care,” National Institutes of Health director Francis Collins said in a statement.
On the surface, the decision appears to benefit academic researchers and non-profit research institutions, allowing them to share genomic data more openly and freely. In addition, the decision should open up the market for genetic testing providers, increasing competition and reducing the cost of these services. Meanwhile, biotech companies who hold Myriad-style patents would appear to be the losers as the decision puts these patents at risk of being invalidated.
But how will academia and industry be affected by the decision?
“Overall, I don’t see the decision having a huge impact on academic research, or the industry, for that matter,” said James Mullen, managing partner of law firm Morrison & Foerster. Mullen counsels clients in a variety of biotechnology-related areas.
And that’s because the court upheld the patentability of modified DNA sequences, such as complementary DNA (cDNA) or plasmid and viral vectors, which may be worth significantly more in terms of future revenue than the original gene sequence. In addition, as researchers have sequenced more and more human genomes over the past few years, the patentability of naturally occurring human genes has probably already been compromised based on a lack of novelty.
For example, the decision will allow other companies to begin testing patients for the BRCA1 and BRCA2 genes, which could reduce the cost of these genetic tests thought competition. However, if another company uses methods or cDNA sequences that Myriad has patented, they would be infringing upon those patents.
Some have argued that there’s really little difference between naturally occurring DNA and cDNA made in a lab, but the court believes that the technician is, indeed, creating something new. On some level, the question of whether such genetic tools are patentable or not has been kicked down the road for another day.
Regardless, several companies have already begun announcing their plans to develop tests for the two cancer genes. For example, genetic testing laboratory Pathway Genomics has announced that it will be launching a test for BRCA1 and BRCA2 based on next-generation sequencing technology in August 2013.
“We decided to announce after the court ruling as we believe that cost-effective genetic testing should be accessible to all patients who can benefit,” K'Lene Oen, vice president of business administration at Pathway Genomics Corporation, said in an email.
The BRCA tests are Myriad’s bread-and-butter right now, making up 80% of their overall revenue. So it’s actually not a big surprise that, a day after the ruling, Myriad Genetics stocks dropped by over 17%.