The biotech industry is paying close attention to how the recent controversy over ToolGen’s gene editing patents will unfold.
On Friday, the vernacular Hankyoreh newspaper reported that Kim Jin-soo, former Seoul National University (SNU) professor, allegedly diverted patents for gene editing tool CRISPR-Cas9 to ToolGen. The report claimed that Kim did not file the SNU’s name when registering the patents although the university and the government co-developed them. It said that Kim diverted the patents to ToolGen, of which Kim is the largest stakeholder.
SNU and ToolGen claimed that the news report was groundless, saying the two shared profits and legitimately transferred the patents.
However, biotech industry officials said they were already struggling over the financial regulator’s toughening of accounting and disclosure rules since Samsung BioLogics’ alleged accounting fraud. If the Korea Exchange scrutinizes the issue of ToolGen’s patents during its review for the biotech firm’s planned listing on KOSDAQ, it will dash cold water on the entire biotech industry, observers said.
Biotech firms planning an initial public offering in the second half are paying particular attention to how the regulator will deal with ToolGen.
“Accounting is a delicate issue in the listing. The financial authorities are likely to take a very close look at ToolGen’s patents,” said an official at a biotech firm’s investor relations team. “If the company’s listing fails because of the patent issue, the biotech market will freeze again in the second half.”
More than five pharmaceutical or biopharmaceutical companies are preparing to go public in the second-half year.
They include Hana Pharm with 40 years of history, L&C Bio, DRGem, Opti Pharm, and GTG Wellness.
Researchers are raising concerns over ToolGen’s patent controversy, too.
Most of the local biotech entrepreneurs develop technologies at a university or a research lab, establish a company, raise funds through a listing, and commercialize the product. During the technology development process, they tend to share profits with a university rather than following the rules of an academy-industry joint research team.
If researchers have to consider not only R&D but technology fees, profit sharing, and accounting issues in case of commercialization, their research may stagnate, industry officials said.
“In some cases, researchers’ work can be recognized in commercial value even at an early stage. As basic research results can be applied to various fields, it is extremely difficult how to convert the research work’s value into prices,” said an executive researcher at a corporate research lab.
He went on to say, “Not many researchers can focus their work in all aspects -- R&D, technology fees, and profit sharing on commercialization. Researchers should be free of the burden of accounting issues.”