The decision had long been expected, and it did disappoint many.
Industry reactions have come strong and fast since the European Court of Justice ruled that gene-editing methods should fall under the same rules as GMOs, which are subject to stringent regulation across the bloc.
“It is now likely that much of the potential of these innovative methods will be lost for Europe – with significant negative economic and environmental consequences,” commented Garlich von Essen, secretary-general of the European Seeds Association.
Sarah Schmidt, of the Institute of Molecular Physiology in Düsseldorf, even said that “the ruling of the European court of justice… is the death blow for plant biotechnology in Europe.”
Private equity investors exposed to the sector, however, have reacted more calmly. “We weren’t surprised by the decision, even though we’d gone into the ruling being hopeful,” said Ben Belldegrun, a managing partner and co-founder at Pontifax AgTech.
His firm recently doubled down on the technology through backing the $110 million Series B funding round of Precision BioSciences, a gene-editing business with a subsidiary dedicated to ag and food. It had previously invested in the $10 million Series A of Tropic Biosciences, a UK-based plant-breeding business that uses gene editing to develop tropical crops.
Tale of two markets
Gene-editing techniques differ from their decades-old ancestors in that minute changes are applied to a species’ own genome, rather than importing foreign DNA into plant cells, as is often the case with GMOs. They are also much more precise than earlier techniques, were random genetic mutation were provoked through exposure to radiations and other perturbations.
Those two characteristics – which make gene-editing more efficient and more natural than predecessors proponents argue – had led many to hope that the EU would not categorize them as GMOs and apply much softer regulation. That included US Secretary of Agriculture Sonny Perdue, who condemned the ECJ ruling and said Washington would take a very different path.
“The global regulatory treatment of genome-edited agricultural products has strategic innovation and trade implications for US agriculture,” he noted. “In light of the ECJ ruling, USDA will re-double its efforts to work with partners globally towards science- and risk-based regulatory approaches.”
Belldegrun took heart in Perdue’s words, arguing that the ruling would “definitely not” limit its portfolio companies’ growth potential. “Today it is very much at a stage we’re they’re proving the concept in the US. Not just approval of the technology, the advocacy and the safety, because that’s we already know. But they’re bringing traits and varieties to market now.”
Further development would come from bringing in supply-chain players to put the science in front of customers, Belldegrun added, as Precision is doing through a partnership with Cargill that will see the pair produce low-fat canola oil. “The pieces are starting to fall together. And once they come together, it can spread to other geographies.”
He saw Latin America, in particular, as probably fertile ground for gene-editing. In Indonesia and Singapore, opposition to GMOs has been stronger, but other markets, such as Australia or China, are much more open, he noted.