By Ludwig Burger

(Reuters) – British drugmaker GSK said it has struck a research deal with the early pioneers of a prominent gene-editing technology at the University of California, in a boost to its prospects for developing new drugs.

GlaxoSmithKline, Britain’s largest drugmaker, will pay up to $67 million over a five-year period for the new Laboratory for Genomics Research, which will be jointly run with the University of California and led by researchers such as Jennifer Doudna, a co-inventor of the CRISPR gene-editing technology.

New gene editing tools – with CRISPR/Cas9 as the most prominent example – have thrown the door wide open for rearranging the genetic code much more precisely and at lower costs than previously possible.

The technology made headlines last year when a Chinese scientist caused outrage with a claim to have “gene-edited” babies, but CRISPR/Cas9 can also be used in medical and agricultural research without interfering with the human germline.

CRISPR works as a molecular scissors that can trim away unwanted pieces of genetic material and replace them with new ones. Easier to use than older techniques, it has quickly become a preferred method of gene editing in research labs.

The new GSK lab will run tests on various irregularities in the human genome and track the malfunctions they trigger in cells, hoping to gain a clearer understanding of the causes of cancer as well as neurological and immunological diseases.

“Once we understand how that changes its function, we can think about how to mitigate that functional impairment and normalize the cell, and normalize, hopefully, the patient by just developing a drug that could prevent them from developing the disease,” said GSK’s Chief Scientific Officer Hal Barron.

GSK, which had hired Barron from Alphabet-backed biotech firm Calico in 2017, will become more dependent on its drug development fortunes as it prepares to fold its consumer health business into a joint venture with Pfizer that will be separately listed.

Automation and heavy-duty computing will allow researchers to analyze hundreds of millions of genetic combinations per experiment at the new lab, Barron added.

The University of California in February scored a victory in a drawn-out legal battle with the Cambridge, Massachusetts-based Broad Institute over the CRISPR patent application that Doudna filed together with Emmanuelle Charpentier of the University of Vienna in 2012.

The new lab in San Francisco will include facilities for 24 full-time university employees funded by GSK plus up to 14 full-time GSK staff.

Other pharma companies are investing in the new method. Bayer and Vertex Pharmaceuticals have independently established collaborations with CRISPR Therapeutics, a biotech firm working on gene therapies.

For GSK, the California lab project ties in with existing data-driven alliances in genetic research with Alphabet-funded gene testing company 23andMe, or with the UK Biobank, a genetic database project.

(Additional reporting by Michael Erman in New York, editing by Deepa Babington)