White House appointee Dr. Francis S. Collins is Director of National Institutes of Health (NIH). A leader and activist of genetic research, Dr. Collins led the National Institute Human Genome Research for 15 years and headed the Human Genome Project, a 13-year project identifying more than 20,000 genes in the human DNA. He co-discovered the genes responsible for cystic fibrosis, neurofibromatosis, and adult acute myeloid leukemia, among others. Dr. Collins’ discoveries have enabled diagnostics companies around the world to screen for these diseases and have opened new markets worth hundreds of millions of dollars. Through his affiliation with the University of Michigan, Dr. Collins receives royalties for his inventions.
Because of his White House appointment, Dr. Collins had to divest his rights to future royalties associated with his inventions. Dr. Collins is donating those future royalty payments to three charities: the Children’s Tumor Foundation, the Cystic Fibrosis Foundation, and the Leukemia & Lymphoma Society, Inc. As part of the donation process, Dr. Collins had to have the royalty streams valued. After a national search, Dr. Collins chose Pellegrino & Associates to provide valuation services to establish the fair market value for his future royalty payments.
Pellegrino & Associates had the pleasure of working with Pete Ben Ezra, accounting professor at The George Washington University and Dr. Collins’ accountant on this project. Mr. Ben Ezra was so pleased with our work product that he asked us to prepare a case study of this project for The George Washington University. This case study will serve as an example for students of the many considerations required for performing credible IP valuations.
