• Laura M. McNamee Bentley University
  • Fred D Ledley Bentley University



Genomics, drug development, value, investment, biotechnology, accounting


Human Genome Science (HGS) aspired to dominate the emergent field of genomics by discovering expressed gene sequences and developing therapeutic and diagnostic products based on proprietary genes. While HGS’ accomplishments fell short of their own lofty expectations, by the time HGS was acquired by GlaxoSmithKline, the company had extensive intellectual property and had launched a product with >$1 billion market potential. Nevertheless, HGS’ acquisition price was less than the total capital investments in the company. This work examines HGS’ history and accomplishments in the context of the business plan described by the company at their IPO. We focus specifically on the company’s valuation over time, which was highly correlated with general market indices, but negatively correlated with metrics of technical or clinical progress. The history of HGS points to the challenge of accounting for the value created by a science-based business plan. Earnings-based metrics, present value calculations, and “fair value†assessments did not account for HGS’ progress in executing their stated business plan. This work highlights the critical need for accounting practices that credit value to the progress of translational science and enable investors to profit from such investments.

Author Biographies

Laura M. McNamee, Bentley University

Research Associate in the Center for Integration of Science and Industry and Adjunct Assistant Professor of Natural and Applied Science at Bentley University. Her research focuses on patterns of sustaining and disruptive innovation in biotechnology, the impact of technology life cycles on drug development, and business models for the biotechnology industry.

Fred D Ledley, Bentley University

Director of the Center for Integration of Science and Industry and a Professor in the Department of Natural and Applied Sciences and Department of Management and at Bentley University.  He has served on the faculties of the Baylor College of Medicine and Howard Hughes Institute, and also as a founder and senior executive of several biotechnology companies in gene therapy and personalized medicine. His research focuses on the interface between science and business, as well as strategies for accelerating the translation of scientific discoveries to create public value.



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