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Valuing Contributions to Major Advancements in Medicine

HeLa cellsHow do you place a value on human cells that have changed the entire trajectory of cancer treatment and have paved the way for medical breakthroughs in diseases like polio, HIV and HPV?

The best-selling book The Immortal Life of Henrietta Lacks – now also an HBO movie starring Oprah Winfrey – examines how, in 1951, cancer cells were harvested during a biopsy of an African-American woman without her knowledge. Those cells, known as HeLa cells, are the oldest and most commonly used human cell line in biomedical research and have had a significant impact on medical research and advancements in treatment for decades.

The story of Henrietta Lacks raises moral and ethical questions about patients’ rights. To start, the Lacks family was unaware their mother’s genetic tissue was taken and being used for research. Further, they never received any form of financial compensation for the profits gained by the medical community for more than 65 years. To this day, Lacks’ eldest son continues the family’s fight for compensation.

Her story also sheds light on the importance of valuation as a tool in cases involving intangible assets. In the Lacks case, at issue is the value both of Ms. Lacks’ cancer cells and the patents derived from their use, which have generated millions in revenue for the researchers who have used them. CPAs involved in economic damages calculations that include intangible assets may be faced with a variety of challenges. There are several best practices that can be applied no matter what assets are the subject of valuation. Here are a few to keep in mind:

Stick to Basic Practices

Henrietta Lacks’ cells made a sizable contribution to medical research. If a CPA or finance professional who performs fair value measurements were called upon to value that impact, he or she would follow standard practices that apply in any valuation, no matter the circumstance. The valuation specialist would use their research to determine which factors led to or could lead to outcomes in the case. They would also consider the expected financial results and the risks associated with those financial outcomes to determine a final value.

Perform Sufficient Research

Any analysis of economic damages begins with a series of questions. The valuation specialist must fully understand the premise of the case, alternatives available and the financial implications of those alternatives.

In a situation like the Lacks case, a valuation specialist would consider the time when the cells were first harvested to fully understand the context. Were there alternatives to this material that were readily available at the time or since then? Were these cell samples one in a million? One in 100,000? Knowing how many other similar cells were available then and now would have an impact on supply and demand issues and would affect value.

Valuation specialists would also have to explore legal issues, such as who had the rights to the cells at various points in time. In this case, even though the cells have been used since the 1950s, the Lacks family did not reach any agreement with the medical community until 2013. Valuation specialists wouldn’t make or offer any legal conclusions, but they would turn to experts for opinions that would be considered in determining asset value.

Identify Necessary Experts

Valuation specialists often specialize in specific areas based either on the industry or situation – such as health care or divorce – or the type of valuation – such as economic damages. In a highly specialized case like this one, a valuation specialist without sufficient background in medical research could enlist experts with the proper knowledge to help them understand the financial implications of the case. He or she would work with experts to assess the potential economic damages or economic benefit that would have been gained through use of the cancer cells.


In 2013, a court ruling established biomedical researchers must apply for and be granted permission by the National Institutes of Health (NIH) to use HeLa cells for research purposes. Further, it was determined that two members of the Lacks family would sit on the NIH committee responsible for reviewing those applications.

After more than 65 years, the outcome of the Lacks family’s fight for restitution will depend heavily on the valuation of their mother’s contribution to the vital field of cancer research. The question remains: How does one value such a significant contribution? A transparent and consistent methodology can give us our best answer.

Valuation is an intriguing field that offers practitioners a range of unique engagements. There’s widespread demand for CPAs with expertise in providing forensic and valuation services and computing economic damages, and that’s why the AICPA offers the Accredited in Business Valuation (ABV) and Certified in Financial Forensics (CFF) credentials. CPAs and finance professionals can learn more about how they can improve the transparency and consistency in valuations of intangible assets by following the new performance framework for the Certified in Entity and Intangible Valuations™ (CEIV™) credential.

Paul Wapner, CPA/ABV, CGMA, Lead Manager – Forensic and Valuation Services, Association of International Certified Professional Accountants.

HeLa cells courtesy of Shutterstock.


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