Memo No: 1
Date: September 17, 2014
Centagenetix has the future potential of being a market leader but is currently surrounded by certain key problems. I would recommend that we shouldn’t invest in Centagenetix at this moment for the following reasons:
  1. Conflicting Policies
  2. Intellectual Property Risk/Legal Issues
  3. Technical Risk
  4. Ethical Issues
  5. Market and Opportunity Risk
Conflicting Policies
  Harvard Medical School (HMS) has a conflict of interest policy (Henry Chesbrough, page no 12). If Dr. Perl decides to stay with Harvard, he would have to take no equity from the company. This would harm his monetary incentives which indirectly will reduce his motivation for research. Another alternative can be that he can leave Harvard and NECS and join another institution (Henry Chesbrough, page no 13). It will collapse the other partnerships between Harvard Medical School and MPM. And will also affect partnership between MPM venture capital for forthcoming deals (Henry Chesbrough, page no 13).This will eventually distress resource allocation of MPM in later deals.
Intellectual Property/ Legal Issues
Another issue is that concerning Whitehead Inc. They have signed an agreement with Beth Israel Deaconess Medical Center (BIDMC) to provide cell lines of 400 centenarians (Henry Chesbrough, page no 14). This clearly means that Whitehead can prove to be a competitor to Centagenetix. The objective of Centagenetix is not just to find the protein related to longevity but also to acquire intellectual property for related potential therapeutics for aging diseases like Alzheimer’s. Centagenetix needs to be the first company to come up with the drug and not be a “me too” drug so that they receive the maximum revenue intellectual property. This competition will harm the overall process of intellectual property for Centagenetix. Centagenetix can collaborate with Whitehead to fund a research and cancel their agreement. But Whitehead has proposed a...