deCODE Genetics Rises From the Ashes

Over the past decade deCODE genetics Inc. hasn't turned a profit, but it has made a scientific splash by finding disease risk markers using a genetic, medical, and genealogical database on 140,000 Icelanders. Last week, a bankruptcy court in Delaware approved the sale of deCODE Inc.'s subsidiary Islensk Erfdagreining, which runs this biobank, to Saga Investments LLC. Saga's investors include two firms that invested in the original deCODE as well as Illumina, the sequencing machine company in San Diego, California. The CEO of the new private company, called deCODE genetics ehf, is Earl "Duke" Collier, a former executive vice president at Genzyme; Stefansson will be executive chairman and president of research. The parent company is still selling off deCODE genetics Inc.'s drug discovery and development components, says Stefansson.

The new deCODE will still focus on human genetics, including selling diagnostic tests and a personal genome analysis service, deCODEme. “The plan is to continue to lead the world when it comes to human genetics," says Stefansson. It will partner with drug companies instead of developing drugs on its own from its gene discoveries, Collier says. Stefansson says this does not raise privacy concerns because Iceland's data privacy and ethics laws will only permit deCODE to "work on problems" for the companies. "We cannot provide people unfettered access to the data," Stefansson says.

To further its search for disease genes, the company plans to begin whole genome sequencing of 2500 DNA samples from its database. It will not need to recontact these individuals for consent because their original consent agreements cover whole genome sequencing, Stefansson says.

Stefansson dismissed allegations by dissatisfied investors that he and Collier, a former member of the old deCODE's board, helped engineer the sale to Saga to advance their own interests. This argument is made in a complaint filed in the Delaware court in December by creditors that charges that Stefansson, Collier, and others discouraged other parties from bidding for the company and "may have colluded to create a deal that will ensure their continued profit ... free and clear of claims held by the Debtor's [deCODE's] unsecured creditors." The Delaware bankruptcy judge approved the deal, Stefansson points out, and "everything has been done in keeping with the law."