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Genetic data company deCODE has filed for bankruptcy

22 November 2009
Appeared in BioNews 535

The commercialisation of 'personalised' genetic medicine was delivered a blow last week as the Icelandic biopharmaceutical company deCODE genetics was forced to file for bankruptcy. The company was reported to be restructuring but are now considering an offer from Saga investment for their drug development branch and have been forced to put their other assets up for sale also.

DeCODE was founded in 1996 by Dr Kari Stefansson, a Harvard neurological researcher who aimed to establish a business that was profitable in both an academic and financial sense. By utilising the extensive medical records of the small, genetically isolated Icelandic population, deCODE hoped to probe for and identify key genetic markers of common diseases, discover the gene function and then develop targeted and personalised treatments for patients. The company also made the headlines for pioneering the controversial concept of direct-to-consumer genetic testing, a service in which people could pay to have a sample of their DNA analysed for known disease predisposition gene variants.

Over the years deCODE has been very successful, identifying a long list of genes implicated in a range of diseases such as diabetes, prostate cancer and schizophrenia. Their research has been well respected within the scientific community and their work published in highly regarded journals such as Nature. However despite this academic acclaim, the company has never managed to turn a profit due to most of their findings not being applicable to a wide scale drug production.

It is now becoming clear that the human genome and the mutations that cause diseases are much more complicated than first thought. In fact, diseases with a genetic component are not often a result of a single mutation, but a complex interplay of many genetic and non-genetic factors and this can make targeted treatments much harder to design.

'The discovery that major diseases do not have any simple genetic pattern of causation has dealt a serious setback to the gene-hunting field as a whole, and researchers are trying to figure out their next move,' said Edward Farmer, deCode's chief communications officer.

The news of deCODE filing for bankruptcy has made some people concerned about the privacy of the data the company hold. There are worries that the DNA information they have from their customers could be sold to academic institutes in order to recoup some of the company's financial debts. However, Dr Stefansson has said this is not the case and that any data deCODE has will remain private.

'We don't own the genetic data of our customers, they own the data. We have no access to these data for anything except doing analysis for our customers. We are not selling genetic data, we will not do that', he said.

A Genetics Company Fails, Its Research Too Complex
New York Times |  17 November 2009
deCODE genetics Files for Bankruptcy
Science insider blog |  17 November 2009
Firm that led the way in DNA testing goes bust
The Independent |  17 November 2009
Pioneer of personalised genetic tests files for bankruptcy
The Guardian |  17 November 2009
Privacy fears as DNA testing firm deCODE Genetics goes bust
The Times |  17 November 2009
25 January 2010 - by Nishat Hyder 
The pioneering genetics research company, deCODE, reemerged last week as a private company with new financial backing. Based in Reykjavik, Iceland, the original company deCODE Genetics, Inc led the way internationally in genetic testing and diagnostics for over a decade. With unique access to genetic information from Iceland's isolated population, the biotech firm has made important discoveries, such as identifying gene variants associated with common conditions ...
7 December 2009 - by Antony Starza-Allen 
As our understanding of genetics and associated disorders has developed, many genetic tests performing functions - from predicting certain genetic predispositions and identifying rare monogenetic disorders, to ancestry and other 'novelty' tests - have been introduced to the healthcare market. Many geneticists are concerned about the regulation of these tests, which are performed by the NHS, the private sector, or distributed directly to consumers. Experts are calling for more transparent eval...
30 November 2009 - by Dr Jess Buxton 
After almost ten happy years as a BioNews editor, this issue will be my last. I started working for Progress Educational Trust (PET) in February 2000, nearly a year after BioNews was launched by Juliet Tizzard, the first PET director. In my first week, I remember thinking how useful a news digest of developments in the fast-moving areas of genetics and assisted reproduction was - and what a fascinating job it was going to be. But at the same time, I privately wondered whether there would be q...
30 November 2009 - by Dr Jay Stone 
Dr Kari Stefansson, founder of biopharmaceutical company deCODE genetics, has claimed that the company will be able to continue normal services despite announcing bankruptcy last week....
14 April 2009 - by MacKenna Roberts 
The impending financial demise of leading human genetics biotechnology company deCODE Genetics is seen as a direct blow to genetic medicine and ultimately signalling wider ramifications for the impact of the global financial crisis on the genomics industry as a whole. Chief executive Kari Stefansson announced, on...
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