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Loan from potential buyer will save deCODE from liquidation, says founder

30 November 2009
Appeared in BioNews 536

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.

DeCODE was founded in 1996 by Dr 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 has had great academic success but has never managed to turn a profit due to its research not translating to successful drug development. DeCODE reported  problems a year ago and since then has been attempting to sell parts of the business to recoup some of the financial losses.

Last summer there were rumours of a deal being made with the biomedical charity, The Wellcome Trust. A supposed offer was made by the trust which would enable it to take over deCODE's extensive biobank but no such deal ever materialised. This was thought by some to be because of deCODE's restrictions on data sharing but Dr Stefansson claimed it was due to the nature of how the deCODE company has to function. The Wellcome Trust wanted deCODE to become a non-profitable academic institute but this is not possible as deCODE has responsibilities to its shareholders.

An investment company known as Saga has now reportedly offered $14 million for deCODE's drug development and discovery branches. The offer has to be accepted by the courts and Stefansson is optimistic a decision will be made by January next year. At the moment Stefansson has said he is hoping to remain a prominent figure in the company working as executive chair and head of research whilst someone else would take over as CEO to lead commercial projects. Stefansson believes that deCODE is still needed and has said he aims to have 2500 entire genomes sequenced by mid-2011 in order to identify rare variants of mutations which could confer higher prevalence of disease. Other researchers have commented that as the database deCODE uses is that of a close knit, homogenous population the company stands a good chance of finding important rare variants.

SOURCES & REFERENCES
Bankruptcy Won’t Stop deCODE, Says Its Founder, Stefánsson
Science magazine |  27 November 2009
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