The pioneering genetics research company, deCODE, re-emerged 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 such as schizophrenia, cancer and heart disease. However, deCODE's scientific success failed to translate into profits and, after 13 years of financial troubles, including major losses following the fall of Lehman Brothers in 2008, the company filed for bankruptcy in November 2009.
Last week, however, a Delaware (US) bankruptcy court approved the sale deCODE's subsidiary, Islensk Erfdagreining, to Saga Investments LLC, thereby salvaging some of deCODE's core business under a new management and a new name: deCODE efh. Saga is a consortium that includes leading life science investors Polaris Ventures and ARCH Venture Partners, and investors who invested in the orginal deCODE.
The 'New deCODE', as it is referred to, will continue to carry out its deCODE diagnostics disease risk tests, deCODEme(TM) personal genome scans, and contract service offerings such as genotyping, sequencing and data analysis. It is the high quality of deCODE's scientific work that saved it: 'From an investor's perspective, it was the power of the content being created', says Terrance McGuire, general partner at Polaris.
deCODE efh is to be led by a expert two-man team: Earl Collier, previously Vice President of Genzyme Corp, has been appointed CEO, and Kari Stefansson, neuroscientist and founder of deCODE Inc., has been appointed Executive Chairman and President of Research. 'New deCODE' hopes to continue to lead the way in genetic research and its application. Henceforth, rather than working on creating drugs in house, deCODE will partner drug companies to develop products that interpret their research into medical therapies.
Meanwhile, original parent company deCODE Genetics, Inc has changed its name to DGI Resolution, Inc; it expects to be liquidated in accordance with procedures currently undergoing at the bankruptcy court.