Iceland-based genomics pioneer deCODE announced this morning (November 17) that it has filed for bankruptcy. It will sell some of its holdings, but plans to continue operating its business and managing its properties as it does now.

Image: Wikimedia commons, Jerome Walker, Dennis Myts

In the filing, deCODE listed total assets of $69.9 million and total debt of $313.9 million, as of June 30, 2009.

deCODE, launched in 1996, quickly became a leader in human genomics research. In the last two years alone, deCODE scientists have published at least 30 peer-reviewed research papers, all in top tier journals such as Nature, Science, and the New England Journal of Medicine. But the company has never turned a profit and has lost more than $600 million since its inception. In September, deCODE closed its Woodridge, Illinois facility, cutting about 60 jobs.

To address these financial concerns, deCODE "explored multiple restructuring alternatives," said a company press release announcing the bankruptcy filing. As a result, it has initiated the sale of its Iceland-based subsidiary Islensk Erfdagreining (IE) -- which conducts deCODE's human genetics research and manages its personal genetics services -- and its drug discovery and development programs to the US-based Saga Investments LLC. The deal must be approved by the court, but meanwhile, Saga has agreed to give deCODE a loan to support its post-petition operating expenses.

The result of this agreement, Wellcome Trust Sanger Institute researcher Daniel MacArthur explained in his blog Genetic Future, is that "pretty much all of the core business that deCODE does will continue, simply under a different name." The concern, however, is that this may only be a "temporary fix," he added. Unless deCODE is able to start generating profit, the company's future is in jeopardy. And as he wrote in August, "the loss of deCODE would be a genuine and substantial blow to the field of complex trait genetics."


Related stories:

deCODE close to broke
[11th August 2009]

deCODE falls from NASDAQ grace
[18th November 2008]

Trouble for deCODE
[14th October 2008]