deCODE Genetics, the major Icelandic biotech company behind personal genomics outfit deCODEme, has just released its financial results for 2008. Things really aren’t looking good:
At December 31, 2008, the company had liquid funds available for operating activities, comprised of cash and cash equivalents together with current investments, of $3.7 million, compared to $64.2 million at December 31, 2007. In early 2009 the company sold its auction rate securities (ARS) for $11.0 million in cash which the company has been using to finance its operating activities. The company believes it has sufficient resources to sustain operations only into the second quarter of this year. [my emphasis]
This might seem like a simple case of yet another biotech out-stripping its capital – but it’s sadder than that. While it appears that deCODE made some poor strategic decisions in a business sense, it did use its unique assets (i.e. access to the DNA, health and genealogical records of a large proportion of the Icelandic population) to answer fundamental questions about human genetics. A remarkable number of the genome-wide association studies published over the last couple of years have come from deCODE (I’ve heard the company described as “a biotech that acts like an academic research institute”).