A train wreck in slow motion: deCODE Genetics slides towards bankruptcy

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").

The company has been in financial trouble for a while, but things certainly haven't been helped by the near-complete meltdown of the Icelandic economy over the last six months.
The loss of deCODE - assuming it can't actually miraculously resurrect itself, or find a buyer willing to keep it running - would be a genuine blow to the field of human genetics.
Here's deCODE's share price over the last 5 years (source: NASDAQ):

More like this

@Steve: Not cool... deCODE is much bigger than deCODEme or Kari. It IS the biotechnology industry of Iceland, and it's destruction in the wake of a nationwide collapse is not a joke. I don't blame the Icelandic for rioting. Too bad they don't have a quaint Midwestern attitude about widespread civilian firearms in Reykjavik. I know I'd be looking in my cabinet for something long and metal when the bagmen start coming to collect... and it wouldn't be a rod of freshly smelted aluminum.

I'm also saddened by this. deCodeMe was the only DTC genetics firm that really took seriously the need to establish clinical relevance for their tests.

The studies they were running were doing the heavy lifting of massive case-control experiments (Framingham and prostate cancer indicators, etc.) to validate the use of genetic markers to increase accuracy of diagnosis and treatments. We all needed their work.

Unfortunately, even if the Icelandic economy hadn't melted down, there still was no legal way for deCode to protect the intellectual property of the results of their expensive and time consuming studies. Their relevant results would just have been appropriated by Navi and 23andMe.

Still, I'll miss their contributions.