DeCode Genetics, a genome sequencing and drug development company, found out the hard way that predicting disease risk simply by reading someone’s genes isn’t so straightforward. On Tuesday, deCode filed for chapter 11 bankruptcy protection in Delaware. The company’s financial problems have also raised some troubling questions about genetic privacy.
DeCode’s mission was to uncover genetic risk factors for common diseases and to develop personal genome scans so individuals could learn their risk. DeCode quickly became the leader in the worldwide race to identify the causes of common disease. The company’s researchers discovered mutations linked to schizophrenia, heart disease, diabetes, prostate cancer and many other illnesses. Its approach was to identify the mutations first in Icelanders and then to confirm them in other populations [The New York Times]. Iceland was seen as an ideal spot for genetic studies, because the population was fairly isolated and the country has excellent medical and genealogical records. However, the company’s early successes did not translate into dollars, in part because the mutations they found only account for a small percentage of the overall incidence of a given disease.
DeCode published high profile scientific research on the human genome, but the company has struggled to survive for the past year as it took too long to convert discoveries into marketable products and opportunities for raising cash faded with the global credit crunch [Bloomberg]. Last year, the company began offering personal genetic tests in which customers sent in cell samples swabbed from the insides of their cheeks and got back reports on their genetic vulnerability to certain diseases. Many experts have argued that such tests have little value.
Despite their scientific advancements, deCode has been a failure as a business, burning through $700 million and failing to generate a single quarterly profit. When deCode filed for chapter 11 bankruptcy protection, they listed estimated total assets in the range of $50 million to $100 million and estimated total liabilities in the range of $100 million to $500 million [Reuters]. Saga Investments LLC placed the first bid on deCode for near $14 million.
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