Iceland not only has natural beauty but also a population with detailed genealogical information and medical records that has enabled deCODE to uncover genetic causes of common diseases. Credit: AFP PHOTO/Leon Neal

A group of US investors has acquired the assets of deCODE genetics, the Icelandic genomics company that filed for bankruptcy in November (Nat. Biotechnol. 28, 5–6, 2010). Saga Investments—formed by Polaris Ventures of Waltham, Massachusetts, and ARCH Venture Partners, in Seattle, Washington—has put up $13.9 million to bring deCODE through the bankruptcy process and recapitalize the firm. Going forward, deCODE expects to make deals around its genomics resources, which are built around a detailed genetic profiling of the Icelandic population and ancestral data. But unlike that of companies (including deCODE) set up in the 1990s offering genomics services, the focus of the new firm will now be on diagnostics, not drug discovery. deCODE's cofounder Kári Stefánsson will continue to lead the research team, which will remain in Reykjavik. Business operations will now be run out of Boston, Massachusetts and led by Earl Collier Jr., a former strategist (exec VP) for Cambridge, Massachusetts–based Genzyme, who takes over the CEO reins from Stefánsson.

Despite its financial difficulties, deCODE has a clear track record of scientific productivity, says Collier. “We've been deepening our abilities and broadening them at a time when the field itself is moving forward.” But although its genetic research flourished, the company found its products in development difficult to market and service contracts difficult to execute. “The last conversations deCODE was able to have in a serious way about commercial things were almost two years ago,” Collier says. Now, with the reorganization, “the commercial aspects can be put back in balance with the scientific assets,” he says. deCODE expects to benefit from increasing awareness that genetic stratification of patients can improve the likelihood of clinical success as well as patient management and treatment. The long-term nature of genomics-based drug development was one reason the partnerships cut by the first generation of genomics companies—Millennium Pharmaceuticals (now wholly owned by Takeda of Osaka, Japan), Human Genome Sciences (Rockville, Maryland) and Incyte Pharmaceuticals (Wilmington, Delaware), for example, as well as deCODE—were unsuccessful. “This is the model for the second decade” of genomics, says Terry McGuire of Polaris Ventures, one of the venture capital firms that formed Saga. deCODE expects to ink partnerships in which disease-related genetic discoveries will be applied to risk assessment and pharmacogenomics tests. “It's fair to say we will be more focused in terms of commercialization of intellectual property in the diagnostics direction, not so much in the drug development direction,” says Collier. As part of the reorganization, deCODE shelved three drugs in development, which are now owned by Saga. It had already shuttered its structural chemistry site in Woodridge, Illinois, in 2009, and sold its Emerald BioStructures drug discovery operations in Bainbridge Island, Washington, prior to the bankruptcy filing.