It has gone quiet around DeCODE Genetics, once a poster child for the commercialisation of genomics. Until around five years ago, the Icelandic company was once one of the hottest firms in the field. Then, in 2009, it made headlines by spectacularly going bust. Nowadays, a company with the same name still exists, but not very much is being said or written about it.
DeCODE was founded in 1996 to find the genetic causes of diseases. Soon it started publishing its results in high-profile papers, and its future looked bright enough for an IPO on the NASDAQ stock exchange in 2000. However, it never made a profit, and after some years DeCode was delisted from the NASDAQ again. A few months after that, in November 2009, it declared bankruptcy.
What went wrong? One examplanation is that DeCODE was a victim of the financial crisis that started in 2008. It did not help that $33m of DeCODE's money was managed by Lehman Brothers, and that the company was headquartered in Iceland, which was particularly hard hit by the crisis.
However, DeCODE had already struggled financially before the crisis. The bigger contributor to DeCODE's downfall was probably that is has turned out harder than expected to monetarise the company’s excellent science. It developed a few drug leads, but the most promising lead was suspended in 2006 due to manufacturing problems.
What is DeCODE currently up to? In January 2010, it was purchased by a consortium that includes Polaris Ventures and ARCH Venture Partners, two investors specialising in the life sciences.
The company now focuses exclusively on research. Their website sporadically announces the discovery of variants linked to disease, often in collaboration with other organisations. One such collaboration is with Pfizer, which seems to provide DeCODE with some income. Other sources of income are grants from the NIH and the European Union.
The morale? First-class science is not enough to make a genomics company successful.
As always, please note that everything I write on this blog is my personal opinion and is not endorsed by the Sanger Institute or the Wellcome Trust. Please also note that I will be away until the 19th of July and cannot answer to your comments until then.