Decode -- Corpse or Phoenix?

The news that Decode has filed for bankruptcy is a sad milestone in the history of genomics companies. Thus falls either the final or penultimate human gene mapping companies, with everyone else having either disappeared entirely or exited that business. A partial list would include Sequana, Mercator, Myriad, Collaborative Research/Genome Therapeutics, Genaera and (of course) Millennium. I'm sure I'm missing some others. The one possible survivor I can think about is Perlegen, though their website is pretty bare bones, suggesting they have exited as well.

The challenge all of these companies faced, and rarely beat, was how to convert mapping discoveries into a cash stream which could pay for all that mapping. Myriad could be seen as the one success, having generated the controversial BRCA tests from their data, but (I believe) they no longer are actively looking. In new tests are in-licensed from academics.

Most other companies shed their genomics efforts as part of becoming product companies; the real money is in therapeutics. Mapping turned out to be such a weak contributor to that value stream. A major problem is that mapping information rarely led to a clear path to a therapeutic; too many targets nicely validated by genetics were complete head-scratchers as to how to create a therapeutic. Not that folks didn't try; Decode even in-licensed a drug and acquired all the pieces for a full drug development capability.

Of course, perhaps Decode's greatest notoriety came from their deCodeMe DTC genetic testing business. Given the competition & controversy in this field, that was unlikely to save them. The Icelandic financial collapse I think did them some serious damage as well. That's a reminder that companies, regardless of how they are run, sometimes have their fate channeled by events far beyond their control. A similar instance was the loss of Lion's CFO in the 9/11 attacks; he was soliciting investors at the WTC that day. The 9/11 deflation of the stock market definitely crimped a lot of money-losing biotechs plans for further fund raising.

Bankruptcies were once very rare for biotech, but quite a few have been announced recently. The old strategy of selling off the company at fire sale prices seems to be less in style these days; assets are now being sold as part of the bankruptcy proceedings. Apparently, this and perhaps other functions will continue. Bankruptcy in this case is a way of shedding incurred obligations viewed as nuisances; anyone betting on another strategy by buying the stock is out of luck.

Personally, I wish that the genetic database and biobanks which deCode have created could be transferred to an appropriate non-profit such as the Sanger. I doubt much of that data will ever be convertable into cash, particularly at the scale most investors are looking for. But a non-profit could extract the useful information and get it published, which was deCode's forte but I doubt they've mined everything that can be mined.