deCODE genetics Announces First Quarter 2009 Financial Results

REYKJAVIK, Iceland, May 11 /PRNewswire-FirstCall/ -- deCODE genetics
(Nasdaq:DCGN) today announced its consolidated financial results for the
quarter ended March 31, 2009. A conference call to discuss these results and
recent developments in the company's business will be webcast live tomorrow,
Tuesday, May 12, at 8:00am Eastern Daylight Time/12 noon GMT/1pm British
Summer Time (details below).
Net loss for the quarter ended March 31, 2009 was $12.6 million, compared
to $26.7 million for the first quarter 2008. Basic and diluted net loss per
share was $0.21 for the first quarter 2009, compared to $0.44 for first
quarter last year. At March 31, 2009, the company had approximately 61.8
million shares outstanding.
Revenue for the first quarter 2009 was $8.9 million, versus $15.0 million
for the first quarter last year. This decline is due principally to lower
contract service revenues. At March 31, 2009, the company had $12.7 million
in deferred revenue, which will be recognized over future reporting periods.
Research and development expense for proprietary programs was $4.2
million for the first quarter of this year, compared to $12.7 million for the
same period last year. This reflects the company's current focus on applying
its established capabilities in human genetics to drive its diagnostics and
deCODEme businesses, and the curtailment of investment in clinical trials for
its therapeutics programs reflected in the 2008 period. Selling, general and
administrative expenses for the first quarter 2009 were $4.9 million,
compared to $7.2 million for the first quarter 2008.
At March 31, 2009, the company had cash and cash equivalents of $6.1
million, compared to $3.7 million at December 31, 2008. In early 2009 the
company sold its auction rate securities (ARS) for approximately $11.0
million in cash, and last month, the company signed licensing agreements with
Celera Corporation under which it received an upfront payment and will
receive royalties on sales of Celera testing products and services
incorporating deCODE genetic risk markers. The company believes it has
sufficient resources to sustain operations through the second quarter of this
year.
"Over the past few months we have been recasting deCODE's business around
what we do best: discover genetic risk factors for common diseases and apply
those findings in tests and services that can improve the prevention and
treatment of disease. Our partnership with Celera is one facet of this
strategy. Preliminary acceptance of our US patent application for one of our
major genetic risk markers also underscores the wisdom of our approach to
intellectual property, both for differentiating our products from the rest of
the field and for pursuing additional licensing partnerships. At the same
time, we are engaged in negotiations on large-scale sequencing
collaborations, debt restructuring and equity financing, and on the sale of
certain business units and therapeutics programs. Our aim in pursuing all of
these opportunities is to position deCODE to capture the commercial potential
of our leadership in human genetics," said Kari Stefansson, CEO of deCODE.
Recent operating highlights include:

Product Development and Partnerships

- Celera. Last month, deCODE entered into agreements with Celera
Corporation under which it has granted Celera non-exclusive worldwide
licenses to deCODE's genetic markers for increased risk of major
cardiovascular and metabolic diseases, including heart attack, stroke,
atrial fibrillation (AF) and type 2 diabetes (T2D). The markers include
SNPs discovered by deCODE on chromosome 9p21 linked to increased risk
of heart attack and types of aneurysm, on chromosome 4q25 conferring
risk of AF and stroke, and in the TCF7L2 gene linked to increased risk
of T2D. These markers, which deCODE uses in its own risk assessment
tests and deCODEme service, are among the highest impact and best-
validated genetic risk factors for these conditions. Celera plans to
incorporate them into risk assessment and testing services offered by
its subsidiary Berkeley HeartLab, and deCODE will receive royalties on
sales of tests and services utilizing its markers.
- deCODEme(TM) personal genome scans. In addition to its pioneering
full-genome scan, deCODEme(TM) in January launched the first focused
genetic scans for assessing personal risk of several major
cardiovascular diseases and common cancers. These scans offer a
targeted snapshot of disease risk in two areas that may be of specific
interest to certain subscribers, with deCODE quality science and
analysis at a modest price. deCODEme Cardio(TM) detects genetic risk
factors for heart attack, stroke and atrial fibrillation, two types of
aneurysm and venous thromboembolism. deCODEme Cancer(TM) measures
genetic risk factors for prostate, lung, bladder, skin and colorectal
cancers, as well as the common form of breast cancer.
- Gene and diagnostic target discovery. Since the beginning of the year
deCODE has extended its list of major gene discoveries. In January,
deCODE scientists and colleagues from eleven countries announced the
discovery of common single-letter variations in the human genome (SNPs)
linked to susceptibility of lung, bladder, prostate, skin and cervical
cancers. In February deCODE published the first genetic risk factor for
essential tremor, as well as major risk factors for thyroid cancer.
deCODE has incorporated these findings into deCODEme(TM) and the newly-
launched deCODEme Cancer(TM) scan.

Finance

- Cash position and ARS. In January 2009, deCODE sold its auction rate
securities (ARS) for approximately $11.0 million in cash through an
agreement with NBI, an Icelandic financial institution. Under this
agreement, deCODE has the call option to require NBI to sell the
securities back to the company at any time until January 1, 2010. NBI
has the put option to require deCODE to repurchase the securities
following the sale of certain other deCODE assets, or if not previously
repurchased, on or before December 31, 2009.
- Nasdaq listing review. On April 28, deCODE received a letter from the
Nasdaq Listing and Hearing Review Council stating that the Council has
called for review the determination of the Nasdaq Listing
Qualifications Panel regarding the delisting of the company's common
stock from the Nasdaq Stock Market. Pending the completion of this
review, the company's stock will continue to trade as usual on the
Nasdaq Capital Market.
- Notes interest payment. In order to provide more time for the execution
of strategic alternatives currently under consideration, the company
elected to utilize a 30-day grace period for the scheduled April 15
interest payment on its outstanding 3.5% Senior Convertible Notes due
2011.

About deCODE
deCODE is a bio-pharmaceutical company developing drugs and DNA-based
tests to improve the treatment, diagnosis and prevention of common diseases.
Its lead therapeutic programs, which leverage the company's expertise in
chemistry and structural biology, include DG041, an antiplatelet compound
being developed for the prevention of arterial thrombosis; DG051 and DG031,
compounds targeting the leukotriene pathway for the prevention of heart
attack; and DG071 and a platform for other PDE4 modulators with therapeutic
applications in Alzheimer's disease and other conditions. deCODE is a global
leader in human genetics, and has identified key variations in the genome
(SNPs) conferring increased risk of major public health challenges from
cardiovascular disease to cancer. Based upon these discoveries deCODE has
brought to market a growing range of DNA-based tests for gauging risk and
empowering prevention of common diseases. Through its CLIA-registered
laboratory, deCODE offers deCODE T2(TM) for type 2 diabetes; deCODE AF(TM)
for atrial fibrillation and stroke; deCODE MI(TM) for heart attack; deCODE
ProstateCancer(TM) for prostate cancer; deCODE Glaucoma(TM) for a major type
of glaucoma; and deCODE BreastCancer, for the common forms of breast cancer.
deCODE is delivering on the promise of the new genetics.SM Visit us on the
web at http://www.decode.com; on our diagnostics site at
http://www.decodediagnostics.com; for our pioneering personal genome analysis
service and new focused disease scans, integrating the genetic variants
included in these tests and those linked to another twenty common diseases,
as well as for our new deCODEme Cardio(TM) and deCODEme Cancer(TM), at
http://www.decodeme.com; and on our blog at http://www.decodeyou.com.
Conference Call Information
A conference call, during which deCODE CEO Kari Stefansson and CFO Lance
Thibault will discuss the past year's financial results and operating
highlights, will be webcast tomorrow, Tuesday, May 12, at 8:00am EDT/12 noon
GMT/1pm BST. The webcast can be accessed via the Investors section of
deCODE's website, www.decode.com, or through www.earnings.com. A replay of
the call will be available on these websites for at least one week following
the call. A digitized telephone replay of the call can be accessed for the
week following the call by dialing 1 800 475 6701 from the US, or +1 320 365
3844 from outside the US. The access code is 100482.
Condensed Consolidated Statements of Operations

For the three months
ended March 31,
2009 2008
In thousands, except
per share amounts
(unaudited)

Revenue...................................... $ 8,917 $ 14,978
OPERATING EXPENSES
Cost of revenue............................ 8,184 14,714
Research and development............... 4,233 12,653
Selling, general and administrative....... 4,903 7,211
Total operating expense........... 17,320 34,578
Operating loss................................ (8,403) (19,600)
Interest income.............................. 157 1,037
Interest expense............................. (4,626) (4,025)
Other non-operating income and (expense), net*. 235 (4,077)
Net loss .................................... $ (12,637) $ (26,665)
Basic and diluted net loss per share: $ (0.21) $ (0.44)
Shares used in computing basic and
diluted net loss per share................... 61,489 61,266

Condensed Consolidated Balance Sheet Data

At March 31, At December 31,
2009 2008
In thousands,
(unaudited)

Cash and cash equivalents........... $ 6,148 $ 3,701
Total assets....................... 74,616 75,137
Total liabilities................... 307,165 296,213
Total shareholders' equity (deficit). (232,549) (221,076)

* Other non-operating expense for the three-months ended March 31, 2009
and 2008 principally reflects an unrealized loss resulting from the
revaluation of the company's non-current auction rate security
investments and for the three-months ended March 31, 2009 offset by
foreign currency translation gains.

Any statements contained in this presentation that relate to future
plans, events or performance are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to a number of risks and uncertainties
that could cause actual results, and the timing of events, to differ
materially from those described in the forward-looking statements. These
risks and uncertainties include, among others, those relating to our ability
to obtain sufficient financing to continue as a going concern, the outcome of
the review of the continued listing of our common stock on The Nasdaq Stock
Market, our ability to develop and market diagnostic products, the level of
third party reimbursement for our products, risks related to preclinical and
clinical development of pharmaceutical products, including the identification
of compounds and the completion of clinical trials, our ability to form
collaborative relationships, the effect of government regulation and the
regulatory approval processes, market acceptance, our ability to obtain and
protect intellectual property rights for our products, dependence on
collaborative relationships, the effect of competitive products, industry
trends and other risks identified in deCODE's filings with the Securities and
Exchange Commission, including, without limitation, the risk factors
identified in our most recent Annual Report on Form 10-K and any updates to
those risk factors filed from time to time in our Quarterly Reports on Form
10-Q or Current Reports on Form 8-K. deCODE undertakes no obligation to
update or alter these forward-looking statements as a result of new
information, future events or otherwise.
Contacts: deCODE genetics

Joy Bessenger
+1-212-481-3891
ir@decode.is

Gisli Arnason
+354-570-1900
info@decode.is

Edward Farmer
+354-570-1900
info@decode.is

SOURCE deCODE genetics Inc

Contacts: deCODE genetics: Joy Bessenger, +1-212-481-3891, ir@decode.is; Gisli
Arnason, +354-570-1900, info@decode.is; Edward Farmer, +354-570-1900,
info@decode.is