Icelandic gene pioneer Decode back as private firm

Thu Jan 21, 2010 11:50am EST

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* Sale follows bankruptcy filing by parent group

* Decode will continue to offer diagnostics, genome scans

LONDON, Jan 21 (Reuters) - Iceland's Decode Genetics ehf returned as a private biotech company with new finance on Thursday after being acquired from its former parent by a consortium of investors.

The previously Nasdaq-listed parent company Decode Genetics Inc DCGN.PK, a pioneer in genetic research, filed for bankruptcy protection in November, weighed down by debts after 13 years of failing to make a profit.

Management said at the time, however, that it planned to sell the group's core genetics business to Saga Investments LLC, comprising a group of investors that includes some of Decode's original venture capital backers.

Decode blazed a trail in personal genomics by trawling Iceland's unique genetic heritage, which has changed little since the Vikings arrived more than 1,000 years ago, to work out the links between genes and common diseases.

Its scientists have published prolifically on genetic mutations linked to schizophrenia, cancer and other diseases. But its drug development programs stalled and the company's DNA tests for diseases have not brought in much cash.

A final blow came last year after company funds managed by Lehman Brothers were invested in U.S. auction-rate securities, the market for which seized up during the credit crisis.

The new Decode said it would continue its operations covering diagnostics disease risk tests, personal genome scans and contract services.

The company will be led by Earl "Duke" Collier, previously an executive vice president at Genzyme Corp GENZ.O, who will serve as chief executive, and Decode's own former CEO Kari Stefansson, who will be executive chairman and president of research. (Reporting by Ben Hirschler; Editing by David Cowell)

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