deCODE genetics has voluntarily filed for Chapter 11 bankruptcy protection. The company has, in parallel and under section 363 of the Bankruptcy Code, signed an agreement to sell its Iceland-based Islensk Erfdagreining (IE) subsidiary and its drug development programs to Saga Investments.
deCODE separately confirmed selling its deCODE Biostructures and Emerald BioSystems subsidiaries in the U.S. to Delaware-based limited liability company, Beryllium. These companies are now completely independent from the deCODE organization.
IE is responsible for carrying out deCODE’s human genetics research. The business also manages deCODE’s population genetics resources and provides personal genome scans, genetic tests, and genomic services for contract customers. The Icelandic subsidiary will not be covered by the Chapter 11 filing.
The sale of IE to Saga is subject to a competitive bidding procedure and bankruptcy court approval. If sanctioned, Saga will make deCODE a secured loan to provide the company with interim financing for post-petition operating expenses. The money will also allow the company to continue providing services to clients during the bankruptcy procedure.
deCODE reported total assets of $69 million as of June 30. The company’s revenues dropped from a total of $18 million for the first six months of last year to $7.6 million during the same period this year. Revenues from its genomic services operations were $3.3 million for this year’s first half compared to nearly $10 million for the same 2008 period.
deCODE incurred net losses of $80.9 million, $95.5 million, and $85.5 million in 2008, 2007, and 2006, respectively, and had an accumulated deficit of $712.2 million at December 31, 2008. In its 2008 annual report, the company admitted, “We have never generated a profit and we have not generated significant revenues except for payments received in connection with our research and development collaborations with Roche, Merck, and others, from contract services, Emerald BioSystems products and instruments, and under grants.”