Pioneering deCODE Genetics files for Ch. 11

Icelandic genomics pioneer deCODE Genetics has filed for Chapter 11 bankruptcy protection, listing assets close to $70 million and debt of more than $313 million. But it filed papers in court outlining a deal to sell its Icelandic subsidiary to Saga, which is backed by Polaris Venture Partners and Arch Venture Partners, two well known venture groups active in the drug development business.

DeCODE's assets include drug discovery and development programs and its Islensk Erfdagreining unit, which conducts genetics research, provides personal genome scans, DNA-based risk assessment tests and genomics services for contract customers. And Saga has agreed to lend the company interim financing. DeCODE became famous for its early work in genomics, but the financial crisis that throttled the island-nation's economy also went a long way to scuttling the company's finances, blasting its market value and pointing it to bankruptcy.

Just last September decode closed a facility in Illinois, laying off 60 workers. "deCODE expects that if the asset sale is consummated it would be liquidated pursuant to a plan of liquidation which would be subject to the approval of the bankruptcy court," the company stated in a release. "In the event of a liquidation, any recovery for stockholders of deCODE would be highly unlikely."

- check out deCODE's release
- here's the Reuters story

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