The big biotech news of the day is the $415 million sale of deCODE Genetics to Amgen. Coverage of the deal is everywhere, including a typically excellent overview from Matthew Herper of Forbes.
We’ve written extensively about deCODE here at the Genomics Law Report over the years, including the company’s well-publicized bankruptcy and privatization two years ago. That transaction left plenty of deCODE shareholders out in the cold, and those shareholders aren’t likely to be feeling any better about things this winter.
Two years ago, questions were raised regarding how the newly private deCODE would utilize one of its most noteworthy assets: it’s database of genetic and other personal health information about Icelandic citizens. Those questions are likely to resurface now, as Amgen seeks to extract $415 million worth of a company that it bought – at least according to one of deCODE’s owners – in large part for access to deCODE’s data. Expect the usual assurances, but remember that those assurances are only as strong as the paper – and legal framework – upon which they are premised.
Meanwhile, it’s quite likely that the sale to Amgen will usher in the final chapter of deCODE’s long-running direct-to-consumer (DTC) genetic testing business, deCODEme. deCODEme’s sole product – the deCODEme Complete Scan – covers 47 conditions and traits and retails for a whopping $1,100. That’s significantly more than than the
$299 $99 [see update next post] competitor 23andMe currently charges for its own test; a test which covers 200+ traits and also includes a popular genetic genealogy component. It’s also nearly double the whole exome DTC product recently announced by new market entrant DNA DTC.
Indeed, it has been quite some time since deCODEme was priced anywhere close to competitively with other comparable DTC genetic testing products. The fact that deCODE’s founder and CEO Kari Stefansson will apparently be staying on as president of deCODE post-acquisition suggests there is some chance that deCODEme might be preserved, at least in the short-term. Still, it’s hard to envision how a DTC genetic testing business really fits into Amgen’s long-term plans here.
This summer, Life Technologies purchased erstwhile DTC genetic testing provider Navigenics this summer, in large part for access to the company’s CLIA-certified laboratory. Following the acquisition, the DTC consumer piece of Navigenics’ business was quickly shuttered. With Amgen’s purchase of deCODE, and its promise to focus on speeding drug candidate identification and development, it’s quite likely that a similar fate is set to befall the now-seemingly-irrelevant deCODEme. If and when that happens, the DTC genetic testing industry will mark the departure of another of its founding members, leaving 23andMe the last member standing of the initial crop of companies that introduced us to direct-to-consumer, genome-wide products five years ago.
Update 12/12: As predicted, Amgen has now confirmed that deCODEme will be shutting down. An Amgen spokesperson confirmed to Pharmacogenomics Reporter that “Amgen does not intend to continue offering genomic screening tests to the public and healthcare providers. This is not a core part of Amgen’s business interest in Decode…Employees and resources focused on this area will be realigned with other priorities and projects.”