Meet the New deCODE, Same as the Old deCODE?
When deCODE genetics declared bankruptcy last fall it made a big splash. Geneticists pondered the future of the Icelandic biotechnology company’s one-of-a-kind genetic database and research platform, while investors and creditors wondered if they were going to be left out in the cold.
The initial bankruptcy buzz gave way over the past several months to a steady but relatively unremarkable stream of filings in the United States Bankruptcy Court for the District of Delaware (the case is No. 09-14063). Last week, however, brought a noteworthy docket entry, with the bankruptcy court approving the sale of most of deCODE genetics Inc.’s assets to Saga Investments LLC (pdf) – an investment company whose owners include Polaris Venture Partners, ARCH Venture Partners and genomic sequencing giant (and DTC genomics dabbler) Illumina.
A Holiday Fire-Sale? The sale, as approved by the bankruptcy court, sends substantially all of deCODE genetics Inc.’s assets – including its valuable genetic research engine that is driven in part by its access to its large Icelandic population database – to Saga Investments. As we described back in November, the bankruptcy sale process required a Stalking Horse bidder (Saga Investments) and a sale and auction process that, at least in theory, allowed other interested parties a chance to step in and make a bid for deCODE’s assets. No other bidders came forward, and the sale to Saga Investments was approved in just under two months.
From deCODE to Athleticode in DTC Genetic Testing
One week ago deCODE genetics declared bankruptcy and, yesterday, the Bankruptcy Court for the District of Delaware provided preliminary approval for deCODE’s liquidation plan, including the debtor-in-possession financing pledged by Saga Investments.
deCODE’s struggles have been well chronicled, and there has been plenty of other discussion about whether direct-to-consumer (DTC) genetic testing is a commercially viable industry at this point in time. Although it is nothing more than sheer coincidence, the past week has also brought to my attention two new DTC genetic testing companies that, though they may be quick to draw the skeptic’s attention, indicate that there are investors that continue to see long-term commercial potential in DTC genetic testing.
