An Icelandic DNA testing firm, deCODE, has filed for chapter 11 bankruptcy in a US court. What will happen to all the data it holds? That is a question agitating many in the west. For the DNA profiles belonging to thousands of people are to be transferred to a new organisation.
The genetic records of its customers will now be held by Saga Investments, a venture capital group that has agreed to buy deCODE's core science operations, including its deCODEme personalised genetic testing service.
deCODE launched in 1996, basing its business plan on its unique access to biological samples and genealogical and medical records from the small, homogeneous Icelandic population. Since its launch it has proved wildly successful as a research institute, generating an astonishing number of high-profile publications on the genetics of common traits and diseases.
But then it was also a complete disaster as a commercial venture, haemorrhaging away over $700 million while failing to generate a single quarterly profit.
In a filing with the U.S. Bankruptcy Court for the District of Delaware late on Monday, deCODE listed total assets of $69.9 million and total debt of $313.9 million, as of June 30.
The company assures its customers that, as part of its bankruptcy filing, it has secured funding that it will allow it to maintain its operations and that "we do not expect [the bankruptcy] to have any impact on your deCODEme account."
But industry experts said that Saga would want to maximise returns on its investment, and could still make wider use of data that some subscribers may find uncomfortable. Pooled and anonymised information, for example, could be sold to academic researchers or pharmaceutical companies, Times reported.
Dan Vorhaus, a lawyer with the US firm Robinson, Bradshaw and Hinson, wrote in Genomics Law Report, " ...deCODE's existing data access restrictions, as well as other restrictions imposed by law, will limit the available uses of customers' genetic information by the new management. Those restrictions will define a range of permissible uses for genetic information that is transferred as part of the bankruptcy sale. Within that range of allowable uses, however, deCODE's new owner may choose to change or even expand its use of that information."
Dr Stefansson said: "We don't own the genetic data of our customers, they own the data. We have no access to these data for anything except doing analysis for our customers. We are not selling genetic data, we will not do that."
He likened the sale to that of a medical diagnostic company or a telecommunications business that holds sensitive data. "There is a change in ownership of a commercial enterprise with a commitment to its customers and keeping data according to certain ethical principles. That doesn't really change."
DeCODE's bankruptcy comes just days after its main competitor selling personalised DNA tests, 23andMe, raised its prices, prompting suggestions that the fledgling industry is struggling to make consumer genetics pay.
A decade ago, genomics-based companies were all the rage. Then one by one nearly all of the high-fliers of that era went bust, were acquired, or restructured (Celera, Orchid, etc). One of the last to hang on has been deCode Genetics of Iceland, a company that has produced a raft of important genetic association studies for a range of diseases and traits, from diabetes to heart disease. In 2007 they launched a direct-to-consumer website, deCodeme, and have been trying to build a genomic diagnostic business.
Now deCode has fallen, too, after several rough years punctuated by the recent financial meltdown and the collapse of the Iceland economy.
As deCode's demise (or restructuring?) suggests, genomics alone can't provide the answers we are seeking in personalized and predictive healthcare, though we can be appreciative of the contributions made by deCode researchers in the past and, hopefully, as the saga continues - in the future, writes David Ewing Duncan, journalist and author, and the Director of the Center for Life Science Policy at UC Berkeley.