Gene testing firm goes titsup
DNA disease spotting ain't worth spit
The company that all but started the industry of selling gene tests to individuals to predict their likelihood of getting certain diseases has gone bust.
deCODE genetics Inc, said it was entering Chapter 11 - bankruptcy protection - in order to sell all its assets.
The company said it had explored "multiple restructuring alternatives" without success. It said any recovery for shareholders was very unlikely. It hopes to sell its Icelandic business to Saga Investments.
It might seem that running any kind of business from Iceland is tough at the moment - even McDonalds has given up. But this has more to do with the snake oil nature of the personal gene testing business.
The company did uncover genes which showed the carrier was predisposed to certain cancers and schizophrenia. But you might get similar information from family history without paying $1,000 for it.
deCODE genetics began life by testing the Icelandic population, and using the country's medical records, to find genes marking serious diseases which could be extrapolated for the rest of the world's population. You'd think they would have least found a gene for insanely over-leveraging their banking sector.
But what are you meant to do with the knowledge that you're slightly more likely than most to develop schizophrenia? It's enough to make anyone paranoid.
The real problem is that most of the genetic signs the company found were rare and caused only a small percentage of diseases. There is not one clear genetic signifier for most serious diseases, as the industry appeared to promise.
Which is why it managed to burn through more than $300m in funding while making enormous annual losses - $96m in 2007, compared to $85m in 2006 and just $63m in 2005.
23andMe, which offers a similar service, recently had to cut an undisclosed number of jobs. Luckily the company is partly funded by co-founder Anne Wojcicki's husband, bazillionaire Google founder Sergey Brin.
23andMe clearly has friends with deep pockets, and is still spending cash. Alongside medical stuff the company also offers a genetic ancestry service. ®