deCODE Genetics Sinking Low

deCODE Genetics Sinking Low

by Dr. Hsien-Hsien Lei
Posted October 20, 2008 in Business of DNA

Nasdaq and taxi by victoriapeckham.deCODE Genetics is still sinking after it laid off 15% of its workforce this past March. At the time, I was told that I misread CEO Kari Stefansson’s remarks on the potentially negative future of the personal genomics marketplace but now I wonder if I was on target after all.

According to Portfolio’s David Ewing Duncan, deCODE may have its stock delisted from the Nasdaq Stock Market if it can’t “raise its market cap over the $50 million minimum by October 30.” Recent negative publicity surrounding the launch of its breast cancer genetic test couldn’t have helped either. Duncan also says that other biotech companies may suffer if they can’t find more investors or credit. Some may even choose to sell out to Big Pharma.

Sounds bad.

With the global economic slowdown that could lead to a major recession, we are being warned to downsize our lifestyle and to downsize NOW before we lose our jobs, our homes, and who knows what else. As I’ve mentioned before, personal genomics companies rely on people having disposable income to spend on non-necessities.

Times are going to get rough and not just for deCODE.

Photo credit: Victoria Peckham

(3 comments)


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3 Comments

Comment by DNA MAN

In response to the posting: deCODE Genetics Sinking Low , I have the following comments. Almost everyone now realizes that the way to limit medical costs is to increase preventive measures. Of the over two trillion dollars a year we spend on health care, about 75% goes toward chronic diseases like heart disease and diabetes, which are readily amenable to lifestyle changes. Knowing ones risk for these conditions is the first step toward prevention. Navigenics (www.navigenics.com ) offers over 20 conditions to focus one’s efforts depending on risk. It also provides information on improving one’s health (http://blog.navigenics.com/).
So the comment, “personal genomics companies rely on people having disposable income to spend on non-necessities” is a bit misleading. I would hardly call prevention a “non-necessity”. Let the numbers speak to “necessity”. The cost of genetic screening among the three top companies ranges from $400 to $2500 depending on the level of service. The cost of treating colon cancer diagnosed early is $30,000 per episode. Cost at a later stage, $120,000 per episode. National cost for treatment of new colon cancer cases in 2007, $2.4 billion. (www.eifoundation.org/national/nccra/report_card/docs/CRC_Cost_Fact_Sheet.doc -).
I am not so sure that risk assessment by genome scanning is a “non-necessity”.

 
Comment by Misha

Hi Hsien:

I’m not sure selling out to Big Pharma is such a bad thing. I would imagine it’s what many of these companies have hoped for all along, albeit at a much higher price…

 

[...] financial troubles of deCODE Genetics continue to grow following the massive layout last March. Eye on DNA touches on the [...]

 

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