What began as discussions around a scientific collaboration a few months ago blossomed into a full acquisition deal between Amgen Inc., of Thousand Oaks, Calif., and DeCode Genetics, of Reykjavik, Iceland, according to Terry McGuire, of Polaris Venture Partners, which helped form DeCode in the 1990s, and in 2010 purchased it out of bankruptcy with Arch Ventures.

"They were exploring the possibility of doing a collaboration," McGuire said, "and it expanded beyond that." The result was the acquisition of DeCode by Amgen for $415 million.

With that purchase, Amgen Inc. made a hefty investment in personalized medicine. DeCode Genetics specializes in developing DNA-based tests to pinpoint disease risk. Amgen said it plans to use the technology to improve its ability to identify and validate targets for drug discovery.

DeCode's scientific strategy is based on analyzing gene sequences and medical information from a population of 500,000 volunteers around the world, including more than half the adult population of Iceland, combined with genealogical records going back more than 1,000 years. That unique dataset has allowed DeCode to build an unprecedented population-level search engine for gene variants related to disease.

"The basis of the company was . . . this idea that population genomics could be very revealing if you have the ability to handle large sums of data," McGuire said.

Within the past year, DeCode has identified gene variants significant for Alzheimer's disease and thyroid cancer, and the company has a number of active collaborations. In 2011, it partnered with Pfizer Inc. to search for gene variants related to systemic lupus erythematosus. And DeCode's partnership with Illumina Inc. has yielded discoveries related to gout and ovarian cancer.

Amgen said the acquisition of DeCode fits with its mission to rapidly develop molecules targeting diseases in its pipeline, while avoiding investment in targets that are not well validated.

In the past, DeCode has had its own pipeline of product candidates, including DG031 and DG051 for prevention of heart attack, and DG041 for arterial thrombosis. But lately the company has focused its resources on the genomics side of its business.

DeCode voluntarily suspended a Phase III trial of DG031 for the prevention of heart attack in 2006 to address a formulation problem with the tablets, which dissolved more slowly over time than expected. In previous trials, the compound showed promise in its intended indication.

DG051, a leukotriene A4 hydrolase inhibitor, was found to deliver significant dose-dependent reductions in leukotriene B4 in patients with a history of heart attack or coronary artery disease in a Phase IIa study.

And DeCode found in a Phase IIa study that DG041 had potential as an oral, antiplatelet therapy, and the firm collected clinical pharmacology data on the drug.

The acquisition by Amgen is quite a coup for a company that was on the verge of bankruptcy liquidation just three years ago. DeCode was hit especially hard by the economic downturn of 2008, taking hits from multiple events. The company had an accumulated deficit of $712.2 million by the end of 2008, and so was particularly vulnerable when Iceland's banking system collapsed.

Adding insult to injury, DeCode became a victim of the failure of Lehman Brothers Inc., losing $30 million that Lehman had invested on its behalf.

What should have been the death stroke came when Stanford Group Co., which had been advising on business strategy and the search for corporate partners, collapsed in February 2009, for reasons unrelated to DeCode.

DeCode filed for Chapter 11 bankruptcy in November 2009. Saga Investments LLC, a fund formed by Polaris Venture Partners and Arch Venture, rode to the rescue, acquiring DeCode and taking it private in order to salvage the company's assets. The acquisition was backed by licensing partner Illumina.

McGuire said the company will continue its operations in Iceland, as before. "DeCode has a fantastic team here. . . . [Amgen] treasures what DeCode has done and wants DeCode to continue on as it has been."

The company will carry out is operations with support from Amgen. "Amgen is an ideal partner for DeCode, given their pioneering status in biotech," McGuire told BioWorld Today. "They completely understand what DeCode is about, and what they're trying to do. I couldn't imagine a better partner for DeCode than Amgen."