For 10 years, DeCode Genetics Inc. has worked to discover the underlying cause of disease by studying the Icelandic population - with the ultimate goal of finding effective therapies to develop.

Now, the Reykjavik, Iceland-based genetics company is moving its lead product into a Phase III trial under a special protocol assessment with the FDA. The candidate, DG031, has shown promise in preventing heart attacks among those with coronary artery disease.

DG031 is an inhibitor of the 5-lipoxygenase activating protein known as FLAP, which, along with LTA4H, modulates the part of the leukotriene pathway that leads to the production of leukotriene B4. LTB4 is an inflammatory mediator expressed in atherosclerotic plaques.

Variants of the genes encoding FLAP and LTA4H appear to increase the production of LTB4 and, therefore, the risk of heart attack.

DeCode completed Phase II trials last year showing that DG031 reduced the production of LTB4 in a dose-dependent manner. It was well tolerated and did not have serious side effects. DeCode gained rights to DG031 in November 2003 when it licensed it from Bayer AG, of Leverkusen, Germany. It was interested in the product because it inhibited FLAP, which was the first gene DeCode isolated in its own research.

Bayer was developing it to treat asthma, although the program was discontinued due to lack of results. Bayer is entitled to milestone payments and royalties on potential sales of the product. Clinical trials to date, including those conducted by Bayer, have involved about 2,000 people who were dosed with DG031.

The Phase III trial is designed to enroll about 3,000 patients with a history of recent heart attack. It will be randomized, double blinded and placebo controlled, and will be conducted at several different centers throughout the U.S. where it will evaluate a dose of 500 mg of DG031 twice daily. The primary endpoint is a composite of reduction in fatal and non-fatal heart attack and stroke, hospitalization for unstable angina and the need for urgent revascularization. An interim analysis will occur once half of the target number of events has been reached.

The SPA could enable DeCode to file for regulatory approval in the U.S. based on the one trial, if it achieves the pre-specified endpoints.

The company expects to enroll the first patients within the coming weeks. DeCode has retained clinical research organizations to run the trial, manufactured more than 3 million tablets and is readying more than 100 study sites, said the company's CEO, Kari Stefansson, in a statement.

Stefansson could not be reached for comment Thursday.

Heart attack affects almost half of men and a third of women older than 40. While there are effective drugs available, such as statins, for treating certain risk factors, there is nothing that helps prevent the pathogenesis of the disease itself.

Founded in 1996, DeCode has applied a population approach to discover and target key biological pathways involved in everything from heart attacks to cancer. More than half of Iceland's population has participated in one or more of the company's gene discovery programs.

DeCode over the last few years has transformed itself from a gene discovery company to one also focused on drug development. In addition to DG031, two other products are in clinical trials: DG041 for peripheral arterial disease, which should enter a Phase II trial this quarter, and another drug for asthma, which has completed a Phase II trial.

At the preclinical stage, DeCode is evaluating DG051 for heart attack and DG061 for pain, and is working on other early products for vascular disease and stroke, Type II diabetes, schizophrenia and obesity. By early 2007, the company expects to have five programs in the clinic.

The company raised $198.7 million, including an overallotment option, in its initial public offering conducted in July 2000. As of Dec. 31, DeCode had $155.6 million in cash, cash equivalents and investments.