DeCode Genetics Inc. and Roche Holdings SA signed a three-year alliance to discover and develop therapeutics based on the achievements of a previous gene discovery collaboration between the companies.
The deal is an outgrowth of a $200 million agreement from 1998 calling for DeCode to research genes or alleles with mutations that predispose people to 12 diseases, including osteoarthritis, Alzheimer’s disease, schizophrenia, peripheral arterial occlusive disease, stroke, osteoporosis, obesity, anxiety, Type II diabetes and rheumatoid arthritis. (See BioWorld Today, Feb. 3, 1998.)
Kari Stefansson, CEO of Reykjavik, Iceland-based DeCode, said of the new agreement, “This is a reflection of the success of our four-year-old deal with Roche. It is a validation of our capabilities and an exceptional opportunity to put these capabilities to work to generate new medicines to treat major diseases in severe unmet medical needs.”
Roche paid DeCode approximately $70 million in research and development fees and $65 million in milestones on the 1998 deal, scheduled to expire Jan. 31.
Under the new collaboration, the companies will develop therapeutics for four of the 12 disease categories studied as part of the original deal. The four diseases should be determined within the next month.
DeCode will regain rights to further develop products for the eight remaining diseases and will have the right to partner or license them with other companies.
“In 1998 we set out to uncover the genetic basis of a dozen of the world’s most common diseases,” Stefansson said in a conference call with analysts and investors Tuesday. “In four years, DeCode has identified key genetic factors that contribute to 10 of these conditions. We’ve been able to do this based on our population approach, which allows us to scan the entire genome.”
Much of DeCode’s genetic research is conducted on the Icelandic population, which is considered more homogeneous than most others.
Stefansson said he could not discuss detailed financial aspects of the deal, short of saying Roche, of Basel, Switzerland, will provide DeCode with research funding for the next two years.
“In previous alliances with Roche, DeCode in many ways was providing a service and they paid us for the service,” Stefansson said. “And in this alliance, we are participating in the development of the product and taking a significant part of the risk and getting a benefit when the product is on the market. The consequence of that is that it is much more difficult to assess what the total value will be.”
DeCode will receive milestone payments for the development of compounds as well as royalties on the sales of drugs developed under the alliance.
Aside from collaborations focusing on gene-based development and discovery, Roche and DeCode struck a potential $300 million deal last year for DNA-based diagnostics. The five-year deal calls for the companies to develop diagnostics, predisposition screening products and point-of-care informatics products to help doctors evaluate the results of the diagnostic tests. (See BioWorld Today, March 7, 2001, and July 3, 2001.)
In other recent business, DeCode purchased MediChem Life Sciences Inc., of Woodbridge, Ill., in a stock swap worth about $83.6 million. Through the purchase DeCode gained MediChem’s high-throughput integrated chemistry platform; 163 employees with experience in structural proteomics; lead discovery and optimization; combinatorial, computational and medicinal chemistry; and protein crystallography. (See BioWorld Today, Jan. 9, 2002.)
DeCode’s stock (NASDAQ:DCGN) closed Tuesday at $8.99, up 15 cents.