As a former DCGN investor who made a bit of money on it, and looks at it from time to time to see if it is worth jumping in again, I think that the litigation with the Children's Hospital of Philadelphia is probably much more significant a risk than any problems with dg031. After reviewing the docket of the case, one thing is obvious, namely, it is a toss up. If DCGN loses, look for it to lose up to as much as 50% of its market value. In the meantime, Steffanson and everyone else at DCGN is naturally distracted.......and the legal expense must be huge.
Bottom line: too risky.
Here's some good background:
topix.net
A legal cure?
Philadelphia Daily News
November 26, 2006
Our databases go back to the settlement of Iceland When Kari Stefansson set out to coax the secrets of the genetic code from the DNA of 100,000 volunteers, critics called the idea crazy - even unethical.
Though his company has yet to turn a profit, he's proved himself to the scientific world with a series of findings connecting genes to 15 disorders including stroke, diabetes and asthma. His gene-hunting concept worked so well that two teams of attorneys have been fighting over it in a federal courtroom in Philadelphia for much of the fall.
Stefansson's company, deCODE Genetics, sued Children's Hospital of Philadelphia, where scientists had been gearing up for a similar endeavor, collecting DNA from 100,000 children. Last week the two sides wrapped up weeks of testimony in U.S. District Court, though the lawyers say it may take months for a judgment to be reached.
In his testimony, Stefansson claimed his former friend and colleague, Hakon Hakonarson, stole proprietary information and deceived him when he left deCODE to set up Children's Hospital's Center for Advanced Genomics in the spring.
To hear Hakonarson tell it, Stefansson drove him and others away from the company with irrational, sometimes abusive behavior. The 45-year-old director of Children's Hospital's new center said Stefansson 'fired' him on May 25 despite that fact that he'd already resigned to take the $340,000-a-year job at Children's.
In his testimony, Hakonarson's tale grew stranger. Later that afternoon, Stefansson invited him to share a $500 bottle of wine at a stable where the two Icelandic scientists had spent many weekends together tending horses and riding.
When the bottle was empty, Hakonarson said, they separated and he never heard from Stefansson again.
Until he was sued.
The lawsuit threatens to derail Children's $39 million genetic ambitions, which are ultimately aimed at a new class of drugs and perhaps a new kind of medicine.
On May 24, the day before he broke off contact with Hakonarson, Stefansson was at his newly built headquarters in downtown Reykjavic, where he'd agreed weeks earlier to an interview with The Inquirer.
It was a frigid and blustery day but deceptively balmy inside the glass and metal structure that allowed the sunlight to stream into an open atrium.
Around 6-foot-5 with a weathered face, Stefansson, 57, looked like he'd be more at home exploring the coast of North America than running a laboratory.
But he seemed to be in a foul mood.
After ushering two journalists into a conference room, Stefansson sat down and abruptly buried his head in his hands. After a long and awkward silence, he looked up and started to talk.
For more than an hour he expounded on the amazing properties of DNA and the way genes travel through human populations, brusquely brushing aside questions that interrupted his flow. Eventually he got around to explaining the approach behind his company's achievements and the reasons he would later guard them so fiercely.
Stefansson said he decided to go to medical school while drinking with a college friend at the University of Iceland. He chose neurology because it was fascinating and because he has a brother with schizophrenia.
deCODE, he said, was born from an idea that came to him years later - around 1995 - while he was drinking coffee in a Starbucks near Harvard, where he was a tenured professor.
At the time, the medical research world was banking so much on the promise of human DNA it had embarked on a $3 billion attempt to spell out its chemical code through the Human Genome Project.
But the results of all that wouldn't reveal the small variations between people that render some of us more vulnerable to Alzheimer's, diabetes, heart disease, or schizophrenia. Stefansson's plan: to collect DNA from thousands of people, and search it for common variations connected with these and other diseases.
He decided to return to his native Iceland and do it through his own private company.
Naysayers called the venture impractical. The Icelandic Medical Association cautioned the public that volunteering DNA could infringe on personal privacy in a way never before imagined. 'It did sound a bit Orwellian,' Stefansson said.
But in the end deCODE recruited around 110,000 volunteers - more than a third of all the citizens of Iceland. Many also bought deCODE stock, and public support and positive press has since risen and fallen with the share prices, which plunged several years ago to a fraction of their peak value.
It's often reported that the big advantage of studying Icelanders is that they're all the same, but that's a myth. 'We're a little more homogeneous than the French and English, similar to the Finns and Basques, but less so than the Inuit,' he said.
What really makes Icelanders' DNA so attractive is most of them know who their ancestors are. That allows geneticists to construct massive family trees and trace diseases as they run through extended families. Equally critical: Icelanders also have meticulously catalogued medical records kept by their government health system.
Stefansson traces his own lineage back to Egil Skallagrimsson, a 10th-century Viking identified in the sagas as having the unlikely dual career of poet and murderer.
Later that day the company's genealogist, Thordur Kristjansson, printed out Stefansson's personal tree. 'Our databases go back to the settlement of Iceland' in the ninth century, he said, when Vikings arrived fleeing Norway's oppressive rulers. Many came with women they'd kidnapped from Ireland.
Genealogy is part of the culture here, he said during an interview in an office down the hall from Stefansson's. Using parish and census records along with personal genealogies, deCODE's computers now store six generations of ancestry for their thousands of DNA donors.
'He does have something unusual here,' Kristjansson said, as he eyed Stefansson's family tree. Several generations back two brothers married two sisters, he said, and then the children of each couple - cousins twice over - married each other.
It was this depth of genealogy that helped them dig out more than 15 genetic variants associated with diseases - including prostate cancer, diabetes and heart disease.
And some surprises came up when collaborators at the University of Pennsylvania applied deCODE's genetic analysis to Philadelphia's more ethnically diverse population.
Take for instance a gene called FLAP, Stefansson said, which is associated with risk for heart disease. It comes in two types and which type you carry makes almost no difference if you're white. Having one copy of the 'bad' version of the gene increases your risk 16 percent. But here in Philadelphia, researchers found, that same genetic variant increases your risk 250 percent if you're of African ancestry.
One explanation Stefansson offered was that Africans aren't adapted to this genetic variant, which probably didn't exist in the original human population in Africa, but cropped up about 50,000 years ago in Europe.
In the Reykjavic interview, Stefansson had more stories to tell about the history of life that deCODE's work was unlocking from the genetic code. But fascinating science won't necessarily get back the $500 million investors have sunk into deCODE.
For that, someone has to translate the science into marketable drugs or diagnostic tests. In one case, for example, deCODE uncovered a genetic variant associated with heart disease, and it turned out that the variant led to extra production of a protein involved in inflammation. Now a drug is in development to block the inflammatory protein.
But other scientists in academe and industry are racing to get drugs built on their genetic discoveries too. And now there's a new wrinkle: Scientists are rapidly adopting a much faster method of reading DNA called Genome Wide Association, or GWA. Though deCODE is adopting this approach too, some scientists say its emergence is likely to help competitors catch up.
From Stefansson's perspective in the lawsuit, Hakonarson turned from ally to competitor when he came to Children's, which, while an academic institution, does also seek profitable ties with industry.
Hakonarson's testimony revealed that he did transfer files with deCODE information that was mixed up in his own personal files and that he gave his password to colleagues who were also defecting to Children's. In defending himself, Hakonarson said any alleged theft was inadvertent and that he also thought he would continue to collaborate with deCODE.
If Children's loses, Hakonarson could be taken off the project he came to Philadelphia to run and the operation could be set back years. A loss for deCODE could further threaten Stefansson's gamble to turn gene discoveries into profits.
The fate of the two former friends, and more widely of Philadelphia's and Iceland's scientific futures, now rest in the hands of the court. |
