Product development alliances

In addition to our proprietary drug development programs, deCODE also has pursued product development alliances with major pharmaceutical and biotechnology partners. These alliances have enabled us to leverage our partners' expertise and market leadership in selected areas, spreading the investment and risk involved in bringing products to market and generating near-term revenue.

In May 2006 deCODE and Illumina announced the formation of a strategic alliance to co-develop and commercialize DNA-based diagnostic tests in several major disease areas. The alliance employs Illumina’s platform for high-multiplex single-nucleotide polymorphism (SNP) genotyping to develop tests for gene variants deCODE has previously shown to have impact on the risk of a growing number of common diseases with major public health impact. The alliance will initially focus on the development, validation and commercialization of specific diagnostic tests for variants in genes conferring risk of heart attack, type 2 diabetes and breast cancer.

As part of the agreement, Illumina installs its SNP genotyping platform at deCODE, enabling deCODE to expand its contract genotyping business to offer Illumina platform and assay technologies together with deCODE’s proprietary analytical services for customers.

Since the beginning of their first partnership in 1998, deCODE and Roche have announced breakthrough discoveries in the genetics of common diseases, including osteoarthritis, Alzheimer's disease, schizophrenia, peripheral artery disease (PAD), stroke, osteoporosis, obesity, anxiety, type 2 diabetes and rheumatoid arthritis. In 2002, deCODE and Roche announced the formation of a three-year alliance focused on discovering and developing novel drugs in select disease programs from their earlier agreement. In late 2004, deCODE and Roche formed a collaboration to co-develop PDE4 inhibitors for the treatment and prevention of vascular diseases, including stroke.

In 2004 we entered into an agreement with Merck to conduct information-rich clinical trials (IRCT) on a range of Merck's developmental compounds that Merck selects for inclusion into the program.

The IRCT paradigm utilizes deCODE's population approach and resources to facilitate the selection of optimal trial cohorts and the analysis of patient responsiveness to drugs in relation to a range of phenotypic and genetic data. The companies may also pursue the development of pharmacogenomic tests to identify patients for whom a given drug may be particularly effective. deCODE will receive royalties on sales of drugs and diagnostics developed as part of the alliance.

In 2002 we entered into an alliance with Merck to identify, validate and prioritize a series of drug targets to take into development. Under the agreement, the research and development portion of which expired in 2005, we discovered three genes linked to obesity and Merck has generated lead series of compounds against one of the targets we have validated through our genetics research.