Icelandic company deCODE Genetics has signed an agreement with American company Saga Investments LLC on the latter company’s acquisition of deCODE and its entire operations, as announced in a statement from deCODE this morning.
The headquarters of deCODE in Reykjavík. Photo by Páll Kjartansson.
Saga Investments is an investment company owned by Polaris Venture Partners and Arch Venture Partners, which are well-known investors in the field of biotechnology in the US, visir.is reports.
The statement explains that the board of deCODE has been looking into various options in the past month to reorganize the company’s operations.
These include selling single operational entities and medicine that is currently in development, in addition to reaching agreements with the owners of outstanding changeable shares and selling new capital stock.
The agreement with Saga Investments was made in accordance with section 363 of the American insolvency law. It is dependent on various conditions, such as the approval of courts.
Also, a transparent public auction process must take place, organized by the insolvency court, where all interested parties can make bids on the assets and operations of deCODE in competition with the current binding offer from Saga Investments.
After the sales process is completed and a final acquisition agreement is made, it is assumed that the mother company deCODE Genetics Inc. will go through insolvency proceedings with approval of the court.
Considering the vastness of the mother company’s debts, it is highly unlikely that deCODE’s shareholders will be given the full value of its sold assets.
Saga Investments are planning to maintain deCODE’s operations in its current form.
DeCODE has also made a temporary funding agreement with Saga Investments so the company can continue operations during the period of moratorium on its payments. It is not expected that service to deCODE’s customers and partners will suffer in the process.
The statements points out that the moratorium on payments is only in the name of deCODE Genetics Inc. but not its daughter company, Íslensk erfdagreining.
Click here to read more about deCODE.