7: Business: Iceland's Privatised Gene Bank for US StockMarket
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UK Times 10 February 2000.
Nasdaq listing beckons deCODE
BY PAUL DURMAN
DECODE GENETICS, the controversial Icelandic research company, is about to press ahead with the Nasdaq listing that will make it one of Europe's largest biotechnology companies.
deCODE genetics, valued at about $1.5 billion (£930 million) in the limited trading on the "grey market", may file its preliminary prospectus with the US Securities & Exchange Commission as early as today. Morgan Stanley, the company's banking adviser, will seek to raise at least $100 million from investors in the US and Europe.
The Icelandic Government cleared the way for deCODE's initial public offering last month when it granted the company a licence to create a national health genetic database that will be a powerful tool in uncovering the genetic basis of disease.
Iceland's almost homogeneous population - little disturbed by immigration since the Vikings arrived more than 1,000 years ago - makes it peculiarly attractive for genetic research.
The purity of the gene pool makes it easier to identify which genes are involved in disease and which influence response to medicines.
Iceland also has very detailed health records and family tree data stretching back hundreds of years. However, giving access to these records to a private company has been fiercely opposed by the Icelandic Medical Association, which is concerned that the database could be misused by employers and insurers to discriminate against the potentially unhealthy. deCODE is also being sued for copyright infringement by an Icelandic rival.
Morgan Stanley is likely to talk down the value of deCODE, suggesting a valuation closer to $500 million. However, with the buoyant US appetite for biotech IPOs, industry experts believe the company will quickly race to a heady premium. One investor said: "deCODE is going to go like a bomb. It would not surprise me to see its value reach $2 billion or more."
deCODE is headed by Kari Stefansson, a former professor at Harvard Medical School with a reputation for flamboyance that sets him apart from his typically reserved countrymen. It has a research collaboration with Roche of Switzerland that is potentially worth $200 million.
More than half of the company's shares are believed to be owned by Icelanders, but Atlas Venture, Alta Berkeley, Polaris Venture Partners and Adventa International also have substantial stakes.
Greens/European Free Alliance Group
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