12/20 04:43
Reykjavik, Iceland, Dec. 20 (Bloomberg)
-- There aren't many trees in Iceland, where erupting volcanoes, glacial
icecaps and sandy deltas cover the landscape. Still, Kari Stefansson has
built a business based on one type of tree -- the family kind.
DeCode Genetics Inc.'s chief executive
officer is using medical records and blood samples from Iceland's population
to trace 50 diseases. The island's isolation from the rest of the world
for almost 11 centuries until World War II makes genetic trends in disease
easier to trace.
"We're not like an inbred strain
of mice, but we're fairly homogeneous," Stefansson, 52, said in an interview.
"We want to turn the results of genetics into drugs on the market, into
diagnostic tools that I hope will revolutionize health care."
DeCode has specialized in finding
illness-related genes for two alliances with Roche Holding AG worth $500
million. Stefansson now plans to develop his own drugs for Parkinson's
disease, psoriasis and asthma based on DeCode research, though the products
are years away from the market.
Stefansson says it will take at least
two years to develop diagnostics and maybe 10 for a medicine. Meanwhile,
money-losing DeCode trades at a third of a high reached last year before
investors fled from unprofitable companies.
In 2001, DeCode shares have dropped
9 percent, while many German and U.K. biotechnology firms have lost more
than half their value. All seven analyst ratings tracked by Bloomberg for
DeCode are the equivalent of a "buy."
'Early Science'
"It's relatively early science but
I'm convinced if you add the database of DeCode to the pharmaceutical and
diagnostic approach of Roche you might end up with something very exciting,"
said Michel Venanzi, who manages 500 million Swiss francs ($306 million)
at Darier Hentsch & Cie and holds Roche stock.
Stefansson is targeting patients
such as Gerdur Gunnarsdottir, 58. The Reykjavik sculptor said she hopes
her family's history and donated blood will help DeCode find a cure for
multiple sclerosis, which has left her blind in her left eye.
Gunnarsdottir's 38-year-old cousin
also suffers from MS, as does her 20-year-old niece, who is now in a wheelchair
and unable to feed herself.
"She's like a human being living
in a dying body," said Gunnarsdottir. "I would do everything for her."
Osteoarthritis sufferer Oddny Gestsdottir,
88, said she's thinking about the future for grandchildren.
"I would be willing to go to great
lengths if it would help," said Gestsdottir, who recently broke both her
legs within two months. "I don't miss the blood drops I donate."
Founding
The former neurology chief at Beth
Israel Hospital came up with the idea for DeCode while sipping cappuccino
with colleague Jeffrey Gulcher at Starbucks on the Boston hospital's first
floor.
Stefansson founded DeCode in 1996
with $12 million in venture capital, naming Gulcher vice president of research
and development. He has since persuaded other friends and colleagues to
come to his native Iceland, a country about the size of Ohio with a population
of 283,000.
The CEO, dressed in black trousers
and a black Calvin Klein T- shirt to greet a visitor at his Reykjavik headquarters,
works in an office adorned with medical certificates and a Billy Bass fish
that sings "Take Me to the River."
"In the beginning some people thought
he was mixed up, but today he's respected," said Erlingur Bjornsson, a
Reykjavik taxi driver. "He's something special."
Chilean Poetry
Stefansson, who's married and has
three children, reads about 50 books a year and counts Chilean poet Pablo
Neruda among his favorites. A U.S. resident for 20 years, he worked as
a neurology professor at the University of Chicago and later moved to Harvard
Medical Center and Beth Israel.
As a neuropathologist, Stefansson
cut pieces of human brain and viewed them under a microscope to unravel
mysteries of a tumor or disease. As a physician, he counseled terminally
ill patients.
"When I'm dealing with a patient
who has an incurable disease there are no unrealistic goals," he said.
"Hopes, if you can evoke them in the minds of the patients, are extraordinarily
important, even if they are nothing short of an illusion."
DeCode now employs 600 people, and
Stefansson plans to increase his staff to 800 by the end of 2002. The company
is on track to generate full-year revenue of $40 million after posting
a third-quarter loss of $8.9 million, he said.
Genes
"The growth I want to see is in
drug development," said Stefansson, who's considering acquisitions.
DeCode has zeroed in on genes linked
to Alzheimer's disease, schizophrenia, osteoporosis, anxiety, obesity and
stroke. By harnessing them, researchers may be able to eliminate the role
of chance in drug development and reach the 30 percent of patients who
aren't helped by current medicines, Stefansson said.
He also plans to sell drugmakers
yearly $5 million to $8 million subscriptions to DeCode's "Clinical Genome
Miner," a system to help researchers understand the genetic basis of disease.
By combining information about clinical diagnosis, family history and a
person's DNA, scientists can find differences between people with a given
disease and those without it.
Stefansson isn't worried about rivals.
In April, AstraZeneca Plc said it would work with a Chinese university
to find genetic links to schizophrenia using databases of 12.5 million
patients.
"We've been at this for quite some
time and don't feel threatened," Stefansson said. "We feel invigorated."
By Kim Frick
©2001 Bloomberg L.P.