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Court Approves Sale of Decode Assets to Saga Investments

NEW YORK (GenomeWeb News) – A Delaware bankruptcy court has approved the sale of Decode Genetics' assets to Saga Investments, according to court documents filed yesterday.

Decode said in November that it had filed for Chapter 11 bankruptcy protection after it had struggled financially for several quarters and received multiple threats of delisting from the Nasdaq stock exchange. The firm's shares have since been suspended from trading on the exchange.

At the time of the bankruptcy filing, Decode also said that it planned to sell its Iceland-based subsidiary, Islensk Erfdagreining, and its drug discovery and development programs to Saga, an outfit with financial backing from Arch Venture Partners and Polaris Venture Partners, both of which had previously invested in the Reykjavik, Iceland-based firm.

According to the documents filed yesterday, the Delaware court approved the sale of certain assets of Decode pursuant to a Nov. 16 asset purchase agreement between DeCode and Saga.

Terms of the original asset purchase agreement call for Saga to purchase Decode's assets for a cash consideration of between $3 million and $11 million, depending on amounts outstanding from a previous loan agreement between Saga and Decode.

The purchase price will also include an additional cash consideration equal to 25 percent of the net cash proceeds from the sale, licensing, or monetization within two years of certain Decode drug compounds in development, minus $3 million; as well as a non-voting ownership interest in Saga of approximately 15 percent, according to the filing.

Calls to Arch Venture Partners seeking additional details about the purchase price were not returned in time for this publication. Polaris Venture Partners' Kevin Bitterman, who is listed as a contact in the asset purchase agreement, declined to comment on the sale until next week.