deCODE enlisted to carry out the latest stage in one of the most aggressive drug development drives ever undertaken by a family-based patients’ organization

Reykjavik, ICELAND, and Libertyville, ILLINOIS, February 12, 2003 — deCODE genetics (Nasdaq/Nasdaq Europe:DCGN) and Families of Spinal Muscular Atrophy (FSMA), an organization founded to promote research leading to the effective treatment of this debilitating and often fatal disease, today announced the signing of an agreement aimed at developing a new therapeutic compound for SMA. Using promising compounds identified through previous FSMA-funded gene- and drug-discovery work, deCODE’s Chicago-based pharmaceuticals group will identify the most promising lead compounds, optimize these compounds, and conduct the medicinal chemistry and scale-up work to develop a potentially effective new drug ready for clinical trials. The three-year agreement is potentially worth $5.2 million, including milestones for the successful development of a compound approved for clinical trials. FSMA will retain all rights to drugs developed under the alliance for use in treating SMA as well as royalties on sales for their use in other indications.

Spinal Muscular Atrophy is a genetic disorder involving the deletion or mutation of one or both copies of the Survival Motor Neuron (SMN1) gene on chromosome 5. This causes a chronic deficiency in the production of the SMN protein, essential to the proper functioning of the motor neurons in the spinal cord and to the control of muscles in the limbs, neck and chest. In the US alone there are more than 6 million carriers of the genetic risk factors for SMA, and the disease affects approximately one in every 6000 live births. SMA is usually diagnosed when babies are less than 18 months old, although certain types of the disorder can appear in later life.

FSMA-sponsored research has contributed not only to the identification of the SMN1 gene, but also to the identification of another gene called SMN2. In most SMA patients the SMN2 gene contains a mutation that leads to a reduction in the amount of SMN protein produced by the gene and to functional defects in most of the protein that is produced. Previous FSMA-sponsored drug discovery work has identified a series of compounds that may increase the expression of the SMN2 gene and thus the amount of fully-functional protein produced. If a compound can be found that can do this safely and effectively, it may be possible to restore the proper amount of SMN protein in the body and slow or reverse the disease process. deCODE’s work will focus on identifying and developing such a compound.

“FSMA’s determination and success in advancing research into spinal muscular atrophy is quite remarkable, and we are proud that they have chosen deCODE to develop and bring into clinical trials an effective treatment. Our drug development team is focused on turning discoveries in genetics into new medicines, and we will be bringing the breadth of our capabilities to bear on this task,” said Dr. Kari Stefansson, CEO of deCODE. “I am confident that we will be successful in delivering a drug ready to start clinical trials.”

“FSMA is committed to finding an effective treatment for Spinal Muscular Atrophy and we are planning for success in deCODE’s research,” said Audrey Lewis, Executive Director of FSMA. “Our belief is that the investments we have made in basic research will soon lead to therapies that can be investigated in human clinical trials.”

As a preparation for clinical trials, FSMA is also funding Project CURE SMA. Project CURE SMA is a multi-centre study part of a worldwide effort to establish baseline measurements in SMA patients, in order to accurately assess the utility of a potential drug or treatment of interest.

“Project CURE SMA represents an important step towards building a foundation from which to launch future therapeutic trials,” said Lewis. “The combination of the deCODE agreement and Project CURE SMA means that we are well on our way to a day when an effective treatment is a reality and not dream.”

About deCODE

deCODE is using population genetics to create a new paradigm for healthcare. With its uniquely comprehensive population data, deCODE is turning research on the genetic causes of common diseases into a growing range of products and services — in gene and drug discovery, DNA-based diagnostics, pharmacogenomics, bioinformatics, and clinical trials. deCODE’s pharmaceuticals group, based in Chicago, and deCODE’s biostructures group, based in Seattle, conduct downstream development work on targets derived from deCODE’s proprietary research in human genetics as well as contract service work for pharmaceutical and biotechnology companies. deCODE is delivering on the promise of the new genetics.SM Visit us on the web at www.decode.com.

About FSMA
Families of SMA is a volunteer-driven nonprofit organization based in Libertyville, IL. It was founded in 1984 by parents of children suffering from SMA. FSMA is the largest international organization dedicated solely to eradicating SMA by promoting and supporting research, helping families cope through informational programs and support, and educating the public and the medical community about SMA. The organization has more than 22 chapters worldwide and more than 5,000 member families. FSMA has funded $12 million towards SMA research, and has already committed an additional $8 million over the next three years. For more information visit the website www.curesma.com or call 1-800-886-1762.

Any statements contained in this presentation that relate to future plans, events or performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, among others, those relating to technology and product development, integration of acquired businesses, market acceptance, government regulation and regulatory approval processes, intellectual property rights and litigation, dependence on collaborative relationships, ability to obtain financing, competitive products, industry trends and other risks identified in deCODE’s filings with the Securities and Exchange Commission. deCODE undertakes no obligation to update or alter these forward-looking statements as a result of new information, future events or otherwise.