Reykjavik, ICELAND, March 9, 2005 – deCODE genetics (Nasdaq:DCGN) today announced that it has begun enrolling subjects in a Phase I clinical trial for DG041, the company’s developmental compound for the treatment of atherosclerosis of the extremeties, commonly known as peripheral arterial occlusive disease (PAOD). PAOD is a progressive and crippling disease that affects approximately 20% of people over the age of 70 in the industrialized world, and for which there is currently no effective drug treatment. The ascending-dose, single-blind, placebo controlled, randomized trial will evaluate the safety as well as the pharmacokinetic and pharmacodynamic profile of DG041.

“DG041 is the second compound we have entered into clinical trials, and the most advanced to have been developed entirely from our own target and drug discovery capabilities. This program is yet another example of what we believe is the fundamental advantage to our human genetics approach to drug development. By targeting the protein made by a major disease gene, we are in a position to manipulate the key biological pathway involved in the disease. We believe this enables us to develop new drugs for common diseases that have the potential to be effective and specific. Our preclinical data on DG041 were very encouraging and we look forward to sharing with you the results of this trial in a few months time,” said Kari Stefansson, CEO of deCODE.

DG041 is a novel, first-in-class, orally-administered small molecule which has been shown in preclinical studies to be a selective and potent antagonist of the EP3 receptor for prostaglandin E2 (PGE2), inhibiting human platelet aggregation in a dose-dependent manner. deCODE selected EP3 as a target in PAOD through its population genetics research, which linked variations in the gene encoding EP3 to increased risk of the disease.

About PAOD

Peripheral arterial occlusive disease, or PAOD, is a vascular disorder that affects over 10% of the adult population in the industrialized world and one in five people over the age of 70. The initial symptoms of PAOD include intermittent pain in the legs while walking or exercising, due to the narrowing by atherosclerotic plaques of one or more major arteries in the legs. The reduction of blood flow leads to insufficient oxygenation of muscle tissue. As the disease worsens it can lead to tissue damage, ulceration and gangrene, and in extreme cases may require the amputation of the affected limb. The disease is under-diagnosed, and the current mainstay of treatment is surgery to bypass the occluded vessels. At present, no drug treatment is available that targets the underlying causes of PAOD or prevents its progression.

About DG041

Through its population genetics research in Iceland, deCODE identified common versions of the gene encoding EP3 (the PTGER3 gene) that confer increase in risk of PAOD. These variants are believed to increase susceptibility to the disease through heightened expression of EP3. Functional analysis underscores the important role of EP3 in modulating the biology of the platelet and the vessel wall. Binding of PGE2 to EP3 is known to increase platelet aggregation, and EP3 is expressed in smooth muscle cells found in atherosclerotic plaques. In preclinical in vitro studies DG041 has been shown to inhibit human platelet aggregation induced by PGE2, and to do so in a dose-dependent manner. In mice, DG041 has been shown to protect against intravascular coagulation in a model based on prostanoid-induced platelet activation. DG041 has been shown to have minimal effect on bleeding time in animal studies.

About deCODE genetics

deCODE is a biopharmaceutical company applying its discoveries in human genetics to the development of drugs for common diseases. deCODE is a global leader in gene discovery — our population approach and resources have enabled us to isolate key genes contributing to major public health challenges from cardiovascular disease to cancer, genes that are providing us with drug targets rooted in the basic biology of disease. deCODE is also leveraging its expertise in human genetics and integrated drug discovery and development capabilities to offer innovative products and services in DNA-based diagnostics, bioinformatics, genotyping, structural biology, drug discovery and clinical development. deCODE is delivering on the promise of the new genetics.SM Visit us on the web at www.decode.com.

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.