Research yields promising drug targets impacting underlying biology of the disease; Findings form the basis of deCODE’s most advanced drug discovery program

Reykjavik, ICELAND, July 24, 2002 — deCODE genetics (Nasdaq/Nasdaq Europe:DCGN) today announced the publication of a paper by a deCODE-led team of scientists describing the company’s pioneering work on the genetics of schizophrenia.The paper presents data from deCODE’s pathbreaking population genetics research linking Neuregulin 1 to schizophrenia, as well as the results of subsequent functional studies underscoring the role of this gene in the pathology of the disease. The Neuregulin pathway has yielded druggable targets which deCODE is employing in its collaboration with Roche to discover new and more effective treatments for schizophrenia. The paper, entitled “Neuregulin 1 and susceptibility to schizophrenia,” is published in the online edition of the American Journal of Human Genetics, accessible at www.ajhg.org.

Schizophrenia is a chronic and progressive mental illness affecting between 0.5 and 1.0 percent of the adult population worldwide. Patients frequently suffer from delusions, hallucinations, and blunted emotions, and current treatments are effective only in alleviating some of these symptoms. The causes of schizophrenia are unknown, but the disease tends to run in certain families and is thus known to have a significant genetic component.

deCODE scientists succeeded in establishing the link between schizophrenia and the Neuregulin 1 gene, located on the short arm of chromosome 8, by leveraging the company’s unique resources for pinpointing key genes involved in common diseases. These include a genealogical database covering the entire Icelandic population; unrivalled genotyping capacity and know-how; and the company’s high-density genetic map of the human genome. deCODE’s research brought together genome-wide and detailed genotypic data from more than 800 volunteer patients and unaffected relatives from across Iceland. Company scientists used this data to home in on a particular haplotype – a small segment of DNA that is inherited as a unit – within Neuregulin 1 that appears to confer more than twice the average risk for developing schizophrenia. Preliminary data from association studies in Western European and Asian cohorts suggest that this haplotype is also significantly linked to the disease in broader populations. The findings reported today are further supported by at least five previous studies that offered suggestive linkage between schizophrenia and a region on the short arm of chromosome 8 containing the Neuregulin 1 gene.

deCODE’s functional studies in mice offer compelling additional evidence for the involvement of the Neuregulin 1 pathway in some of the major biological dysfunctions in schizophrenia. Although no previous research has established a link between Neuregulin 1 and schizophrenia, it is critical to neuronal development and to the proper transmission of messages within the central nervous system (CNS). The deCODE team analyzed mice in which certain segments of the Neuregulin 1 or of one of its key receptors, ERB4, were knocked out, and found that the knockout mice exhibited behaviors and disruptions in normal neurotransmission similar to those seen in schizophrenics. deCODE has already performed a high-throughput screen against a promising target within the neuregulin pathway and is continuing its drug discovery work at its Chicago-based pharmaceuticals group. Later-stage drug development work in schizophrenia will be conducted under deCODE’s therapeutics alliance with Roche.

“The exciting results we report today suggest that the Neuregulin 1 pathway provides promising points of intervention for the development of effective new treatments for schizophrenia,” said Dr. Kari Stefansson, CEO of deCODE. “These findings demonstrate our ability to identify key genes in the most complex diseases, establish the function of the genes in the pathology of the disease, and bring druggable targets into development. We look forward to announcing further progress in our work to develop new diagnostics and therapeutics using the targets we have identified, products which we hope will mark an important advance in the diagnosis, treatment and prevention of this terrible illness.”

About deCODE

deCODE genetics is using population genomics 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 discovery, pharmaceuticals, DNA-based diagnostics, pharmacogenomics, in silico discovery tools, bioinformatics and medical decision support systems. 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.

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.