A cost-effective method to enable deCODE to extend its leadership in gene discovery to the next challenge in developing market-leading DNA-based diagnostics

August 17, 2008 – deCODE has developed a novel analytical method to increase severalfold the amount of information scientists can derive from the use of SNP-chips to discover novel variations in the human genome conferring risk of common diseases. The method has immediate practical utility for continuing to provide market-leading content for deCODE’s growing portfolio of DNA-based diagnostic tests and personal genotyping products.

In a paper published today in the online edition of Nature Genetics, deCODE describes a method for tracing how large haplotypes – unbroken segments of particular chromosomes – are inherited by individuals through their maternal or paternal lingeages. The ability to track haplotypes back through large family trees – called long-range phasing – resolves a longstanding challenge in genetic analysis. However the method can also be used to leverage the company’s existing genotypic and genealogical data in the search for rarer variants linked to risk of common diseases. Over the past eighteen months, deCODE has employed its population-based resources in human genetics to discover common variations in the human genome conferring risks of a broad and growing range of common diseases. The company’s success in gene discovery to date is underpinned by its ability to conduct genome-wide studies leveraging tens of thousands of participants in its gene discovery programs. The genomes of some 40,000 Icelandic participants have been analyzed with gene chips measuring more than 300,000 single-base variations in the genome (SNPs), common markers that are useful for discovering common variations in the genome linked to risk of disease. Moreover, all of these individuals are linked together in deCODE’s genealogical database covering the entire Icelandic population.

Employing this new method, deCODE can genotype with higher density SNP-chips or even sequence small regions of the genome in a small subset of these 40,000 individuals, and then use the genealogies to understand how many of the entire group carry rarer SNPs that lie within a given haplotype. This will enable large-scale, statistically powerful discovery efforts without having to re-genotype the entire cohort. As sequencing technologies and the highest density chips are currently too expensive to apply to large numbers of cases and controls, this may enable deCODE to time- and cost-effectively take the lead in the search for rarer variants that do not appear on lower-density SNP-chips. These variants may confer relatively high risk of disease in a small proportion of the population, and thereby provide important additional content for deCODE’s pioneering diagnostic and personal genotyping product portfolio.

You can see a video discussion of the findings by deCODE’s CEO Kari Stefansson, lead statistician Augustine Kong, and Chief of Communication Edward Farmer, on deCODE’s blog, www.decodeyou.com. The paper, ‘Detection of sharing by descent, long-range phasing and haplotype imputation,’ is published today on www.nature.com/ng, and will appear in an upcoming print edition of the journal.

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.