A US bankruptcy court says it will allow Iceland’s deCode, a pioneering firm in the genomics field, to continue operations as it goes through Chapter 11 across the Atlantic.

The troubled Reykjavik-based firm filed for bankruptcy in Delaware at the end of last week and the court has approved ‘first day’ motions for the company's petition for relief under Chapter 11. In particular, interim financing from Saga Investments, the ‘stalking horse’ bidder for deCode’s Iceland-based genetics subsidiary is being permitted.

The company was founded in 1996 and created a major database of genetic and medical information, including 140,000 Icelanders. However it has been struggling financially for a long time and so reached an agreement to sell its Islensk Erfdagreining (IE) subsidiary, and its drug discovery and development programmes, including its deCodeme personalised genetic testing service, to Saga.

The Icelandic unit conducts all of deCode's human genetics research and chief executive Kari Stefansson has said that the change in ownership of the operating company will have no bearing on the terms under which it manages and analyses samples and data. He noted in a comment on an article in Nature that the Icelandic subsidiary does not own these samples or data, as “they are owned by the individuals who provide them and are only utilised for the specific purpose, whether research or testing, agreed upon with those individuals and under the regulatory protections under which we work”.

As a result “these resources cannot be sold and are not for sale, and IE's genetics operation cannot be put in a box and taken somewhere else”, Dr Stefansson added. However observers believe that Saga could still sell anonymous genetic information to researchers or pharmaceutical companies.