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                                                                    EXHIBIT 10.6

THIS CONSULTANCY CONTRACT is made on the 30th day of August 2002

BETWEEN

(1)     deCODE genetics, Inc., a Delaware
        Corporation with its principal place of business at
        Sturlugata 8
        IS-101 Reykjavik
        Iceland ("Company")

(2)     Vane Associates, a partnership,
        "White Angles"
        7 Beech Dell
        Keston Park
        Keston
        Kent  BR2 6EP
        Great Britain ("Consultant")


IT IS AGREED:-


1     ENGAGEMENT OF SERVICES

      Consultant shall procure that Professor Sir John Vane ("Sir John Vane")
      acts as director and will serve as a member of the Company's Board of
      Directors (the "Board") and perform the duties of a director, in
      accordance with the Company's Amended and Restated Articles of
      Incorporation, Bylaws, and the General Corporation Law of Delaware (the
      "Services"). The Services will take place from time to time as reasonably
      requested by the Company at times mutually acceptable to Consultant and
      the Company at meetings in either Reykjavik or, occasionally, in Boston,
      Massachusetts. Sir John Vane may participate in such meetings by
      teleconference. It is anticipated that the Board will meet approximately
      five times per year and that Sir John Vane's time commitment per year to
      the Company shall not materially exceed that number of days.
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2     COMMENCEMENT

      This Agreement shall be deemed to commence with effect from August 30,
      2002 ("Commencement Date") and shall continue until the close of business
      on the third anniversary of the date of this Agreement and thereafter
      until terminated by either party upon 90 days' written notice to each
      other.

3     COMPENSATION

      In consideration of the Consultant's Services and subject to approval by
      the Company's Board of Directors, which shall be confirmed to Consultant
      prior to commencement, the Company shall pay to Vane Associates:

3.1   an annual retainer of US$12,000 per annum paid in advance on the
      Commencement Date and on each anniversary of the Commencement Date during
      the continuation of this Agreement, pro-rated for part quarters worked at
      the end of the Agreement (if applicable).

3.2   US$3,000 per day for each Board Meeting that Sir John Vane attends whether
      personally or by telephone participation and for each other day on which
      Sir John Vane provides services to the Company at the Company's request
      and

3.3   In addition the Company shall grant Sir John Vane non statutory stock
      options ("Options") to purchase up to 60,000 Company shares of common
      stock of the Company at closing market price on the day prior to the
      Commencement Date on the terms and conditions contained in the stock
      option grant agreement attached as an exhibit hereto The Options shall be
      deemed granted upon signature of this Agreement and the Company shall
      forthwith take such steps and execute such documents necessary to give
      effect to this obligation forthwith upon your signature of this Agreement.

4     FEES

4.1   The Consultant will be entitled to receive the fee referred to above
      payable to its account at
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      HSBC Bank International

      Sort Code :  40-47-79
      Account No : 20295930
      For further credit to First Direct:  SWIFT CODE:  MIDLGB22

      payable in full without deduction for bank transfer charges within 28 days
      of each meeting;

5     EXPENSES

5.1   Company will reimburse the Consultant's first class travel and
      out-of-pocket expenses incurred on behalf of Sir John Vane for travel,
      accommodation and incidental expenses made on behalf of or for the benefit
      of the Company including travelling to and from Company meetings which
      shall be billed to the Company at cost as incurred and shall be supported
      by appropriate receipts and other relevant documentation.

5.2   The Company agrees to reimburse the Consultant all its legal expenses in
      reviewing, negotiating and amending this Agreement and the associated
      Indemnity Agreement.

6     COPYRIGHT

6.1   All copyrights and/or design rights in any work created in the course of
      or under this Agreement shall belong to Company save for papers the
      Consultant and/or Sir John Vane publishes and lectures or delivers where
      the copyright and right to copyright become a moral right and a right to
      use, deliver and exploit which shall belong to the Consultant and/or Sir
      John Vane.

6.2   For the avoidance of doubt Company acquires no rights to any copyright,
      design rights, moral right, patents or similar intellectual property
      rights arising in the course of the Consultant's or Sir John Vane's work
      under any other consultancies or appointments held from time to time.

7     ACKNOWLEDGEMENT AND ASSIGNMENT

7.1   It is agreed that this Agreement shall enure for the benefit of and be
      enforceable by the Consultant and its successors in title.
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7.2   This Agreement is not assignable by either party without the prior written
      approval of the other.

8     AMENDMENTS

      Changes, amendments and supplements to this Agreement must be made in
      writing and signed by the parties.

9     GOVERNING LAW

9.1   This Agreement shall be governed by the laws of England

9.2   By their execution of this agreement the parties hereby irrevocably agree
      to submit to the exclusive jurisdiction of the English Courts.

10    TERMINATION

10.1  This Agreement may be terminated by either party without liability to the
      other on 90 days written notice to expire no earlier than the close of
      business on the third anniversary of this Agreement.

10.2  If either party is in breach of any provision of this Agreement, the
      non-breaching party may in writing give the allegedly breaching party
      written notice to cure or remedy such breach within 28 days of receipt of
      such written notice. If the allegedly breaching party has not cured or
      remedied the alleged breach within that period, then this Agreement may be
      terminated forthwith upon further written notice.

10.3  The Company shall ensure that the Consultant is reimbursed for the
      Consultant's fees and expenses down to the date of termination howsoever
      arising without set-off or deduction.

11    PRE-EXISTING AGREEMENTS

      This Agreement supersedes and replaces in all respects the Consultancy
      Contract dated as of December 1, 1997 between the parties, which
      Consultancy Contract shall be of no further force or effect. This
      Agreement is subject to the understanding that the Consultant and/or Sir
      John Vane are contracted to and affiliated with various organisations and
      other companies and may from time to time become contracted to
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      and affiliated with other similar organisations and other companies,
      including but without limitation on an equity investment basis
      (collectively, the "Affiliated Entities"). It is particularly understood
      that the Consultant and/or Sir John Vane are required to fulfil certain
      obligations to the Affiliated Entities pursuant to the guidelines or the
      policies if any, adopted by the Affiliated Entities or pursuant to a
      contract entered into with such Affiliated Entities.

12    INDEMNITY AGREEMENT

      In connection with this Agreement, Sir John Vane and the Company have
      executed a certain Indemnity Agreement dated as 1 December 1997, which
      agreement shall continue in full force and effect.

13    NOTICES

      Any notice required or permitted to be given under this Agreement shall be
      in writing and shall be deemed effectively served upon personal delivery
      or upon delivery by courier or 7 days after posting by certified mail if
      sent from the USA or by registered post if sent from England, in either
      case sent by express pre-paid air, addressed to the other party at its
      address as shown above or to such other address as such party may
      designate in writing for the purpose of this Agreement from time to time.

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<S>                                          <C>
/s/Kari Stefansson.                          /s/ John Vane

COMPANY                                      THE CONSULTANT
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