Tue Sep 30, 5:42 AM ET

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LONDON (Reuters) - Icelandic researchers said on Tuesday they had found a gene that in different versions determines whether people are predisposed to being obese or thin.

Scientists have long suspected a genetic link in determining how our bodies regulate weight. Now Icelandic biotechnology company deCODE genetics Inc says it has isolated a specific gene which, in different forms, tends to make us either overweight or underweight.

The finding is the result of analysis of DNA from more than 1,000 Icelandic women.

"Obesity and thinness are two sides of the same coin," said deCODE Chief Executive Officer Kari Stefansson. "This is an important step toward developing new drugs that can treat obesity, perhaps by utilizing the body's own mechanisms for promoting and maintaining thinness."

The Reykjavik-based company, which signed an obesity drug research deal worth up to $90 million with Merck and Co Inc last year, will receive an unspecified milestone payment from the U.S. pharmaceuticals giant for the discovery.

Set up in 1996, deCODE is trawling Iceland's gene pool -- which has changed little since the Vikings arrived in the ninth and 10th centuries -- to tease out links between genes and common diseases.