Biotech start-up plans $10 million stock issue

June 29, 1994|By David Conn | David Conn,Sun Staff Writer

OncorMed Inc., a Gaithersburg biotechnology start-up firm, is looking for $10 million or so from public investors to help it develop its genetic cancer-testing products.

The year-old company, which is 83 percent owned by Bethesda-based Oncor Inc., filed a registration statement with the Securities and Exchange Commission Monday to sell as many as 1.67 million shares and warrants in a public offering. The tentative offering price is $6 a share.

The offering is expected in about a month, according to John Coker, chief financial officer of the parent company Oncor, which funded the creation of OncorMed in June 1993. After the offering, which is being managed by Gaines, Berland Inc. of New York, Oncor will own a bit more than 40 percent of OncorMed, he said yesterday.

"Oncor originally sponsored all of the research that has led to the technology that it now licenses to OncorMed," Mr. Coker said. "We think OncorMed will generate a good deal of license revenues for us, and become a large customer for the products we sell."

OncorMed's main product is a proprietary data base of more than 300,000 cancer patients from about 60,000 families. Through that data base, and the patterns the company is able to discern from the cancer histories, OncorMed can help patients statistically analyze their susceptibility to various forms of cancer, and recommend the appropriate diagnostic tests.

Oncor, by contrast, develops and sells genetic-based cancer detection products for sale to research labs and some medical clinics throughout the world, Mr. Coker said. If OncorMed is successful, its software analysis may provide a market of customers for Oncor's products.

That may be a big if. Neither Oncor nor its subsidiary has shown a profit.

The parent company last year lost $11 million on $9.3 million in revenues. It raised $25.6 million in February by selling 3.15 million shares to the public at $8.125 a share. Yesterday its stock closed at $5.50, down 12.5 cents.

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