OncorMed Inc., a spin-off company from Gaithersburg-based Oncor Inc., yesterday raised $8 million in an initial public stock offering to finance the company's effort to develop techniques for early detection and treatment of cancer using genetic discoveries.
The new company sold 1.3 million shares at $6 a share. The net proceeds to the company will be $6.5 million, after payments associated with the offering.
The underwriter is Gaines Berland Inc., a New York investment banking company.
Oncor, which owns 42.1 percent of OncorMed, decided to spin off the subsidiary because it primarily provides services rather than produce genetic testing medical kits, as its parent company does, said Stephen Turner, chairman and and chief executive of Oncor.
"It's a service business vs. a manufacturing business," he said.
The stock's prospectus said the stock involves a "very high degree of risk" because the company has lost money since it was founded in July 1993 and has an accumulated deficit of about $2.3 million.
Gaines Berland has the option to purchase up to 200,250 additional shares to cover over-allotments and has been issued warrants to purchase an additional 133,500 shares of OncorMed stock at an exercise price equal to $6.90. The stock will be traded on the Nasdaq SmallCap Market under the symbol ONCM.