Oncor ousts Turner, names Coronas acting CEO In pursuit of cash, company is planning some divestitures

March 27, 1998|By Mark Guidera | Mark Guidera,SUN STAFF

Oncor Inc., a developer of gene-based cancer tests and biotechnology research products which hasn't had a profitable year since it was founded 15 years ago, said yesterday that its chief executive officer, Stephen Turner, has been replaced.

The Gaithersburg-based company also said it will seek to divest itself of some or all of its noncore businesses, including its interest in an early-stage venture to develop gene repair drugs.

The goal: to raise badly needed cash.

Company executives said yesterday that they want to reposition the company strictly as a developer and marketer of gene-based cancer tests, and become profitable before the year 2000.

Oncor's board of directors voted Wednesday to replace Turner, 51, with Jose Coronas, its board chairman since January.

Turner could not be reached for comment.

Coronas, 55, was named acting CEO of Oncor.

He joined Oncor in December 1996 as a director and management consultant, and had formerly held senior positions with the clinical diagnostic divisions of Johnson & Johnson and Eastman Kodak.

Turner had been CEO and chairman since he helped found the company in 1983. He still is Oncor's leading shareholder.

Coronas said Turner, who has received an annual salary of $240,000 since 1994, has been "reassigned" to the role of chief executive officer of Codon Inc., a company formed by Oncor several years ago to develop drug compounds to repair defects in genes.

Oncor owns a 100 percent stake in Codon, but no longer wants to assume the full financial burden of the start-up. The company hopes to sell off at least a majority interest in Codon, Coronas said.

"The key thing we're doing here is repositioning the company so it can focus on initiatives that have the best value for the future," Coronas said.

Those initiatives, he said, include building sales for the company's recently approved breast cancer test, finding a corporate partner to help it market its cancer tests globally, and divesting the company's businesses which are not related to genetic cancer detection technology.

Neither Coronas nor Oncor President Cecil Kost would estimate how much those businesses are worth. But both acknowledged that they currently provide the lion's share of the company's revenue.

Oncor reported a loss of $22 million on revenue of $10 million for the first nine months of this fiscal year, and a loss of $29 million on revenue of $16 million for 1996.

Kost said divesting some of the company's businesses, such as its biotechnology research supplies division, would raise cash and reduce expenses. He declined to estimate how much the company could save from severing some of its business ventures.

Coronas said the company is in discussions with potential buyers, though he declined further details.

The acting CEO said a key goal of the company is to move aggressively and quickly to become profitable.

"It's taken too long to do that," he said. "It's very important to focus the company clearly with profitability and shareholder trust in mind."

The company's stock has been a lackluster performer for a year, trading in the $3 to $5.25 range. It fell 50 cents to $3.62 yesterday.

As of yesterday, the stock's value was down 62 percent since Oncor conducted a secondary offering in February 1994 to raise $24 million. Shares sold at $8.13 in that offering.

Pub Date: 3/27/98

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