Financially struggling Oncor Inc. said yesterday that it has struck an agreement to sell its research products division, one of FTC its strongest revenue-producing units, for $3.2 million to Intergen Co.
The Gaithersburg biotechnology company said the division's 13 employees will be offered jobs at Intergen, a Purchase, N.Y.-based company that is setting up an operation in Gaithersburg.
John Coker, Oncor's chief financial officer, said proceeds from the sale, along with financial support from several directors and an unidentified major shareholder, are expected to provide the company with $4 million by the end of the month.
That is enough to fund operations until the end of the third quarter, Sept. 30, said the financial officer.
The company plans to use some of the cash to beef up marketing of its Inform Her/2neu test, a gene-based test that can predict the recurrence of breast cancer.
Under the deal, Oncor, a maker of biotechnology research products and a developer of gene-based tests for cancer, will be paid $3 million in cash at closing for its genetic and molecular research supplies division.
The division generated about $3 million in sales of chemical mixes called reagents and research kits last year.
Coker said settlement is scheduled for June 29.
The remaining $200,000 will be paid in installments over two years, Oncor said.
Privately held Intergen plans to use the purchase as a springboard for establishing a new office in the technology-heavy Rockville-Gaithersburg area, said Coker.
Executives at Intergen were not available for comment yesterday.
The company markets a line of chemicals used by life science researchers at universities and biotechnology and pharmaceutical companies.
Oncor's sale of the division is one of the moves the company targeted as part of an effort to become profitable next year.
The company's new chief executive officer, Jose Coronas, has embarked on slashing discretionary expenses, raising badly needed cash and focusing the company on selling its breast cancer test and developing gene-based cancer tests.
Oncor disclosed in late March that its accountants questioned whether it could continue operations because of dwindling cash reserves.
It also replaced its chief executive officer and founder, Steven Turner.
The company reported a $10.7 million net loss for the quarter that ended March 31.
Yesterday, Oncor said its cash position will also be strengthened by credit support from several directors and a major shareholder. The firm says they have pledged $1 million to keep the company operating.
Coker said the company might also sell its interests in two other companies to raise cash.
Those assets include Codon Pharmaceuticals Inc. of Gaithersburg, which is attempting to develop drugs to correct gene defects, and a 25 percent stake in Oncormed Inc., also of Gaithersburg.
Oncormed provides genetic testing services to doctors' offices and drug companies conducting clinical trials.
Shares in Oncor closed yesterday at .6875 cents, down .0625 cents.
Pub Date: 6/24/98