Oncor has to surrender chief technology asset Cancer test goes to satisfy creditor, who sells the rights

November 25, 1998|By Mark Guidera | Mark Guidera,SUN STAFF

Oncor Inc., the financially troubled Gaithersburg biotechnology company, said yesterday that it had surrendered its chief technology asset -- a genetic test for the recurrence of cancer -- to a creditor which had called due a $4.1 million loan.

In turn, the unidentified creditor sold rights to Oncor's HER2/neu cancer test to Ventana Medical Systems Inc. of Tucson, Ariz., for $5.5 million.

Ventana, a manufacturer of automated instrumentation for testing cell and tissue samples, said it plans to develop an automated system to conduct the test and make it more marketable.

As part of the deal, Oncor has transferred the 20 employees who conduct genetic cancer research and manufacturing of the test to Ventana, said Cecil Kost, president and chief operating officer of Oncor.

That leaves Oncor with 15 employees. Ventana agreed to keep the HER2/neu operation in Oncor's Gaithersburg office, Kost said.

The surrender and sale of the test leaves Oncor with no U.S. commercial assets.

Shares in Oncor closed yesterday at 2 cents, down 8 cents.

When the company first disclosed its financial troubles in March, it said it planned to sell some assets to raise cash and pay debts and to focus exclusively on marketing its cancer test to salvage the company.

The company has sold a research products division, one of its strongest revenue-producing units, for $3.2 million.

Kost said the 15-year-old company, which has never turned a profit, plans to focus on "maximizing value for unsecured creditors and shareholders" from exclusive licenses it holds on other promising medical technologies from the Johns Hopkins University and other universities.

Kost said the company was in discussions with interested parties about possibly selling some of the licenses and partnership agreements to develop and commercialize them.

As for Oncor's cancer test, it can predict which women will see a recurrence of breast cancer after surgery or other treatments by determining if they have the HER2/neu gene, a defective gene trait tied to cancer.

Company officials at the time expressed hope that the test, approved by the Food and Drug Administration in January, would generate strong sales because of the recent FDA approval of Genentech Inc.'s Herceptin, a powerful new drug to treat breast cancer.

One of the hurdles Oncor initially faced with its test was patient and physician resistance to such cancer predictor tests because of a lack of treatment options to address recurrence. Herceptin has shown promise in treating advanced breast cancers tied to the HER2 gene defect.

Publicly held Ventana said Oncor's test and the equipment it sells to conduct the test would complement the company's existing molecular instrumentation and diagnostics business.

Ventana said it expected HER2/neu sales to climb next year.

Pub Date: 11/25/98

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.