Jim Shrine

Oncor Inc. said Tuesday that it formed a drug-developmentsubsidiary, which raised about $3 million in a private placement ofconvertible preferred stock.

The subsidiary, OncorPharm Inc., is working out of the sameGaithersburg, Md., site as Oncor. William Ryan Jr., a physician andmolecular biologist most recently with New York-based venturecapital firm The Sprout Group Ltd., was appointed president andCEO.

The company intends to design pharmaceuticals for site-directedrepair of damaged human genes. Its plan is to create drug candidates,do certain preclinical experiments, and then find corporate partnersfor clinical development and marketing, Ryan said.

"Basically, our business will be to sell IND [investigational newdrug] packages to pharmaceutical partners," Ryan told BioWorld,"and not try to be a pharmaceutical company. We're going after [12to 14] indications, the first of which is cancer."

Oncor, the parent company, makes and markets DNA diagnosticprobes for identifying genetic defects, as well as selling equipmentfor use by pathologists and researchers. Another affiliated company,OncorMed Inc., uses that and other technology for the early detectionof cancer and other genetic disorders.

"OncorPharm uses the same kind of human genome information, butwe will be designing pharmaceuticals," Ryan said. Some of thetechnology on which the new company is based comes fromcollaborations made over the years by Jay George, Oncor's chiefscientist.

In addition to human genome work, George has worked withscientists involved in deciphering the code by which third-strandoligonucleotides bind to duplex DNA, Ryan said, as well as thosewho use third-strand DNA linked to DNA-interacting drugs, totrigger site-directed repair of gene mutations.

"A variant on that technology allows us to trigger site-specifichomologous recombination," Ryan said. That allows OncorPharm totake a good copy of a gene from a patient, copy it into the bad geneand restore the damaged gene to its normal structure and function."This technology allows us to either repair point mutations orstimulate homologous recombination," he said.

After cancer, the company's development plan targets sickle cellanemia and drug-resistant tuberculosis. There also will be anantifungals program and one in the herpes simplex family of viruses,particular in the virus' latent stage.

"I have tremendous support from Oncor," which currently holdsabout two-thirds of the subsidiary, Ryan said. "I get access to anumber of important and useful technologies at very reasonableterms. Oncor has a first-rate system for keeping in touch withuniversity scientists and getting their foot in the door when new genesare found."

The new company actually was created last June with seed moneyfrom Oncor. Most of the new money came from institutionalinvestors, with the rest coming from individuals. Ryan said a team oforganic chemists from New York is expected to join the company inJune.

"We provide the most direct pathway for making pharmaceuticals outof human genome information," Ryan said. "With our technology youmay be able to create pharmaceutical candidates within a week or twoof gene discovery."

The company will be able to test drug candidates against genemutations using a yeast-based assay screening system that will giveefficacy information as well as a preliminary read on toxicity, Ryansaid. If the gene returns to normal function, the work will show notonly that the gene is involved in the disease process but that thecompany has a pharmaceutical candidate. n

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