Diagnon Corporation of Rockville, Md., has entered into a preliminaryagreement with an unnamed U.S. university for the creation of a newcorporation to develop and test cancer treatments discovered by theuniversity's medical faculty. The New York City-based investmentbank, Slusser Associates Inc., is also a party to the agreement.The agreement is subject to approval by the university, appropriatepatent rights, contractual arrangements, and ability to arrange privatefinancing on a "best efforts," non-underwritten basis.Diagnon's president and chief executive officer, John Landon, will alsobecome chief executive officer of the new corporation. Diagnon willhave a equity stake in the new company that will increase over time,based on performance. Diagnon will also provide management,administrative, and other services.The new corporation will focus on technologies for a controlled, timedrelease drug delivery system for anti-cancer materials and for thegenetically-engineered targeting of tumor antigens that were developedby the university's faculty.More than 90 percent of Diagnon's current activities focus on contractwork for several institutes within the National Institutes of Health andrelate to the breeding and housing of animals used in medical research.Landon said the company has been looking for opportunities to spin offinto other areas, and the new corporation presents an opportunity forDiagnon to take an equity position based on patent rights. _ PhilippaMaister
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