IRVINE — Oncotech Inc., a small, money-losing laboratory here that helps doctors select the most effective chemotherapy for cancer patients, filed papers Thursday seeking approval for its initial sale of stock to the public.
In a registration filing with the Securities and Exchange Commission, Oncotech is seeking to raise about $10 million by selling 1.3 million shares of common stock at a price of between $7 and $9 per share. The company said it plans to use proceeds from the sale to expand its business.
After the offering, Oncotech would have just over 3.3 million common shares outstanding with the remaining shares owned by venture capital companies and Oncotech employees, said Paul G. Kanan, president and chief executive.
Oncotech was founded in 1985 by Dr. Larry Weisenthal, an oncologist and pharmacologist, and Dr. Robert Nagourney, an oncologist and hematologist. In 1987, the company attracted a group of venture capital firms, led by Southern California Ventures of Irvine, which provided about $6 million in start-up funding.
Oncotech has lost $5.4 million since its founding, including a loss of $1 million on revenue of $700,000 in the first six months of 1990.
Kanan said the company expects the losses to continue at least through 1991 as the firm continues to invest substantial sums in research and development and establishment of a national sales network.
Oncotech is one of a handful of laboratories, Kanan said, capable of testing the relative effectiveness of various drugs on cancerous tumors sent by hospitals across the country. Drugs used to treat cancer should be carefully selected, Kanan said, because their effectiveness differs from patient to patient.
Another part of Oncotech's business, Kanan said, is working with pharmaceutical companies to develop new cancer drugs.
The tumor specimens received by the laboratory are used to research the effectiveness of new drugs.