Mapping Genes, Saving Lives

For a tiny biotech that has minuscule sales of $6.3 million and is still very much in the red, Oncor has quite a following: J.P. Morgan has accumulated an 11% stake and the Wisconsin State Investment Board has a 9% holding. One reason for their strong interest is "gene-mapping," or more specifically, Oncor's development of DNA probe systems for detecting cancer and human genetic disorders. Does that justify the stock's leap to nearly 7 from 51/2 in mid-July?

"Oncor deserves an even higher price, about double its current price," says one California fund manager. He notes that Oncor is a pioneer in using DNA-based technology for the early detection and management of cancer and genetic diseases, with help from leading human genome research labs, including the Johns Hopkins University School of Medicine.

Oncor, which supplies diagnostic test kits mainly to clinical researchers and pathologists, has the only FDA-approved test for leukemia and lymphoma. And an FDA panel has recommended approval of its test for HPV, human papillomavirus, a precursor to cervical cancer. "DNA probes promise to be faster, simpler, and more accurate than other diagnostic tests," says Stephen Handley at Smith Barney Harris Upham.

Adds Peter Drake, an analyst at Vector Securities International: "Oncor is well-positioned to be one of the commercial leaders in this emerging field." He sees Oncor's revenues doubling to $12 million next year, jumping to $25 million in 1995, and then zooming to $60 million in 1996. He sees earnings of 10 a share next year, 80 in 1995, and $1.20 in 1996. He thinks the stock will hit 12 in a year.

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