ONCORMED INC
8-K, 1998-03-05
MEDICAL LABORATORIES
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                          SECURITIES AND EXCHANGE COMMISSION


                                Washington, D.C. 20549



                                       FORM 8-K


                              Current Report Pursuant to
                              Section 13 or 15(d) of the
                           Securities Exchange Act of 1934


       Date of Report (Date of earliest event reported):      February 27, 1998
                                                         ----------------------

                                    Oncormed, Inc.
       ------------------------------------------------------------------------
                (Exact Name of Registrant as Specified in its Charter)

                                       Delaware
       ------------------------------------------------------------------------
                    (State or Other Jurisdiction of Incorporation)


        1-13768                                         52-1842781
- ------------------------                   ------------------------------------
(Commission File Number)                   (I.R.S. Employer Identification No.)


          205 Perry Parkway, Gaithersburg, MD             20877              
       ------------------------------------------------------------------------
        (Address of Principal Executive Offices)        (Zip Code)           


                                    (301) 208-1888
       ------------------------------------------------------------------------
                 (Registrant's Telephone Number, Including Area Code)

                                         N/A
                                         ---
            (Former Name or Former Address, if Changed Since Last Report)


<PAGE>

ITEM 5.   OTHER EVENTS


     On February 27, 1998,  Oncormed, Inc., a Delaware corporation (the 
"Company"), entered into a Convertible Preferred Stock Purchase Agreement 
(the "Stock Purchase Agreement") with certain unaffiliated investors 
(collectively, the "Investors").  Pursuant to the Stock Purchase Agreement, 
the Investors purchased a total of Three Hundred (300) shares of the 
Company's 6% Series A Convertible Preferred Stock (the "Series A Stock") from 
the Company for Three Million Dollars ($3,000,000).  In addition, pursuant to 
the terms of that certain Investor's Rights Agreement, dated February 25, 
1997, by and between the Company and Incyte Pharmaceuticals, Inc. ("Incyte"), 
Incyte has the right, exercisable on or prior to March 7, 1998, to purchase 
Thirty Three (33) shares of the Series A Stock for an aggregate of Three 
Hundred Thirty Thousand Dollars ($330,000).

     The holders of Series A Stock may be convert their shares at any time 
into shares of the Company's common stock, $0.01 par value per share (the 
"Common Stock"), at a conversion price per share equal to the lesser of (i) 
$7.5625 or (ii) a percentage (ranging from 97% to 85% depending upon the 
timing of such conversion) of the average of five (5) closing bid prices of 
the Common Stock over a thirty (30) trading day period immediately preceding 
the time of such conversion.  In addition, at any time on or after 
February 27, 2000, the Company may require that the Series A Stock be 
converted into Common Stock if the closing bid prices of the Common Stock 
for at least twenty (20) consecutive trading days immediately preceding such 
conversion shall have been at least $11.34375 per share.  Further, in certain 
limited circumstances, the holders of the Series A Stock can require that 
the Company redeem their respective shares of Series A Stock.

     Dividends in the amount of six percent (6%) per annum will be due quarterly
on the shares of Series A Stock.  The Company may pay such dividends either in
cash or through the issuance of shares of Common Stock.

     Pursuant to the Stock Purchase Agreement, the Investors also received 
warrants (the "Investor Warrants") to purchase an aggregate of One Hundred 
Fifty Thousand (150,000) shares of the Company's Common Stock at an exercise 
price of $8.54 per share.  If Incyte exercises its aforementioned right, 
Incyte will receive warrants (the "Incyte Warrants" and, together with the 
Investor Warrants, the "Series A Warrants") to purchase an aggregate of 
Sixteen Thousand Six Hundred Sixty Six (16,666) shares of Common Stock at an 
exercise price of $8.54 per share.  The Series A Warrants expire on February 27,
2001.

     Subject to the satisfaction of certain closing conditions, the Company 
and the Investors have the right to increase the aggregate amount of the 
equity financing through the sale by the Company to the Investors of Three 
Hundred (300) shares of the Company's 6% Series B Convertible Preferred Stock 
(the "Series B Stock") for Three Million Dollars ($3,000,000) (or an 
aggregate of Three Hundred Thirty (333) shares of Series B Stock for Three 
Million Three Hundred Thirty Thousand Dollars ($3,330,000) if Incyte 
exercises its aforementioned right to purchase the Series A Stock).  The 
closing conditions for the purchase of the Series B Stock include, without 

<PAGE>

limitation: (i) that the average per share market price for the Common Stock 
for the thirty (30) trading days immediately preceding the closing of the 
Series B Stock (the "Series B Closing") shall have been at least $8.00 per 
share, (ii) that the average trading volume of the Common Stock for the 
thirty (30) trading days immediately preceding the Series B Closing shall 
have been at least 25,000 shares per day, and (iii) that the Series B Closing 
shall have occurred within sixty (60) days following ninety (90) days after 
the date on which the Series A Stock Registration Statement (as defined 
below) was declared effective by the Securities and Exchange Commission.  The 
closing conditions may be waived by the Investors.  There can be no assurance 
that the Series B closing shall occur.

     The holders of Series B Stock may be convert their shares at any time 
into shares of the Company's Common Stock at a conversion price equal to the 
lower of (i) 110% of the closing bid price of the Common Stock on the trading 
day immediately prior to the Series B Closing or (ii) a percentage (ranging 
from 97% to 85% depending upon the timing of such conversion) of the average of 
five (5) closing bid prices of the Common Stock over a thirty (30) day period 
immediately preceding the time of such conversion. In addition, at any time 
on or after two (2) years from the Series B Closing, the Company may require 
that the Series B Stock be converted into Common Stock if the closing bid 
prices of the Common Stock for at least twenty (20) consecutive trading days 
immediately preceding such conversion shall have been at least One Hundred 
Fifty Percent (150%) of the closing bid price of the Common Stock on the 
trading day immediately prior to the Series B Closing.  Further, if the 
Series B Stock is issued, dividends in the amount of six percent (6%) per 
annum will be due quarterly on the Series B Stock.  Such dividends may be paid 
by the Company either in cash or through the issuance of shares of Common Stock.
In certain limited circumstances, the holders of the Series B Stock will be 
able to require that the Company redeem their shares of Series B Stock.  

     In the event of the Series B Closing, the Investors will receive 
warrants (the "Series B Warrants") to purchase an aggregate of One Hundred 
Thousand (100,000) shares (an aggregate of One Hundred Eleven Thousand One 
Hundred Twelve (111,112) shares if Incyte exercises its aforementioned 
rights) of the Company's Common Stock at an exercise price of One Hundred 
Twenty Two Percent (122%) of the closing sales price of the Common Stock on 
the trading day immediately prior to the Series B Closing.  The Series B 
Warrants expire three (3) years from the date of issuance.

     In connection with the purchase of the Series A Stock, the Company and 
the Investors entered into a Registration Rights Agreement.  Pursuant to the 
Registration Rights Agreement, the Company has agreed to use commercially 
reasonable efforts to file with the Securities and Exchange Commission a 
Registration Statement on Form S-3 covering the resale by the Investors 
(including Incyte, if applicable) of shares of Common Stock issuable (i) upon 
conversion of the Series A Stock, (ii) upon exercise of the Series A 
Warrants, and (iii) as dividends on the Series A Stock (the "Series A Stock 
Registration Statement").  The Company has agreed to use commercially reasonable
efforts to have such registration statement declared effective on or prior to
May 27, 1998. In addition, in the event of the Series B Closing, the Company 
has agreed to use its commercially reasonable efforts to file an additional 
Registration Statement on Form S-3 covering the resale by the Investors 
(including Incyte, if applicable) of shares of Common Stock issuable (i) upon 
conversion of the Series B Stock, (ii) upon exercise of the Series B Warrants, 
and (iii) as dividends on the Series B Stock.


                                         -3-

<PAGE>

                                      SIGNATURES


          Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.


                                      Oncormed, Inc.
                                       (Registrant)

                                      By:  /s/ Timothy J. Triche          
                                         ---------------------------------------
                                      Name:Timothy J. Triche, M.D., Ph.D.  
                                           -------------------------------------
                                      Title:Chairman and Chief Executive Officer
                                            ------------------------------------



Dated:  March 5, 1998


                                         -4-

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                                  INDEX TO EXHIBITS
                                  -----------------

Exhibit Number      Description

99                  Press release issued on March 4, 1998.




                                         -4-


<PAGE>

Exhibit 99:

Gaithersburg, Maryland -- March 4, 1998: Oncormed, Inc. (AMEX: ONM - news) today
announced that it has completed a $3 million equity financing through a private
placement of convertible preferred stock to certain investors.  The Company
intends to use the net proceeds of this financing for working capital and other
general corporate purposes.

The preferred stock is convertible into the Company's common stock at a
conversion price to be determined based on either the closing bid price of the
Common Stock as of February 26, 1998 or the closing bid price of the Company's
Common Stock at the time of such conversion.  The convertible preferred stock
may be redeemed at the option of the investors in certain circumstances.  In
addition, in connection with the transaction, the Company has issued to the
investors warrants to purchase shares of common stock. 

Subject to certain conditions, the Company and the investors each have the right
to increase the aggregate amount of the equity financing by an additional $3
million (for an aggregate investment of $6 million).

Oncormed intends to file a registration statement on Form S-3 with the
Securities and Exchange Commission in order to register the common stock
underlying the convertible preferred stock and the warrants sold in the
transaction, and the common stock issuable as dividends on the preferred stock. 
The Company intends to file a Form 8-K in connection with this transaction.

Oncormed (http://www.oncormed.com) is a genomics services company that
characterizes genes to establish their clinical relevancy and provides molecular
profiling of patients for pharmacogenomic and therapeutic purposes.  The
Company's mission is to accelerate the translation of cancer-related genetic
discoveries into clinically-useful products and services through strategic
collaborations with pharmaceutical, genomic and biotechnology companies.

This news release contains statements of a forward-looking nature relating to
the future financial performance of Oncormed.  Investors are cautioned that such
statements are only predictions and that actual events or results may differ
materially.  In evaluating such statements, investors should specifically
consider the various factors which could cause actual results to differ
materially from those indicated by such forward-looking statements, including
the matters set forth in the Company's Annual Report for the year ended December
31, 1996 on Form 10-K filed with the Securities and Exchange Commission and in
the Company's other reports and documents filed from time to time with the
Securities and Exchange Commission.


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