By MARK PERKISS
WEST WINDSOR - Orchid Biocomputer Inc., a spinoff company spawned by Sarnoff Corp., has raised $27.5 million through a private stock sale and is finalizing plans to move into larger quarters, company officials said yesterday.
"We're very pleased with the results of our stock offerings," said Orchid President and CEO Dale Pfost. "The money will be a big help to us as we move to grow and expand."
Orchid is among about 10 companies Sarnoff has spun off since 1992 as part of a business strategy that gives the former RCA Labs a way to market technology developed as part of its main work on television.
Orchid, which was spun off from Sarnoff three years ago, develops small chemical processing chips that are capable of performing large numbers of scientific experiments in short periods of time.
The company wants to use the technology to help speed up the time it takes to discover new drugs and is working with pharmaceutical maker SmithKline Beecham.
"We've reached one milestone in drug discovery with them and we're working to develop agreements with other pharmaceutical companies," Pfost said.
Trough the stock sale, we've also reached an agreement with Motorola Inc. to collaborate so we can combine what we do with their expertise in chip-making," he said.
While much of Orchid's work since it was founded in 1995 has been on development of its technology, the company is looking to move completely into the area of drug discovery.
"Right now it can take as long as 14 years to get a new drug from the very beginning to the market where people can have access to it," he said. "What we're trying to do is to shorten the discovery time.
"We're looking to be a full drug discovery company and we're taking steps to get there," he said. "Much of the money we raised through the stock sale will be used to hire scientists and administrative people."
ORCHID has 22 employees, up from six about six about six months ago, Pfost said. Plans call for the company to double its work force this year and again in 1999.
To accommodate the expansion, the company is moving from West Windsor to larger quarters in Plainsboro.
So far, the company's work has focused on cancer drugs, but Pfost said the technology could be used for work on drugs to treat a wide array of illnesses.
"It's common for small companies like us to work on cancer drugs because there's no cure for cancer yet and if you come up with one, you don't need an army of salespeople to market the drug," he said.
With the stock sale, Sarnoff, which founded the company, is now a minority shareholder.
Pfost declined to release financial figures for the company but said Orchid has had revenues "in the millions of dollars," mostly through its collaboration with SmithKline Beecham.
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