Gene Logic Inc., a fast-growing Gaithersburg firm involved in cutting-edge genetic research, said yesterday it plans to buy Oncormed Inc., another biotech firm headquartered in the Maryland suburb, in a transaction valued at up to $38.2 million.

The transaction would marry Gene Logic's expertise in analyzing the genetic mechanisms underlying with Oncormed's ability to help drug companies find and test new treatments. Gene Logic executives said they would thus be able to offer a broader array of services to pharmaceutical firms.

Michael J. Brennan, chief executive of Gene Logic, said in a statement that the deal would allow his company to "achieve, in a highly cost-effective way, the critical mass and range of technologies necessary to support key aspects of the drug discovery and development process."

Gene Logic has grown to 115 employees in two years of operations, making it one of the fastest-growing biotechnology firms among the scores lining the Interstate 270 corridor in Montgomery County. The Oncormed deal would add 50 or so employees.

Both Gene Logic and Oncormed are losing money, as are most biotechnology companies as they race to develop products using finite amounts of capital. Companies that lag but seem to have promising technology sometimes are taken over by larger, stronger companies in the field.

There is no question Oncormed is weaker than Gene Logic. In recent filings with the Securities and Exchange Commission, Oncormed disclosed that it has only a couple of months' worth of cash on hand and said there was "substantial doubt about whether the company can continue as a going concern."

Oncormed's stock briefly topped $8 a share in September but has been falling for months as investors have grown more concerned about the company's finances.

Gene Logic, by contrast, has been announcing new, revenue-producing deals at a breakneck pace. One deal announced last week, to conduct research for Hoechst Schering AgrEvo GmbH, a German firm involved in crop research, could bring in as much as $45 million to Gene Logic over eight years.

Gene Logic and Oncormed are located a few blocks apart in an area dotted with biotech start-ups. Despite Oncormed's financial woes, Gene Logic executives said they saw significant value in the company: a corps of highly trained scientists and technicians, collaborations with major pharmaceutical firms, a bank of frozen human tissue in Los Angeles, important patents in cancer research, and other assets.

The buyout would require approval from shareholders of both companies. Under its terms, each Oncormed share would be exchanged for about 0.48 shares of Gene Logic stock.

The exchange ratio, however, would change if Gene Logic's share price rose above $7.88 on average in the 15 days before the company's shareholder meeting. In that scenario, the maximum that Oncormed shareholders could receive would be Gene Logic stock worth $3.79 per share, which would cap the value of the deal at about $38.2 million.

Gene Logic shares fell yesterday on the announcement, closing at $7.93 3/4, down 25 cents, in trading on the Nasdaq Stock Market. Oncormed shares were unchanged on the American Stock Exchange, closing at $3.31 1/4.