Gentris, a company focused on genetics and individualized medicine, is selling one of its two business units to a San Diego entrepreneur.

The Gentris medical diagnostics product unit, formerly called Gentris Diagnostics, is being launched as a new company under the name ParagonDx. Gentris divided its operations, which employ some 40 people, into two units earlier this year.

Michael Murphy, who launched Gentris in 2001, will run ParagonDx as its chief executive officer. He also will remain on the board of Gentris, which retains ownership of the other business unit. Focused on drug research, it is called Gentris Clinical Genetics.

Joe Sorge, a San Diego entrepreneur who recently sold his company Stratagene for more than $240 million, is acquiring the majority interest in the Gentris business unit to form ParagonDx. He will own two thirds of the venture. Gentris employees, including Murphy, will own 1/6th of ParagonDx and Gentris investors will own the remaining 1/6th.

Financial terms of the deal were not disclosed. Gentris has raised some $6.5 million in venture capital over the years, including $5 million two years ago.

Forming a new company with funding from a new investor meets the two primary goals Murphy had set for the medical diagnostics product group.

“We were trying to raise new money for this subsidiary, so we met the goal of bringing in new capital,” Murphy said. “The second is we found the best kind of investor – someone who is passionate about this space.

“Now I have a deep-pocketed investor who shares the same vision,” Murphy added. “Basically, this allows us to develop a much broader pipeline of products.”

Gentris already offers 52 products for use in genomics testing.