On March 8, 2018 Sunesis Pharmaceuticals, Inc. (Nasdaq: SNSS) reported financial results for the fourth quarter and year ended December 31, 2017. Loss from operations for the three months and year ended December 31, 2017 was $6.4 million and $34.4 million, respectively (Press release, Sunesis, MAR 8, 2018, View Source [SID1234524571]). As of December 31, 2017, cash, cash equivalents and marketable securities totaled $31.8 million. This capital is expected to fund the company into early 2019.
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"We are excited about the potential opportunity for our lead program, the non-covalent BTK inhibitor vecabrutinib (SNS-062), to help patients who have developed resistance to covalent BTK inhibitors such as ibrutinib, the current standard of care in treating CLL," said Dayton Misfeldt, Interim Chief Executive Officer of Sunesis. "This year we expect to see our initial safety and efficacy profile for vecabrutinib in its Phase 1b/2 study in patients as we determine the dose to take into our Phase 2 expansion and other studies. Beyond vecabrutinib, we also look forward to advancements in our proprietary PDK1 program and Takeda-partnered pan-RAF inhibitor program."
Recent Highlights
Updates on Phase 1b/2 Study Evaluating Oral Non-Covalent BTK-inhibitor Vecabrutinib (SNS-062) in Adults with Chronic Lymphocytic Leukemia (CLL) and other B-Cell Malignancies. At an investor and analyst event held at the American Society of Hematology (ASH) (Free ASH Whitepaper) Conference in December 2017, Sunesis provided a program update on the ongoing Phase 1b/2 study evaluating the safety, pharmacokinetics, pharmacodynamics, and antitumor activity of its potent non-covalent BTK-inhibitor vecabrutinib in adults with CLL and other B cell malignancies. The Phase 1b/2 trial is an open-label, sequential-group study that is enrolling up to 124 patients who have progressed while on a covalent BTK inhibitor with the goal of determining the maximum tolerated and/or recommended phase 2 dose. We are updating guidance for this program, and now expect to reach a recommended phase 2 dose in the fall of 2018.
Announced Nomination of PDK-1 Inhibitor SNS-510 as Development Candidate. In November 2017, Sunesis announced that its PDK-1 inhibitor, SNS-510, was nominated as a Development Candidate and potentially first-to-clinic selective inhibitor in this pathway. PDK1 is a master kinase that activates other kinases important to cell growth and survival including members of the AKT, PKC, RSK and SGK families.
Changes in Executive Leadership and Board of Directors.
In November 2017, Willie Quinn was appointed Chief Financial Officer and Senior Vice President, Finance and Corporate Development. Prior to joining Sunesis, Willie was CEO and Co-Founder of the private cancer immunotherapy company Bullet Biotechnology. Prior to Bullet Bio, he led Corporate Development and Strategy at Jazz Pharmaceuticals.
In March 2017, Judy Fox, Ph.D. rejoined Sunesis as Chief Scientific Officer. Judy previously served as a Vice President at Sunesis, and has over 25 years of experience with leadership roles at companies including Genentech and Chiron. Her career has focused on
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the translation of basic mechanistic understandings of promising drugs into coherent, evidence-based clinical development. Judy took over as program leader for vecabrutinib in July 2017.
In January 2018, Daniel Swisher stepped down from his role as CEO to pursue another executive opportunity, and the Board of Directors appointed Dayton Misfeldt, a member of the Board since 2009, as Interim CEO, as well as formed a search committee to find a permanent CEO. The search for a permanent CEO is ongoing.
Lastly, in February 2018, H. Ward Wolff was appointed to the Board of Directors. Ward brings over 40 years of finance and executive leadership experience to the Board, with 20 years of experience in the life sciences sector, most recently having served as Executive Vice President and Chief Financial Officer of Sangamo Therapeutics, Inc. Mr. Wolff is also designated chairman of the company’s Audit Committee.
Financial Highlights
Cash, cash equivalents and marketable securities totaled $31.8 million as of December 31, 2017, as compared to $42.6 million as of December 31, 2016. The decrease of $10.8 million was primarily due to $36.1 million of net cash used in operating activities and a debt restructuring payment of $7.6 million, partially offset by $14.4 million in net proceeds primarily from sales of common shares through the company’s at-the-market equity facility. An additional $18.5 million in net proceeds were raised through a public offering in October 2017. This capital is expected to fund the company into 2019.
Revenues for the year ended December 31, 2017 were $0.7 million, as compared to $2.5 million for 2016. The decrease between the periods was primarily due to deferred revenue recognized related to the Royalty Agreement with Royalty Pharma.
Research and development expenses were $3.7 million and $21.5 million for the three months and year ended December 31, 2017, as compared to $4.8 million and $22.9 million for the same periods in 2016, primarily relating to the SNS-062 and the vosaroxin development program in each period. The decrease of $1.4 million in 2017 was primarily due to a decrease in professional services and $0.5 million in salary and personnel costs partially offset by the $2.5 million milestone payment to Biogen under the license agreement.
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General and administrative expenses for the three months and year ended December 31, 2017 were $2.7 million and $13.5 million, as compared to $3.9 million and $16.1 million for the same periods in 2016. The decrease of $2.6 million in 2017 was primarily due to decreases of $1.6 million in salary and personnel costs, $0.8 million in commercial expenses, and $0.3 million in office and related expenses.
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Interest expense was $0.3 million and $1.4 million for the three months and year ended December 31, 2017, as compared to $0.5 million and $1.7 million for the same periods in 2016. The decrease in the 2017 periods was primarily due to the decrease in the outstanding notes payable.
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Cash used in operating activities was $36.1 million for the year ended December 31, 2017, as compared to $37.0 million for the same period in 2016. Net cash used in operating activities in 2017 resulted primarily from the net loss of $35.5 million and changes in operating assets and liabilities of $4.0 million, offset by net adjustments for non-cash items of $3.3 million. Net cash used in operating activities in 2016 resulted primarily from the net loss of $38.0 million, offset by changes in operating assets and liabilities of $4.1 million.
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Sunesis reported loss from operations of $6.4 million and $34.4 million for the three months and year ended December 31, 2017, as compared to $8.1 million and $36.5 million for the same periods in 2016. Net loss was $6.6 million and $35.5 million for the three months and year ended December 31, 2017, as compared to $8.5 million and $38.0 million for the same periods in 2016.
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Conference Call Information
Sunesis will host a conference today at 4:30 p.m. Eastern Time. The call can be accessed by dialing (844) 296-7720 (U.S. and Canada) or (574) 990-1148 (international) and entering passcode 8182338. To access the live audio webcast, or the subsequent archived recording, visit the "Investors and Media – Calendar of Events" section of the Sunesis website at www.sunesis.com. The webcast will be recorded and available for replay on the company’s website for two weeks.