Staff Writer

Sunesis Pharmaceuticals Inc. said it plans to realign the company, including laying off most of its workers, to focus its resources on development of its lead oncology product candidate voreloxin (formerly SNS-595).

The company plans a work force reduction of about 60 percent, and will wind down its research activities, and expects to save $15 million from those cuts.

Sunesis, which ended the first quarter with $36.8 million in cash, has enough funds to last through about the middle of 2009, and to complete its five ongoing trials, three of which involve voreloxin, Eric Bjerkholt, senior vice president of corporate development and finance, told BioWorld Today.

South San Francisco-based Sunesis has not yet decided if it will seek a partner for voreloxin but said it plans to seek a partner to support advanced clinical trials of SNS-314. Future development of SNS-032 will depend on achieving positive results from an ongoing Phase I trial.

Sunesis currently is conducting Phase II clinical trials of voreloxin as a single agent for the treatment of platinum-resistant ovarian cancer and previously untreated acute myeloid leukemia (AML), as well as a Phase Ib clinical trial of voreloxin in combination with cytarabine in relapsed/refractory AML.

As a result of the restructuring, the company will incur a one-time charge of about $10.7 million in the second quarter. About $2.5 million of the restructuring charge represents cash payments over the next 12 months for severance and other personnel-related expenses.

About $8 million of that charge is related to the closing of the company's research facility.

Current burn rate guidance for the second half of this year is in the range of $12 million to $15 million, including payment of severance and other restructuring charges.

In addition, Sunesis has expanded its late-stage development leadership team.

Steven B. Ketchum has been appointed senior vice president of research and development, and Mary G. Bolton was named vice president of clinical development.

They both have extensive product development and regulatory expertise and track records of successful FDA submissions in a wide range of therapeutic areas, the company said.

Sunesis currently is conducting Phase II trials of voreloxin as a single agent for the treatment of platinum-resistant ovarian cancer and previously untreated AML, as well as a Phase Ib trial of voreloxin in combination with cytarabine in relapsed/refractory AML.

According to the company, voreloxin thus far has demonstrated objective responses in both solid and hematologic tumors and has been consistently well tolerated in multiple clinical trials.

Phase II data in ovarian cancer recently reported at the annual meeting of the American Society of Clinical Oncologists demonstrated that 48 percent of platinum-resistant ovarian cancer patients treated at a dose of 48 mg/m2 once every 21 days achieved disease control, defined as stable disease for 90 days or more or a complete or partial response.

Sunesis' lead compound, voreloxin is structurally related to the antibiotic quinolones, a class of compounds that has not been used previously for the treatment of cancer. But voreloxin does not have any antibacterial activity.

Later this month, at the European Hematology Association Congress, Sunesis is expected to report updated data on voreloxin's activity alone, and interim data on voreloxin's activity in combination with cytarabine for the treatment of AML.

Sunesis continues ongoing trials in its earlier-stage clinical programs, including the Phase I dose-escalation study of its cyclin-dependent kinase inhibitor, SNS-032, and its pan-Aurora kinase inhibitor, SNS-314, and expects to report data from those clinical trials this year.

In closing of its internal discovery research efforts, Sunesis said it also will explore financial opportunities relating to its fragment-based drug discovery capabilities, its preclinical programs and/or its intellectual property portfolio through a potential spinout or alliance.

Sunesis also said it will continue to benefit from any downstream milestones or royalties based on future progress made in compounds emerging from its existing drug discovery collaborations with Biogen Idec Inc., Johnson & Johnson Pharmaceutical Research and Development LLC, Merck & Co. Inc. and SARcode Corp. Sunesis anticipates that one or more of those compounds may advance to clinical trials within the next 12 months.

Shares in Sunesis (NASDAQ:SNSS) fell 15 cents or 7.5 percent, closing at $1.85.