Less than six months after conducting its initial public offering, Sunesis Pharmaceuticals Inc. turned to private investors to raise another $45 million through a placement of stock and warrants.

The South San Francisco-based company entered a definitive agreement to issue 7.25 million shares at $6.21 apiece, and warrants to purchase about 2.2 million shares at the same price, plus an additional fee equal to 12.5 cents for each share underlying the warrants.

Sunesis’ stock price has fallen since its September IPO, which raised $42 million through the sale of 6 million shares at $7 each. The shares (NASDAQ:SNSS) climbed 11 percent on Friday, or 71 cents, to close out the day at $6.93. (See BioWorld Today, Sept. 28, 2005.)

"There’s a number of important institutions that came into the IPO that really are taking sort of a long-term perspective" on what Sunesis will accomplish, said Daniel Swisher, the company’s president and CEO, who added that the private placement enables the company to strengthen its shareholder base with additional investors that missed out on the public financing.

"Did the company need to do it?" he asked. "I think the best time to raise money is when your back is not against the wall."

The company now has more than $90 million in cash, cash equivalents and marketable securities to take it forward. It expects to use proceeds from the private placement to advance its three oncology product candidates through clinical development, to further its preclinical research pipeline candidates and for general corporate purposes.

With a burn rate of $7 million to $9 million per quarter, the financing and existing cash "gives us 10 to 11 quarters worth of runway," said Eric Bjerkholt, Sunesis’ senior vice president and chief financial officer.

The lead drug, SNS-595, is in two ongoing Phase II trials for non-small-cell and small-cell lung cancers, as well as a Phase I dose-escalation study for acute leukemia. Sunesis intends to start a Phase II trial in the second half of this year for ovarian cancer. The product, a cell-cycle inhibitor, was in-licensed in 2003 from Tokyo-based Dainippon Pharmaceuticals Co.

A second product, SNS-032, is in a Phase I/II trial in advanced solid tumors, which was initiated in January. Sunesis expects to start a Phase I trial in B-cell malignancies, including chronic lymphocytic leukemia, in the second half of this year. A CDK inhibitor, SNS-032 was brought in-house through an April 2005 licensing deal worth $86 million with New York-based Bristol-Myers Squibb Co. The product is designed to target CDK2, CDK7 and CDK9 and stop uncontrolled cell division. (See BioWorld Today, April 29, 2005.)

Sunesis also intends to file an investigational new drug application this year to start a Phase I trial with its Aurora kinase inhibitor, SNS-314, early in 2007. That product was discovered through Sunesis’ internal discovery engine in which small drug fragments are linked to small molecules to access certain nucleotide-binding sites.

Sunesis holds worldwide development and marketing rights to all three products.

"Our longer-term vision is to become a fully integrated oncology pharmaceutical company with a commercial presence in North America," Swisher told BioWorld Today.

The company likely will seek its first partner for SNS-595 in 2007 once it has Phase II data in hand. It might license out only overseas rights, or sign a "global partnership where we retain significant co-commercialization or development rights," Swisher said.

Participants in the private placement include Alta Partners, of San Francisco; Deerfield Management, of San Francisco; Baker Brothers Investments, of New York; existing investor Warburg Pincus LLC, of New York; and several other institutions.

New York-based Cowen & Co. LLC acted as the exclusive placement agent.

Following the placement, Sunesis has 29.2 million shares outstanding. Founded in 1998, it has raised $201 million since inception.

Unigene Placement Secures $13M

Fairfield, N.J.-based Unigene Laboratories Inc. also raised money - $13 million - through a private placement. The company agreed with an institutional investor to issue 4 million shares of common stock at $3.25 per share, as well as warrants to buy 1 million shares at $4.25 per share. The warrants are exercisable for five years from closing.

The funds will enable Unigene to expand its existing programs, while it works to reduce corporate debt. It also "should further help to improve the prospects for listing our common stock on a national exchange," said the company’s president and CEO Warren Levy in a statement.

Unigene is focused on the oral and nasal delivery of large-market peptide drugs. It is developing calcitonin and PTH-based therapies. In the U.S., it has one marketed product, Fortical, for postmenopausal osteoporosis, which was launched in August. (See BioWorld Today, Aug. 16, 2005.)

Unigene’s stock (OTC BB:UGNE) rose 6 cents Friday to close at $3.80.