Sunesis Pharmaceuticals Inc. filed for an initial public offering to help fund upcoming clinical trials.
The South San Francisco-based company did not specify the number or price of shares, but in its prospectus, filed Dec. 23, estimated raising $86.25 million. Sunesis said about $40 million of the proceeds are expected to fund clinical and preclinical development of product candidates, including the company's cancer drug, SNS-595, which is set to begin Phase II trials in 2005.
About $2.3 million will repay outstanding indebtedness owed for general purposes and working capital. The company also said additional money might be used to in-license product candidates or invest in complementary businesses and technologies.
Over the nine-month period ending Sept. 30, Sunesis reported revenues of $6.4 million, with a net loss of $16.5 million. The company has reported an accumulated deficit totaling $89 million. Company officials could not be reached for comment.
At the end of the third quarter, the company had about $42 million in cash, cash equivalents and marketable securities and had nearly 40 million outstanding shares.
In June, Sunesis began the first of two Phase I trials for SNS-595, a cell-cycle inhibitor the company obtained rights to from Dainippon Pharmaceuticals Co., of Tokyo, in 2003.
The product is expected to compete with other cytotoxic drugs - such as irinotecan, doxorubicin and taxanes - as well as other cell-cycle inhibitors that also target proliferating cells, but at different points of the cell cycle and with different mechanisms of action. Sunesis said there might be as many as 40 other cell-cycle inhibitors in clinical trials.
Sunesis said SNS-595 is designed to work by inhibiting cell division and inducing cell death.
The company said it plans to conduct up to three single-agent Phase II trials in the second half of 2005 to evaluate SNS-595 as a stand-alone therapy in patients with small-cell and non-small-cell lung cancers and acute myeloctic leukemia. Phase II trials to evaluate the drug both as stand-alone treatment and in combination with standard lines of therapy in additional tumor types are expected for 2006.
Sunesis uses its fragment-based drug discovery approach, called "tethering," with other drug discovery tools, such as structure-based design and medicinal chemistry, to design therapeutics for cancer and inflammatory diseases. Tethering enables researchers to create kinase inhibitors by identifying small fragments that access the adaptive regions of a target kinase and then linking the molecules with active fragments that access the nucleotide-binding site.
To date, Sunesis said it has used the tethering approach on more than 15 protein targets, and is developing kinase inhibitors, including the Aurora kinases and the Raf kinases.
Kinases are cell-signaling enzymes that play a role in cancer growth and proliferation.
Its drug discovery process has led to five collaborations, such as the partnership with Cambridge, Mass.-based Biogen Idec Inc. on two initiatives, including the Raf kinase inhibitor program. That deal brought Sunesis $21 million up front - a $7 million payment and a $14 million equity investment. Raf is an enzyme in the Ras pathway, thought to be important to cell proliferation. Sunesis said the goal is to develop a Raf kinase inhibitor with improved pharmaceutical properties, compared to other inhibitors being developed. (See BioWorld Today, Sept. 8, 2004.)
Both companies will develop and promote the Raf kinase inhibitor. Biogen Idec is expected to file an investigational new drug application and begin Phase I trials in 2007.
Sunesis and Biogen Idec also apply the tethering approach to discover small-molecule leads that might inhibit up to five additional oncology kinase targets. In that case, Biogen will hold all commercialization rights to products developed.
In a collaboration with Johnson & Johnson Pharmaceutical Research and Development, a subsidiary of the New Brunswick, N.J.-based Johnson & Johnson, Sunesis' tethering process is being used to discover small-molecule inhibitors of cathepsin S, an enzyme involved in the activation of T cells that cause inflammatory diseases such as asthma, rheumatoid arthritis and Crohn's disease.
J&J holds the rights to commercialize any products.
Sunesis also agreed to work with Merck & Co. Inc., of Whitehouse Station, N.J., for development of RACE inhibitors designed to treat Alzheimer's disease and on an antiviral inhibitor program using small-molecule compounds derived from tethering. (See BioWorld Today, July 28, 2004.)
Sunesis was formed in February 1998 as Mosaic Pharmaceuticals. As of Dec. 1, the company had 114 full-time employees, with the majority of them working in research and development operations. n