By Karen Pihl-Carey
Only two years after its inception, privately held Sunesis Pharmaceuticals Inc. raised $60 million in a private placement of preferred stock.
"This is our third round of financing, very much larger than the prior rounds that we've done," said James Young, CEO of Sunesis, based in Redwood City, Calif. "It leaves us in quite a strong cash position with nearly $80 million in resources and adds some important new investors to the company."
The company, which is focused on the discovery of small-molecule drugs, completed the financing with several new and existing investors. CSFB Private Equity, of New York, led the financing, which included new investors International Biotechnology Trust, of London, and Lombard Odier & Cie, of Geneva, Switzerland. Existing investors included E.M. Warburg, Pincus & Co. LLC, of New York; Mayfield Fund, of Menlo Park, Calif.; Venrock Associates, of New York; and Abingworth Management Ltd., of London. A group of individual investors also participated.
Broadview Ltd. served as adviser and placement agent for a portion of the financing.
"We had hoped to raise $40 [million] and we found a very receptive environment. People who have begun to get to know the company have felt that the area we have chosen to focus on is a potentially big value area," Young told BioWorld Today. "We actually had to scale back the financing and impose a limit of $60 million on the round. We very clearly could have made it more."
Sunesis now can take the proceeds from the offering to advance compounds in early-stage preclinical studies, as well as to enhance its discovery platform, applying it to several targets. The company also recently initiated construction of a first-class laboratory in South San Francisco, which is expected to be completed in the middle of 2001. For the time being, the company's 60 employees remain in constrained quarters at the Redwood City facility, Young said.
Since its inception in June 1998, Sunesis has raised $94 million in private financings. While the company has a goal to eventually go public, it has no near-term plans to do so. The most recent financing allows it to stay private for several years.
"At our current anticipated spending rate, it's [the $60 million] enough to provide us with three or more years of operations, depending of course on our rate of expansion and the rate that we move things into development," Young said.
Young also said Sunesis is very interested in partnering with a number of major pharmaceutical companies to advance its potential products.
The company has developed systematic approaches to identify and mimic the key intermolecular surface for specific protein targets. It said its technology greatly accelerates the pace of initial identification and subsequent optimization of small molecules that bind to protein-protein targets.
"We're focused on finding small-molecule drugs that work in well-validated pathways, either for protein-protein interaction-type targets or enzyme targets that have proven very difficult to provide leads using conventional technology," Young said.
In December, in its last financing round, Sunesis raised $25.2 million. (See BioWorld Today, Dec. 6, 1999, p. 1.)