Sunesis Pharmaceuticals Inc. (SNSS) filed Quarterly Report for the period ended 2009-03-31.
Sunesis Pharmaceuticals is a clinical-stage biopharmaceutical company focused on the discovery development and commercialization of novel small molecule therapeutics for oncology and other serious diseases. It has built a broad product candidate portfolio through internal discovery and in-licensing of novel cancer therapeutics. It is advancing its product candidates through in-house research and development efforts and strategic collaborations with leading pharmaceutical and biopharmaceutical companies. Sunesis Pharmaceuticals Inc. has a market cap of $12.7 million; its shares were traded at around $0.3695 with and P/S ratio of 2.5.
Highlight of Business Operations:On March 31, 2009, we entered into a securities purchase agreement with accredited investors, including certain members of management, providing for a private placement of up to $43.5 million of our securities, or the Private Placement. The Private Placement contemplates the sale of up to $15.0 million of units consisting of Series A preferred stock and warrants to purchase common stock, and up to $28.5 million of common stock in three closings. $10.0 million of units were sold in the initial closing, which occurred on April 3, 2009, resulting in net proceeds of approximately $8.8 million. An additional $5.0 million of units may be sold in the second closing, which may occur at our election or at the election of the holders of a majority of the Series A preferred stock issued in the Private Placement, subject to conditions described in ‘Sources of Liquidity below. The remaining tranche of up to $28.5 million of common stock may be sold in a common equity closing, again subject to conditions described below.
Research and development expense was $4.3 million for the three months ended March 31, 2009 as compared to $8.7 million for the same period in 2008. The decrease of $4.4 million was primarily due to reduced research staffing as a result of our 2008 Restructuring, which resulted in a $2.2 million decrease in headcount-related expenses, and decreases in allocated facility costs of $1.0 million, lab costs of $0.4 million and clinical expenses of $0.4 million. We expect that we will continue to incur significant expenses related to the development of voreloxin in 2009 and future years; however, overall research and development expenses are expected to be lower in 2009 as compared to 2008 as a result of the reduction in research efforts and related staffing.
For the three months ended March 31, 2009, we recorded net restructuring charges of $1.3 million for lease termination activities related to the 2008 Restructuring and a restructuring charge of $0.6 million for employee severance and related benefit costs related to the 2009 Restructuring. The net charge for lease termination activities includes $2.2 million for early lease termination fees paid to the landlord and $0.5 million for third party commission and other facility closure expenses, partially offset by the reversal of $1.4 million in non-cash deferred rent on this facility.
On March 31, 2009, we entered into a securities purchase agreement with accredited investors, including certain members of management, providing for a Private Placement of up to $43.5 million of our securities. The Private Placement contemplates the sale of up to $15.0 million of units consisting of Series A preferred stock and warrants to purchase common stock, and up to $28.5 million of common stock in three closings. $10.0 million of units were sold in the initial closing, which occurred on April 3, 2009, resulting in net proceeds of $8.8 million. Subject to the approval of our stockholders, an additional $5.0 million of units may be sold in the second closing, which may occur at our election or at the election of the holders of a majority of the Series A preferred stock issued in the Private Placement. We may elect to hold the second closing if the achievement of a specified milestone with respect to voreloxin has occurred and our common stock is trading above a specified floor price. If we have not delivered notice to the investors in the Private Placement of our election to complete the second closing, or if the conditions for the second closing have not been met, the investors may elect to purchase the units in the second closing by delivering notice to us of their election. Notice of an election to complete the second closing, either by us or the investors in the Private Placement, must be delivered on or before the earliest to occur of December 31, 2009, the common equity closing described below or the occurrence of a qualifying alternative common stock financing. If the second closing occurs, it will be subject to the satisfaction of customary closing conditions. Subject to the approval of our stockholders, the remaining tranche of up to $28.5 million of common stock may be sold in the common equity closing. The common equity closing may be completed at our election prior to the earlier of December 31, 2010 and a qualifying alternative common stock financing, or upon the election of the holders of a majority of the Series A preferred stock issued in the Private Placement prior to a date determined with reference to our cash balance dropping below $4.0 million at certain future dates. If we elect to hold the common equity closing, it will be subject to the approval of the purchasers holding a majority of the Series A preferred stock issued in the Private Placement and subject to a condition that we sell at least $28.5 million of common stock in the common equity closing.
Net cash used in operating activities was $6.6 million for the three months ended March 31, 2009, as compared to $10.5 million for the same period in 2008. Net cash used in operating activities for the three months ended March 31, 2009 resulted primarily from our net loss of $8.4 million and net adjustments for non-cash items of $0.8 million, partially offset by changes in operating assets and liabilities of $2.5 million, including $1.8 million related to deferred revenue. Net cash used in operating activities for the three months ended March 31, 2008 resulted primarily from our net loss of $9.6 million and changes in operating assets and liabilities of $2.0 million, partially offset by adjustments for non-cash items of $1.1 million, primarily related to stock-based compensation and depreciation and amortization.
Net cash provided by investing activities was $4.6 million for the three months ended March 31, 2009, as compared to $5.2 million for the same period in 2008. Net cash provided by investing activities during the three months ended March 31, 2009 was attributable to the net proceeds from maturities of marketable securities of $4.3 million and proceeds from the sale of held-for-sale assets totaling $0.3 million. Net cash provided by investing activities during the three months ended March 31, 2008 was primarily attributable to net proceeds from the maturity of marketable securities of $5.4 million, partially offset by capital expenditures of $0.2 million.
Sunesis Pharmaceuticals is a clinical-stage biopharmaceutical company focused on the discovery development and commercialization of novel small molecule therapeutics for oncology and other serious diseases. It has built a broad product candidate portfolio through internal discovery and in-licensing of novel cancer therapeutics. It is advancing its product candidates through in-house research and development efforts and strategic collaborations with leading pharmaceutical and biopharmaceutical companies. Sunesis Pharmaceuticals Inc. has a market cap of $12.7 million; its shares were traded at around $0.3695 with and P/S ratio of 2.5.
Highlight of Business Operations:On March 31, 2009, we entered into a securities purchase agreement with accredited investors, including certain members of management, providing for a private placement of up to $43.5 million of our securities, or the Private Placement. The Private Placement contemplates the sale of up to $15.0 million of units consisting of Series A preferred stock and warrants to purchase common stock, and up to $28.5 million of common stock in three closings. $10.0 million of units were sold in the initial closing, which occurred on April 3, 2009, resulting in net proceeds of approximately $8.8 million. An additional $5.0 million of units may be sold in the second closing, which may occur at our election or at the election of the holders of a majority of the Series A preferred stock issued in the Private Placement, subject to conditions described in ‘Sources of Liquidity below. The remaining tranche of up to $28.5 million of common stock may be sold in a common equity closing, again subject to conditions described below.
Research and development expense was $4.3 million for the three months ended March 31, 2009 as compared to $8.7 million for the same period in 2008. The decrease of $4.4 million was primarily due to reduced research staffing as a result of our 2008 Restructuring, which resulted in a $2.2 million decrease in headcount-related expenses, and decreases in allocated facility costs of $1.0 million, lab costs of $0.4 million and clinical expenses of $0.4 million. We expect that we will continue to incur significant expenses related to the development of voreloxin in 2009 and future years; however, overall research and development expenses are expected to be lower in 2009 as compared to 2008 as a result of the reduction in research efforts and related staffing.
For the three months ended March 31, 2009, we recorded net restructuring charges of $1.3 million for lease termination activities related to the 2008 Restructuring and a restructuring charge of $0.6 million for employee severance and related benefit costs related to the 2009 Restructuring. The net charge for lease termination activities includes $2.2 million for early lease termination fees paid to the landlord and $0.5 million for third party commission and other facility closure expenses, partially offset by the reversal of $1.4 million in non-cash deferred rent on this facility.
On March 31, 2009, we entered into a securities purchase agreement with accredited investors, including certain members of management, providing for a Private Placement of up to $43.5 million of our securities. The Private Placement contemplates the sale of up to $15.0 million of units consisting of Series A preferred stock and warrants to purchase common stock, and up to $28.5 million of common stock in three closings. $10.0 million of units were sold in the initial closing, which occurred on April 3, 2009, resulting in net proceeds of $8.8 million. Subject to the approval of our stockholders, an additional $5.0 million of units may be sold in the second closing, which may occur at our election or at the election of the holders of a majority of the Series A preferred stock issued in the Private Placement. We may elect to hold the second closing if the achievement of a specified milestone with respect to voreloxin has occurred and our common stock is trading above a specified floor price. If we have not delivered notice to the investors in the Private Placement of our election to complete the second closing, or if the conditions for the second closing have not been met, the investors may elect to purchase the units in the second closing by delivering notice to us of their election. Notice of an election to complete the second closing, either by us or the investors in the Private Placement, must be delivered on or before the earliest to occur of December 31, 2009, the common equity closing described below or the occurrence of a qualifying alternative common stock financing. If the second closing occurs, it will be subject to the satisfaction of customary closing conditions. Subject to the approval of our stockholders, the remaining tranche of up to $28.5 million of common stock may be sold in the common equity closing. The common equity closing may be completed at our election prior to the earlier of December 31, 2010 and a qualifying alternative common stock financing, or upon the election of the holders of a majority of the Series A preferred stock issued in the Private Placement prior to a date determined with reference to our cash balance dropping below $4.0 million at certain future dates. If we elect to hold the common equity closing, it will be subject to the approval of the purchasers holding a majority of the Series A preferred stock issued in the Private Placement and subject to a condition that we sell at least $28.5 million of common stock in the common equity closing.
Net cash used in operating activities was $6.6 million for the three months ended March 31, 2009, as compared to $10.5 million for the same period in 2008. Net cash used in operating activities for the three months ended March 31, 2009 resulted primarily from our net loss of $8.4 million and net adjustments for non-cash items of $0.8 million, partially offset by changes in operating assets and liabilities of $2.5 million, including $1.8 million related to deferred revenue. Net cash used in operating activities for the three months ended March 31, 2008 resulted primarily from our net loss of $9.6 million and changes in operating assets and liabilities of $2.0 million, partially offset by adjustments for non-cash items of $1.1 million, primarily related to stock-based compensation and depreciation and amortization.
Net cash provided by investing activities was $4.6 million for the three months ended March 31, 2009, as compared to $5.2 million for the same period in 2008. Net cash provided by investing activities during the three months ended March 31, 2009 was attributable to the net proceeds from maturities of marketable securities of $4.3 million and proceeds from the sale of held-for-sale assets totaling $0.3 million. Net cash provided by investing activities during the three months ended March 31, 2008 was primarily attributable to net proceeds from the maturity of marketable securities of $5.4 million, partially offset by capital expenditures of $0.2 million.
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