There comes a time when a decision spun as wise discretion becomes a question of ability and while Sunesis Pharmaceuticals, Inc. (NASDAQ: SNSS) doesn’t necessarily find themselves in that boat just yet there has been growing frustration among shareholders as the biotech company has yet to begin its Phase III clinical trial of vosaroxin with cytarabine in patients with relapsed and/or refractory acute myeloid leukemia.
For nearly three months the company has said they expect that critical trial to begin in the fourth quarter and with the clock ticking there are plenty of skeptics questioning the validity of such a declaration. The reasoning behind the delays shouldn’t be about money as the company’s third quarter financial results indicated “As of September 30, 2010, cash, cash equivalents and marketable securities totaled $40.8 million, with no debt outstanding.”
A nice chunk of that money came in October when Sunesis announced they had received approximately $14.3 million in net proceeds following an offering of around 44.1 million units at $0.35 per unit; each unit consisting of one share of common stock and a warrant to purchase ½ of a share of common stock. After the October 6 closing of the underwritten offer SNSS stated the proceeds would go toward the Phase III trial yet there has been no announcement since indicating exactly when they will begin enrolling patients.
Sunesis has had a lot on their plate over the past few months, not the least of which has been their status on NASDAQ. In late September the company announced that they received a six-month extension for regaining compliance pertaining to the $1 per share minimum price rule, giving them until March to post ten consecutive days above that level to avoid delisting. Shares have yet to come close to that level and while many expect news relating to the Phase III trial to spike share price it may take a reverse stock split to actually get the figure they need.
As pointed out in an earlier article on OTCEquity.com, Sunesis does appear to have solid results concerning vosaroxin with cytarabine and if the Phase III trial known as VALOR proves effective then SNSS shares could take off. This of course is due in large part to the fact there are currently no other Phase III trials enrolling both first relapsed or primary refractory AML patients, providing the company with the possibility of offering an alternative to traditional means of treatment.
On November 10 the company released updated information concerning their Phase II trial concentrating on both first relapsed or primary refractory AML patients and the news looked positive as they stated “For the fully enrolled relapsed/refractory AML study, a total of 69 patients with first relapse or primary refractory AML have been treated at doses of 80 to 90 mg/m(2) of vosaroxin, in combination with bolus or continuous infusion cytarabine. Consistent with results presented at the American Society of Clinical Oncology (ASCO) Annual Meeting, vosaroxin achieved clinically meaningful complete remission rates balanced with low all-cause early mortality. Preliminary leukemia free survival, measured as time from complete remission to relapse or death, is now 14.4 months (440 days). Median overall survival was 7.1 months, with 14 patients continuing in survival follow up well beyond this median.”
Robert Stuart, M.D., Professor of Medicine, Division of Hematology/Oncology, Department of Medicine, Medical University of South Carolina, presented this information at the Chemotherapy Foundation Symposium XXVIII in New York City and stated “Particularly noteworthy is the long leukemia free survival seen among patients who had a complete remission. These mature data provide encouraging evidence of clinically meaningful benefit for this novel combination in patients with limited treatment options. I hope this benefit will be confirmed in the upcoming VALOR trial which is rigorously designed to demonstrate a clinically meaningful survival advantage over a current standard of care
This would lead investors to believe that the Phase III trial would be ready to launch but again there has been little information regarding such a move. What was to start in October, according to a date on ClinicalTrials.gov, has now stretched into December and that will obviously effect the end date which was originally placed in March 2013. Having already missed the reported start date Sunesis may just be taking their time to ensure everything is in order, knowing that any slip could cost them more time and money as well as added shareholder frustration.
Frustrating enough for shareholders is the third quarter figures for SNSS which showed no revenue for period and revenue after nine months of $27,000. Net loss for the quarter was $5.1 million while the nine months ended September 30, 2010 stood at $14.5 million. CEO Daniel Swisher has said the company has the resources available to fund the VALOR trial until its conclusion in mid-2013 thanks in large part to the October offering but with no Phase III trial underway those funds can quickly diminish.
What SNSS does have could prove profitable though as they were recently granted a patent for the pharmaceutical compositions of their drug candidate vosaroxin and while that patent is scheduled to expire in 2025 it could be eligible for patent term extension. Swisher addressed the significance of the patent saying, “Vosaroxin’s extended patent life to 2025 increases not only the value of our AML franchise but also provides sufficient time for lifecycle evaluation of vosaroxin in other indications. We are pursuing a sophisticated and deliberate strategy to extend exclusive coverage in the vosaroxin patent estate beyond 2025.”
Removing emotion from the equation Sunesis is a biopharmaceutical company that appears ready to launch a Phase III clinical trial for a first-in-class drug to treat cancer and shares are sitting in the 0.38 to 0.40 range. Based on just those facts it’s hard not to see SNSS as an attractive long bet. Of course they’ll have to get FDA approval and that could carry well beyond the projected mid-2013 Phase III end date and anything can happen between now and then.