Sunesis Pharmaceuticals Announces Up To $43.5 Million Financing
April 01 2009 - 12:00PM
PR Newswire (US)
-- Conference Call Scheduled for Today at 5:00 p.m. EDT -- SOUTH
SAN FRANCISCO, Calif., April 1 /PRNewswire-FirstCall/ -- Sunesis
Pharmaceuticals, Inc. (NASDAQ:SNSS) today announced the execution
of a securities purchase agreement with accredited investors
providing for a private placement of up to $43.5 million in a
tranched financing, including two tranches of units consisting of
convertible preferred stock and common stock warrants, and a
tranche of common stock. The private placement contemplates the
sale of up to $15.0 million of units consisting of convertible
preferred stock and warrants to purchase common stock in two
closings. $10.0 million of units would be sold in the initial
closing, which is expected to occur in the near term, subject to
the satisfaction of customary closing conditions. An additional
$5.0 million of units may be sold in a second closing, which may
occur at the company's election or at the election of the investors
in the private placement, and which is subject to approval by
Sunesis Pharmaceuticals' stockholders and the satisfaction of
customary closing conditions. If the closing occurs at the
Company's election, it will also be subject to the satisfaction of
a condition related to the achievement of a specific milestone with
respect to Sunesis Pharmaceuticals' voreloxin product candidate and
Sunesis Pharmaceuticals' common stock trading above a specified
floor price. Subject to approval by Sunesis Pharmaceuticals'
stockholders, the remaining tranche of up to $28.5 million of
common stock can be invested at the election of the holders of a
majority of the convertible preferred stock, in their sole
discretion, with the date of termination of the preferred
stockholders' right to make such an election subject to Sunesis
Pharmaceuticals' future cash balance. In the initial closing for
$10.0 million of units, Sunesis Pharmaceuticals would issue
approximately 2.9 million shares of convertible preferred stock,
which would be convertible into approximately 29.0 million shares
of common stock, and warrants to purchase approximately 29.0
million shares of common stock. In the second closing for an
additional $5.0 million of units, if completed, Sunesis
Pharmaceuticals would issue approximately 1.45 million shares of
convertible preferred stock, which would be convertible into
approximately 14.5 million shares of common stock, and warrants to
purchase approximately 14.5 million shares of common stock. The per
unit purchase price for a share of convertible preferred stock and
a warrant to purchase 10 shares of common stock would be $3.45 for
both the first and second closings. The warrants issuable at the
first and second closings would have an exercise price of $0.22 per
share and a term of 7 years from issuance. In the closing for $28.5
million of common stock, if completed, Sunesis Pharmaceuticals
would issue approximately 103.6 million shares of common stock at a
purchase price of $0.275 per share. Upon the initial closing,
certain of the investors would have the right to designate three of
eight members of Sunesis Pharmaceuticals' Board of Directors.
Following the second closing, if completed, the investors would
have the right to designate five of nine members of the Board of
Directors. In conjunction with this private placement, when the
initial closing takes place, the investors will receive a number of
additional rights as a result of their convertible preferred stock
ownership, including the right to approve any sale of the company,
any issuance of debt or preferred stock and, except if certain
conditions are met, any issuance of common stock, other than the
second closing and the common stock closing described above. Upon
any sale of the company or the majority of its assets or shares or
a significant partnering transaction, the holders of the
convertible preferred stock would have a right to receive proceeds
equal to three times the purchase price of each unit for each share
of convertible preferred stock, in preference to any other class of
stock. Participants in the transaction include funds managed by Bay
City Capital, New Enterprise Associates, Alta Partners, Caxton
Advantage Life Sciences Fund, Merlin Nexus, Nextech Venture,
OpusPoint Partners, Venrock Associates and Vision Capital Advisors.
Members of management also participated in this transaction.
Jefferies & Company, Inc. acted as the exclusive placement
agent for this transaction, and Cowen and Company, LLC and RBC
Capital Markets Corporation served as financial advisors.
"Following last year's restructuring to focus our resources on
advancing our promising lead oncology product candidate, voreloxin,
we are pleased to note the significant patient accrual,
investigator interest and growing body of evidence of voreloxin's
therapeutic potential across our acute myeloid leukemia (AML) and
ovarian cancer phase 2 clinical trials," said Daniel Swisher,
Sunesis' Chief Executive Officer. "The resulting progress has
enabled us to attract a syndicate of supportive investors to this
tranched financing that has the potential to support voreloxin
through late stage development in AML and to the anticipated filing
of an NDA. In the midst of a difficult financing market, we are
pleased to have the opportunity to realize the potential for
voreloxin to be a first-in-class anti-cancer agent for treating
these diseases, and potentially other hematologic and solid
tumors." In conjunction with the closing of the private placement,
the company expects to complete a reduction in force affecting six
employees, including two executives: Valerie Pierce, Senior Vice
President and General Counsel, and Dr. Lesley Stolz, Vice President
Business and Corporate Development. In addition, Dr. Jim Young is
retiring as Executive Chairman and will continue to serve on the
Board of Directors as non-executive Chairman. "I am saddened by the
departure of these trusted colleagues. Their individual and
combined contributions to Sunesis over the years have been
invaluable. I thank them for their service," added Mr. Swisher.
Conference Call Information Sunesis management will host a
conference call today to review the private placement, as well as
the fourth quarter and the 2008 fiscal year results reported
separately today, and to provide a general business update at 5:00
p.m. EDT / 2:00 p.m. PDT. Individual and institutional investors
can access the call via 1-877-874-1567 (U.S. and Canada) or
+1-719-325-4788 (international). To access the live audio webcast
or the subsequent archived recording, visit the "Investors and
Media - Calendar of Events" section of the Sunesis website at
http://www.sunesis.com/. The webcast will be recorded and available
for replay on the company's website until April 15, 2009. About
Sunesis Pharmaceuticals Sunesis is a biopharmaceutical company
focused on the development and commercialization of new oncology
therapeutics for the treatment of hematologic and solid cancers.
Sunesis has built a highly experienced cancer drug development
organization committed to advancing its lead product candidate,
voreloxin, in multiple indications to improve the lives of people
with cancer. For additional information on Sunesis Pharmaceuticals,
please visit http://www.sunesis.com/. The securities to be issued
in the private placement have not been registered under the
Securities Act of 1933, as amended (the "Securities Act'), or any
state securities laws and unless so registered may not be offered
or sold in the United States except pursuant to an exemption from,
or in a transaction not subject to, the registration requirements
of the Securities Act and applicable state securities laws. This
press release contains forward-looking statements, including
without limitation statements related to the completion of the
financing transaction described in this press release and the
sufficiency of the proceeds thereof to support voreloxin through
late stage development in AML and to the anticipated filing of an
NDA. Words such as "potential," "expected," "anticipated," "would"
and similar expressions are intended to identify forward-looking
statements. These forward-looking statements are based upon
Sunesis' current expectations. Forward-looking statements involve
risks and uncertainties. Sunesis' actual results and the timing of
events could differ materially from those anticipated in such
forward-looking statements as a result of these risks and
uncertainties, which include, without limitation, risks related to
the satisfaction of the conditions to the completion of each
tranche of the financing transaction, including the risk that the
conditions to closing may not be satisfied, resulting in Sunesis
not receiving any of the expected proceeds from the transaction;
risks related to Sunesis' need for additional funding; risks
related to the terms of the financing transaction and securities to
be issued; the risk that Sunesis' development activities for
voreloxin, including enrollment and reporting of results, could be
halted significantly or delayed for various reasons; and the risk
that Sunesis' clinical trials for voreloxin may not demonstrate
safety or efficacy or lead to regulatory approval. These and other
risk factors are discussed under "Risk Factors" and elsewhere in
Sunesis' Quarterly Report on Form 10-Q for the quarter ended
September 30, 2008, Current Report on Form 8-K anticipated to be
filed on the date of this press release and other filings with the
Securities and Exchange Commission. Sunesis expressly disclaims any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in the company's expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statements are based. SUNESIS and the logo are
trademarks of Sunesis Pharmaceuticals, Inc. Investor Contact:
Sunesis Pharmaceuticals, Inc. Eric Bjerkholt 650-266-3717 Media
Contact: Sunesis Pharmaceuticals, Inc. Dan Weinseimer 650-266-3739
DATASOURCE: Sunesis Pharmaceuticals, Inc. CONTACT: Investor, Eric
Bjerkholt, +1-650-266-3717, or Media, Dan Weinseimer,
+1-650-266-3739, both of Sunesis Pharmaceuticals, Inc. Web Site:
http://www.sunesis.com/
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