On August 7, 2019 Sunesis Pharmaceuticals, Inc. (Nasdaq: SNSS) reported financial results for the quarter ended June 30, 2019 (Press release, Sunesis, AUG 7, 2019, View Source [SID1234538367]). Loss from operations for the three and six months ended June 30, 2019 was $6.2 million and $11.9 million. As of June 30, 2019, cash and cash equivalents, restricted cash, and marketable securities totaled $17.7 million. Subsequent to the end of the quarter, the Company raised approximately $25.9 million in net proceeds from an underwritten offering.

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"We continue to make progress in the Phase 1b/2 trial of our non-covalent BTK inhibitor vecabrutinib in chronic lymphocytic leukemia and other B-cell malignancies. At the annual European Hematology Association (EHA) (Free EHA Whitepaper) meeting in June, we presented preliminary data demonstrating vecabrutinib’s well-tolerated safety profile and evidence of clinical activity," said Dayton Misfeldt, Interim Chief Executive Officer of Sunesis. "More recently, in July, we announced completion of the safety evaluation period for the 200mg cohort, which continues to support the favorable safety profile with no drug-related serious adverse events experienced to date. We look forward to further defining the profile of vecabrutinib in the current study as we prepare for the upcoming Phase 2. We plan on sharing the next clinical update on the study at the annual American Society of Hematology (ASH) (Free ASH Whitepaper) meeting later this year."

"In addition, we strengthened our balance sheet by completing an equity offering in July with leading biotechnology investors, as well as refinancing our previous loan with a new facility from Silicon Valley Bank in April. The proceeds from our recent offering extends our cash runway through key milestones including the initiation of the Phase 2 portion of the trial."

Recent Highlights

Advanced Phase 1b/2 Trial of Vecabrutinib into 300 mg Cohort. In July 2019, Sunesis opened enrollment in the 300 mg cohort in the Phase 1b/2 trial of its non-covalent BTK inhibitor vecabrutinib in adults with relapsed/refractory chronic lymphocytic leukemia (CLL) and other B-cell malignancies.

Presented Preliminary Data at the EHA (Free EHA Whitepaper) Annual Meeting. In June 2019, Sunesis presented preliminary data from the ongoing vecabrutinib clinical trial at the 24th Congress of the European Hematology Association (EHA) (Free EHA Whitepaper) in Amsterdam. The promising data builds upon vecabrutinib’s safety, activity, pharmacokinetic, and pharmacodynamic profile.

Completion of Public Offering. In July 2019, Sunesis completed underwritten public offerings of shares of its common stock and Series F convertible preferred stock with net proceeds of approximately $25.9 million. The offerings attracted participation from leading biotechnology investors and will allow Sunesis to advance vecabrutinib through important clinical milestones as the ongoing dose-escalation study explores potentially active dose levels.

Secured $5.5 Million Loan. In April 2019, the Company entered into a $5.5 million loan agreement with Silicon Valley Bank (SVB), allowing the Company to retire its existing loan. The new agreement allows the Company to defer any principal repayment on the new loan for more than 18 months, with interest-only payments through 2020 and principal repayment over 24 months beginning in 2021. The new loan also has a lower interest rate and was used to repay the Company’s prior loan.

Announced Executive Promotions. In July 2019, Sunesis promoted Judy Fox, Ph.D. to Chief Scientific Officer, Executive Vice President, Research & Development, and Parvinder (Par) S. Hyare to Senior Vice President, Commercial. We look forward to their leadership as we prepare for the next stage of the Company’s growth.

Financial Highlights

Cash and cash equivalents, restricted cash, and marketable securities totaled $17.7 million as of June 30, 2019, as compared to $13.7 million as of December 31, 2018. This capital, plus the approximately $25.9 million in net proceeds from the July 2019 public offerings, is expected to fund the Company through the initiation of the Phase 2 portion of the ongoing vecabrutinib Phase 1b/2 trial. The increase of $4.0 million was primarily due to $19.0 million net proceeds from issuance of common and preferred stock, and $5.5 million proceeds from SVB Loan Agreement, offset by $13.0 million net cash used in operating activities and $7.5 million used in principal payments to repay the Company’s prior loan.

Research and development expense was $3.7 million and $6.9 million for the three and six months ended June 30, 2019, as compared to $3.8 million and $7.7 million for the same periods in 2018. The decreases between the comparable periods were primarily due to a decrease in salary and personnel expenses due to lower headcount, decrease in professional services related to higher expenses incurred in the first half of 2018 for the start-up costs of the Phase 1b/2 trial for vecabrutinib, offset by an increase in clinical expenses related to the preparation for the Phase 2 portion of the ongoing clinical trial of vecabrutinib.

General and administrative expense was $2.5 million and $5.0 million for the three and six months ended June 30, 2019, as compared to $2.8 million and $6.2 million for the same periods in 2018. The decreases between the comparable periods were primarily due to a decrease in salary and personnel expenses due to lower headcount and stock-based compensation and a decrease in professional services expenses due to lower legal and vosaroxin patent expenses.

Interest expense was $0.1 million and $0.4 million for the three and six months ended June 30, 2019, as compared to $0.3 million and $0.6 million for the same periods in 2018. The decreases in interest expense from both periods resulted from a lower interest rate on a lower principal amount under the SVB Loan Agreement.

Cash used in operating activities was $13.0 million for the six months ended June 30, 2019, as compared to $12.4 million for the same period in 2018. Net cash used in the six months ended June 30, 2019, resulted primarily from the net loss of $12.1 million, partially offset by adjustments for non-cash items of $0.9 million and changes in operating assets and liabilities of $1.8 million. Net cash used in the six months ended June 30, 2018, resulted primarily from the net loss of $14.1 million, partially offset by adjustments for non-cash items of $1.6 million and changes in operating assets and liabilities of $0.1 million.

Sunesis reported loss from operations of $6.2 million and $11.9 million for the three and six months ended June 30, 2019, as compared to $6.6 million and $13.7 million for the same periods in 2018. Net loss was $6.2 million and $12.1 million for the three and six months ended June 30, 2019, as compared to $6.8 million and $14.1 million for the same periods in 2018.

Conference Call Information

Sunesis will host a conference today at 4:30 p.m. Eastern Time. The call can be accessed by dialing (844) 296-7720 (U.S. and Canada) or (574) 990-1148 (international) and entering passcode 2686126. 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 www.sunesis.com. The webcast will be recorded and available for replay on the Company’s website for two weeks.