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Sunesis Pharmaceuticals Reports First Quarter 2007 Financial Results


Date of Annual Shareholders' Meeting Set

SOUTH SAN FRANCISCO, Calif., May 4, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Sunesis Pharmaceuticals, Inc. (Nasdaq: SNSS), a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel small molecule therapeutics, today reported financial results for the quarter ended March 31, 2007. Total revenues for the first quarter were $2.5 million, with a net loss of $9.4 million. As of March 31, 2007, cash, cash equivalents and marketable securities totaled $53.1 million, a $10.0 million reduction from December 31, 2006, and debt totaled $1.8 million.

    Recent Highlights

    -- In January Sunesis reported preliminary results from stage one of two
       Phase 2 clinical trials of SNS-595 in patients with small cell and
       non-small cell lung cancer.

       - The small cell lung cancer trial achieved the pre-specified criterion
         for advancing to the second stage of the trial of at least two
         partial responses.  Results from the full 40-patient Phase 2 small
         cell lung cancer trial are expected to be available by the end of
       - In the non-small cell lung cancer trial, SNS-595 demonstrated
         activity, with 16 out of 25 patients achieving stable disease or
         better, including eight minor or mixed responses.  However, these
         results did not meet the rigorous pre-specified criterion for
         advancing to stage 2 of this single agent trial.

    -- In January, Sunesis also announced the contribution of its LFA-1
       inhibitor program to the formation of a new company, SARcode
       Corporation.  As consideration for this contribution, Sunesis received
       a licensing fee and convertible debt.
    -- In late February, Sunesis filed an Investigational New Drug Application
       with the Food and Drug Administration for SNS-314, a potent and
       selective Aurora kinase inhibitor.  Sunesis anticipates initiating a
       Phase 1 clinical trial of SNS-314 in patients with solid tumors by the
       end of the second quarter.
    -- In March, Sunesis presented non-clinical data on SNS-314 demonstrating
       robust activity in multiple tumor models at the International Symposium
       on Targeted Anticancer Therapies (TAT) and the Keystone Symposium on
       Molecular Targets for Cancer.
    -- Also in March, Sunesis initiated a Phase 1 clinical trial of SNS-032, a
       potent and selective inhibitor of cyclin-dependent kinases in patients
       with advanced B-cell malignancies.  In addition to exploring the safety
       and tolerability of SNS-032 in this patient setting, the trial will
       explore the effect of CDK7 and 9 inhibition, and the resulting
       inhibition of survival proteins such as MCL-1, on B-cell malignancies.
    -- At the American Association for Cancer Research Annual Meeting in
       April, Sunesis presented non-clinical data of SNS-032's activity in
       multiple myeloma cells.  The company reported that after six hours'
       exposure of SNS-032, multiple myeloma cells in this experiment undergo
       irreversible apoptosis and cell death.
    -- In April, Sunesis achieved a $1 million milestone in its BACE
       collaboration with Merck & Co., Inc. resulting from the advancement of
       a preclinical candidate.

    Financial Highlights

    -- Revenue from research collaborations and licensing activities totaled
       $2.5 million and $3.1 million for the quarters ended March 31, 2007 and
       2006, respectively.  This decrease in collaboration revenue was
       primarily due to the completion of the research phase of the BACE
       collaboration with Merck & Co., Inc. in February 2006.  Sunesis retains
       the opportunity to earn milestone payments and royalties from any
       products resulting from its collaborations.
    -- Research and development (R&D) expense was $9.3 million for the quarter
       ended March 31, 2007 compared to $9.7 million for the first quarter
       2006.  The first quarter 2006 included a $2 million non-cash milestone
       payment to Bristol Myers Squibb upon commencement of clinical trials
       with SNS-032.  Net of this expense, R&D expenses increased by
       $1.6 million from the first quarter of 2006 to the first quarter of
       2007 due to increased clinical trial funding of SNS-595 and SNS-032.
    -- General and administrative (G&A) expense for the first quarter of 2007
       was $3.3 million, compared to $2.7 million for the first quarter 2006.
       The increase in G&A expense was primarily due to an increase in
       personnel expenses, non-cash stock-based compensation expense, an
       increase in office and facilities costs, and costs related to being a
       publicly traded company.
    -- Sunesis reported a net loss of $9.4 million for the first quarter of
       2007, compared to a reported loss of $9.0 million for the first quarter
       of 2006.
    -- Cash flow from operations was $(9.5) million and $(8.5) million for the
       quarters ended March 31, 2007 and 2006, respectively.
    -- In the first quarter of 2007, Sunesis recorded non-cash stock
       compensation expense of $848,203.

Other Business

Sunesis announced that its Annual Shareholders' Meeting will take place at the company's offices located at 341 Oyster Point Boulevard, South San Francisco, CA 94080 on June 5, 2007 at 9:00 a.m. Pacific Time.

Conference Call Information

Sunesis' management will host a conference call to review the results of the quarter on Friday, May 4, 2007 at 10:00 a.m. Eastern Time. Individual and institutional investors can access the call via (800) 289-0438 (U.S. and Canada) or (913) 981-5527 (international). To access the live audio broadcast or the subsequent archived recording, visit the "Investors and Media -- Calendar of Events" section of the Sunesis website at Please log on to Sunesis' website several minutes prior to the start of the presentation to ensure adequate time for any software download that may be necessary.

About Sunesis Pharmaceuticals

Sunesis is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel small molecule therapeutics for oncology and other serious diseases. Sunesis has built a broad product candidate portfolio through internal discovery and in-licensing of novel cancer therapeutics. Sunesis is advancing its product candidates through in-house research and development efforts and strategic collaborations with leading pharmaceutical and biopharmaceutical companies. For additional information on Sunesis Pharmaceuticals, please visit

Safe Harbor Statement

This press release contains forward-looking statements that involve substantial risks and uncertainties. Sunesis may not actually achieve the plans, intentions or expectations contained in such forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations contained in such forward-looking statements. Sunesis does not assume any obligation to update any such forward-looking statements.

                        Sunesis Pharmaceuticals, Inc.
                           Statements of Operations

                                                 Three months ended March 31,
                                                     2007           2006
      Collaboration revenue                         $229,167     $1,370,705
      Collaboration revenue from related party     2,037,099      1,688,859
      License revenue                                250,000              -
      Grant and fellowship revenue                         -         37,901
    Total revenues                                $2,516,266     $3,097,465

    Operating expenses:
      Research and development                     9,307,478      9,716,095
      General and administrative                   3,296,147      2,681,571
    Total operating expenses                      12,603,625     12,397,666

    Loss from operations                         (10,087,359)    (9,300,201)

    Interest income                                  769,626        546,153
    Interest expense                                 (52,043)      (225,552)
    Other income (expense), net                          739          1,890
    Net loss                                      (9,369,037)    (8,977,710)

    Basic and diluted net loss per share              $(0.32)       $ (0.39)

    Shares used in computing basic and diluted
     net loss per share                           29,457,247     22,968,484

                        Sunesis Pharmaceuticals, Inc.
                           Condensed Balance Sheets

                                                   March 31,    December 31,
                                                     2007           2006
    ASSETS                                       (Unaudited)      (Note 1)

    Current assets:
      Cash and cash equivalents                  $11,005,836     $6,075,449
      Marketable securities                       42,117,157     57,029,199
      Prepaids and other current assets            1,468,314      1,082,817
    Total current assets                          54,591,307     64,187,465

    Property and equipment, net                    4,824,551      4,728,929
    Deposits and other assets                        359,974        359,974
    Total assets                                 $59,775,832    $69,276,368


    Current liabilities:
      Accounts payable                            $1,731,885     $2,477,656
      Accrued compensation                         1,609,254      2,323,742
      Other accrued liabilities                    2,016,851        961,766
      Current portion of deferred revenue          2,031,311      2,260,478
      Current portion of equipment financing         862,088        885,273
    Total current liabilities                      8,251,389      8,908,915

    Non current portion of deferred revenue          705,660      1,143,159
    Non current portion of equipment financing       977,131        955,695
    Deferred rent and other non-current
     liabilities                                   1,478,813      1,464,902


    Stockholders' equity:
    Common stock                                       2,947          2,944
    Additional paid-in capital                   298,822,087    298,073,896
    Deferred stock compensation                     (834,123)    (1,006,604)
    Accumulated other comprehensive loss             (13,872)       (21,376)
    Accumulated deficit                         (249,614,200)  (240,245,163)
    Total stockholders' equity                    48,362,839     56,803,697

    Total liabilities and stockholders'
     equity                                      $59,775,832    $69,276,368

Note 1: The condensed balance sheet at December 31, 2006 has been derived from the audited financial statements at that date included in the Company's Form 10-K for the fiscal year ended December 31, 2006.

SOURCE Sunesis Pharmaceuticals, Inc.

Investors, Eric Bjerkholt, SVP, Corp. Development & Finance, Sunesis
Pharmaceuticals, Inc., +1-650-266-3717; or Media, Karen L. Bergman or Michelle
Corral, BCC Partners, +1-650-575-1509 or +1-415-794-8662

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