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Sunesis Pharmaceuticals Reports Second Quarter 2006 Financial Results


SOUTH SAN FRANCISCO, Calif., Aug 10, 2006 /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 June 30, 2006. Total revenues for the second quarter were $6.7 million, with a net loss of $4.5 million. As of June 30, 2006, cash, cash equivalents and marketable securities totaled $79.1 million, a reduction of $3.2 million compared to March 31, 2006.

    Recent Highlights
    -- In April, Sunesis received a $500,000 milestone payment from Biogen
       Idec for the discovery of novel inhibitors of an oncology kinase
    -- At the American Society of Clinical Oncology (ASCO) annual meeting in
       June, Sunesis reported data from two clinical trials of SNS-595
       involving 62 patients with advanced solid tumors designed to examine
       the safety, tolerability and pharmacokinetics of two dosing regimens.
       SNS-595 demonstrated promising signs of clinical activity, with 19 of
       62 patients experiencing sustained disease control lasting at least 16
       weeks, including two confirmed partial responses, in a mesothelioma
       patient and an ovarian cancer patient, at the maximum-tolerated dose
       levels.  SNS-595 was well tolerated, with a dose-limiting toxicity of
       neutropenia and no other significant drug-related toxicities.
    -- In June, Sunesis received a $4.25 million payment in its BACE
       collaboration with Merck for the achievement of two preclinical

    Update on Clinical Programs
    -- Sunesis continues to enroll patients in two Phase II clinical trials of
       SNS-595 in non-small cell lung cancer and small cell lung cancer, a
       Phase I trial of SNS-595 in acute leukemias, and a Phase I/II trial of
       SNS-032 in solid tumors.
    -- Sunesis expects to complete enrollment and present the results of
       the SNS-595 Phase I leukemia trial by the end of 2006.
    -- Sunesis expects to complete enrollment of the first 25 patients
       (stage 1) in the non-small cell lung cancer trial and the first 40
       patients (stage 1) of the small cell lung cancer trial of SNS-595 by
       the end of 2006.
    -- Enrollment of the dose-escalation portion of the Phase I/II trial for
       SNS-032 is expected to be complete by the end of 2006.
    -- Sunesis remains on track to file an Investigational New Drug
       application with the U.S. Food and Drug Administration for SNS-314, the
       company's Aurora kinase inhibitor, by the end of 2006.

    Financial Highlights
    -- Revenue from research collaborations totaled $6.7 million for the
       quarter ended June 30, 2006, compared to $4.7 million for the quarter
       ended June 30, 2005.  This increase in collaboration revenue was
       primarily due to the receipt of milestone payments from partners.
    -- Research and development (R&D) expense was $8.8 million for the second
       quarter 2006, compared to $14.8 million for the second quarter 2005.
       The $6.0 million decrease in R&D expense was primarily due to an $8.0
       million expense in the second quarter 2005 relating to the in-licensing
       of SNS-032 and associated intellectual property.  Excluding this
       expense, R&D expenses increased by $2.0 million from the second quarter
       of 2005 to the same quarter this year.  This increase is due to
       increased expenses related to the development of our three lead
       programs:  SNS-595, SNS-032 and SNS-314.
    -- General and administrative (G&A) expense for the second quarter of 2006
       was $3.2 million, compared to $2.1 million for the second quarter 2005.
       The increase in G&A expense was primarily due to an increase in non-
       cash stock compensation expense in conjunction with the adoption of FAS
       123R and costs related to being a publicly-traded company.
    -- Sunesis reported a net loss of $4.5 million for the second quarter of
       2006, compared to a reported loss of $12.0 million for the second
       quarter 2005.
    -- Cash used in operating activities was $11.5 million for both the six
       months ended June 30, 2006 and 2005.
    -- In the second quarter of 2006, Sunesis recorded non-cash stock
       compensation expense of $689,000.

    Conference Call Information

Sunesis' management will host a conference call to review the results of the quarter on Thursday, August 10 at 10:30 am EDT. Individual and institutional investors can access the call via 800-946-0706 (U.S. and Canada) or 719-457-2638 (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        Six months ended
                                   June 30,                  June 30,
                               2006        2005         2006         2005
                                  (unaudited)              (unaudited)
      Collaboration revenue $4,516,667   $1,682,358   $5,887,372   $3,343,386
      Collaboration revenue
       from related party    2,190,986    3,034,158    3,879,845    5,243,444
      Grant and fellowship
       revenue                      --       34,626       37,901       67,405
    Total revenues           6,707,653    4,751,142    9,805,118    8,654,235

    Operating expenses:
       Research and
        development          8,847,380   14,776,691   18,563,475   21,392,908
       General and
        administrative       3,153,630    2,068,102    5,835,201    3,988,930
    Total operating
     expenses               12,001,010   16,844,793   24,398,676   25,381,838

    Loss from operations    (5,293,357) (12,093,651) (14,593,558) (16,727,603)

    Interest income            957,551      190,473    1,503,704      395,689
    Interest expense          (162,103)    (110,498)    (387,655)    (216,525)
    Other income, net            2,003        3,448        3,893        6,206
    Net loss               $(4,495,906)$(12,010,228)$(13,473,616)$(16,542,233)

    Basic and diluted net
     loss per share             $(0.15)      $(8.55)      $(0.52)     $(11.88)

    Shares used in
     computing basic and
     diluted net loss per
     share                  29,256,267    1,404,129   26,129,745    1,392,040

                          SUNESIS PHARMACEUTICALS, INC.
                            CONDENSED BALANCE SHEETS

                                                 June 30,        December 31,
                                                   2006              2005
    ASSETS                                     (Unaudited)

    Current assets:
       Cash and cash equivalents               $62,298,992       $17,704,465
       Marketable securities                    16,820,670        30,629,061
       Prepaids and other current assets         1,430,023         2,068,195
    Total current assets                        80,549,685        50,401,721

    Property and equipment, net                  4,850,904         4,006,527
    Deposits and other assets                      300,000           300,000
    Total assets                               $85,700,589       $54,708,248


    Current liabilities:
       Accounts payable                         $1,884,692        $2,044,571
       Accrued compensation                      1,698,032         2,067,769
       Other accrued liabilities                 1,411,444         1,277,595
       Current portion of deferred
        revenue                                  2,533,415         3,787,453
       Current portion of equipment
        financing                                  917,750         1,067,520
    Total current liabilities                    8,445,333        10,244,908

    Non current portion of deferred
     revenue                                     2,061,433         3,319,765
    Non current portion of equipment
     financing                                   1,074,913         1,306,027
    Deferred rent and other non-current
     liabilities                                 1,437,080         1,371,346


    Stockholders' equity:
    Preferred stock, $0.0001 per value,
     5,000,000 shares authorized, no
     shares issued and outstanding at
       June 30, 2006 and December 31,
        2005                                            --                --
    Common stock, $0.0001 par value;
     100,000,000 shares authorized,
     29,319,977 and 21,514,007 shares
       issued and 29,319,310 and
        21,511,126 shares outstanding at
        June 30, 2006 and December 31,
        2005                                         2,932             2,151
    Additional paid-in capital                 296,615,863       249,689,714
    Deferred stock compensation                 (1,443,477)       (2,162,688)
    Accumulated other comprehensive loss           (11,970)          (55,073)
    Accumulated deficit                       (222,481,518)     (209,007,902)
    Total stockholders' equity                  72,681,830        38,466,202

    Total liabilities and stockholders'
     equity                                    $85,700,589       $54,708,248

SOURCE Sunesis Pharmaceuticals, Inc.

investors, Eric Bjerkholt, CFO, Sunesis Pharmaceuticals, Inc., +1-650-266-3717; or
media, Karen L. Bergman, +1-650-575-1509, or Michelle Corral, +1-415-794-8662, both
of BCC Partners, for Sunesis Pharmaceuticals, Inc.

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