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Sunesis Pharmaceuticals Reports Third Quarter 2005 Financial Results

11/14/05

SOUTH SAN FRANCISCO, Calif., Nov 14, 2005 /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 September 30, 2005. Revenue for the third quarter was $3.3 million, with a net loss of $5.6 million. As of September 30, 2005, cash, cash equivalents and marketable securities totaled $55.0 million and debt totaled $2.5 million.

Quarter Highlights

     * The company completed enrollment of the first Phase I clinical trial of
       SNS-595, Sunesis' lead novel cytotoxic anticancer drug.  The trial is
       an open-label, multi-center, dose-escalation study designed to examine
       the safety, tolerability and pharmacokinetics of SNS-595.  The results
       of this trial will be presented at the upcoming European Organization
       for Research and Treatment of Cancer ("EORTC") conference on November
       17, 2005.

     * On August 29, 2005, Sunesis announced the selection of SNS-314 as the
       lead development candidate from the company's internal efforts to
       discover novel Aurora kinase inhibitors.  SNS-314 has shown promising
       activity and pharmaceutical properties in animal models.  Sunesis plans
       to file an Investigational New Drug (IND) application for this compound
       in 2006.

     * On September 30, 2005, the company completed an initial public offering
       ("IPO") of common stock with gross proceeds of $42.0 million.

    Financial Highlights

     * Revenue from research collaborations totaled $3.3 million and $11.9
       million for the three-month and nine-month periods ended September 30,
       2005, respectively, compared to $2.8 million and $6.3 million for the
       three-month and nine-month periods ended September 30, 2004,
       respectively.  This increase in revenue is primarily due to the signing
       of the kinase collaboration with Biogen Idec in August 2004.

     * Research and development (R&D) expense was $6.9 million and $28.3
       million for the three-month and nine-month periods ended September 30,
       2005, respectively.  R&D expense for the three-month and nine-month
       periods ended September 30, 2004, was $5.6 million and $17.5 million,
       respectively.  The $10.8 million increase in R&D expenses between the
       nine-month periods ended September 30, 2004 and September 30, 2005 is
       primarily due to an $8.9 million expense related to the in-licensing of
       SNS-032 and related intellectual property from Bristol-Myers Squibb in
       April 2005, of which $8.0 million represents a non-cash licensing fee,
       and a $2.8 million increase in expense related to the development of
       SNS-314, our Aurora kinase inhibitor.

     * General and administrative (G&A) expense for the third quarter was $2.1
       million, compared to $1.8 million for the prior year.  For the nine-
       month period ended September 30, 2005, these expenses were $6.1
       million, compared to $5.5 million for the nine-month period ended
       September 30, 2004.  The increase is G&A expense is primarily due to an
       increase in non-cash stock compensation expense.

     * Sunesis reported a net loss of $5.6 million for the third quarter and
       $22.2 million for the nine-month period ended September 30, 2005,
       compared to a reported loss of $4.5 million and $16.5 million,
       respectively, for the three-month and nine-month periods ended
       September 30, 2004.  The loss applicable to common shareholders was
       $93.7 million for the third quarter, including a $88.1 million non-cash
       deemed dividend related to the conversion of preferred stock into
       common stock in conjunction with the IPO.  This non-cash deemed
       dividend results from the redistribution of pre-IPO ownership which
       occurred in conjunction with the company's IPO.

    Company Milestones

Sunesis anticipates the following milestones in its development programs to occur over the next four months:

* Report results from a Phase I clinical trial of SNS-595 in patients
       with advanced solid tumors at the EORTC conference on November 17.

     * Initiate a multi-center open-label Phase I clinical trial of SNS-595 in
       patients with acute leukemias.

     * Initiate a multi-center, open-label Phase II second-line clinical trial
       of SNS-595 in patients with non-small cell lung cancer.

     * Initiate a multi-center, open-label Phase II second-line clinical trial
       of SNS-595 in patients with small cell lung cancer.

     * Initiate a multi-center, open-label Phase I/II clinical trial of SNS-
       032, our inhibitor of CDK 2, 7 and 9, in patients with advanced solid
       tumors.

    Conference Call Information

Sunesis' management will host a conference call to review the results of the quarter on Monday, November 14 at 1:30 pm PST. Individual and institutional investors can access the call via (800) 310-6649 (domestic) or (719) 457-2693 (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 http://www.sunesis.com. 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 http://www.sunesis.com.

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           Nine months ended
                                 September 30,               September 30,
                              2005         2004           2005         2004
                                (unaudited)                 (unaudited)
    Revenue:
      Collaboration
       revenue           $1,685,537   $1,574,669     $5,028,923    $4,302,942
      Collaboration
       revenue from
       related party      1,637,499    1,205,657      6,880,943     1,991,731
      Grant and
       fellowship
       revenue               21,942       38,914         89,347       135,505
    Total revenues        3,344,978    2,819,240     11,999,213     6,430,178

    Operating expenses:
       Research and
        development       6,870,942    5,604,924     28,263,850    17,504,300
       General and
        administrative    2,067,215    1,779,898      6,056,145     5,477,888
    Total operating
     expenses             8,938,157    7,384,822     34,319,995    22,982,188

    Loss from operations (5,593,179)  (4,565,582)   (22,320,782)  (16,552,010)

    Interest income         178,515      111,400        574,204       316,102
    Interest expense       (229,450)     (88,755)      (445,975)     (299,494)
    Other income
     (expense), net           2,094          726          8,300           733
    Net loss             (5,642,020)  (4,542,211)   (22,184,253)  (16,534,669)
    Convertible
     preferred stock
     dividends          (88,092,302)           -    (88,092,302)            -
    Loss applicable to
     common
     stockholders      $(93,734,322) $(4,542,211) $(110,276,555) $(16,534,669)


    Basic and diluted
     net loss per
     share applicable
     to common
     stockholders           $(45.12)      $(3.51)       $(67.58)      $(12.89)
    Shares used in
     computing basic
     and diluted loss
     per share
     applicable to
     common
     stockholders         2,077,245    1,294,835      1,631,700     1,283,179


                        Sunesis Pharmaceuticals, Inc.
                           Condensed Balance Sheet

                                                 September 30,   December 31,
                                                      2005          2004
                                                        (Unaudited)
    Current assets:

    Cash and cash equivalents                    $45,212,955    $7,587,512
    Marketable securities                          9,777,438    29,224,509
    Other current assets                           1,803,917     1,839,259
    Total current assets                          56,794,310    38,651,280

    Note and interest receivable from officers
     and employees                                         -        85,350
    Property and equipment, net                    3,982,635     3,989,357
    Deposits and other assets                        300,000       300,000
    Total assets                                  61,076,945    43,025,987

    Current liabilities:
    Short-term liabilities                         9,642,547     9,653,051
    Current portion of equipment financing         1,138,076     1,291,363
    Total current liabilities                     10,780,623    10,944,414

    Other long term liabilities                    5,742,446     8,874,093
    Borrowings under debt facility with
     related party                                         -     3,200,000
    Non current portion of equipment financing     1,351,785     1,238,430

    Commitments
    Convertible preferred stock                            -   108,812,619

    Stockholders' equity (deficit):
    Common stock                                       2,146           139
    Additional paid-in capital and other         246,893,143     3,372,935
    Accumulated deficit                         (203,693,198)  (93,416,643)
    Total stockholders' equity (deficit)          43,202,091   (90,043,569)

    Total liabilities, convertible preferred
     stock and stockholders' equity(deficit)      61,076,945    43,025,987

SOURCE Sunesis Pharmaceuticals, Inc.

investors, Eric Bjerkholt, CFO of 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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