Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) Gaps Up on Optimistic Projections and Alerts
11 Nov 2010

Yesterday, the share price of Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) formed a gap on its chart after the effect of the announced positive clinical results for the company’s lead drug candidate were enhanced by some promotional newsletters.

The shares of SNSS entered the market 3 cents higher than they closed the night before and reached out to touch the 50-day moving average of $0.36. Though, the power accumulated on the trading alerts and on the recent corporate updates of the company was not strong enough and the close was again 3 cents below at $0.33. A trading volume of almost three times the average and a bullish MACD lines crossover could also attract more traders in today’s trading session.

Yesterday, the company reported substantial progress with its lead drug candidate vosaroxin (formally voreloxin), designed for the treatment of aggressive blood cancer. The presented updated data from the Phase 2 clinical trials was consistent with the previously presented results at the American Society of Clinical Oncology (ASCO) Annual Meeting, and obviously was satisfactory to proceed with pivotal Phase 3 clinical trial in the current quarter.

It looks like there is some delay in management plans, which anticipated that the pivotal Phase 3 can start already in July this year. Now at least the financing has been secured. In the nine months ended this September, Sunesis improved substantially its cash position, although the decline in the share price confirms that this came at the cost of higher dilution risks. Over $50 million have been raised through the issuance of common stock, convertible preferred stock and warrants.

Subsequently, in the beginning of October the company sold another 44.1 million units at a price of $0.35 each, with each unit consisting of one share of common stock and a warrant to purchase 0.5 of a share of common stock. Net proceeds were $14.3 million, so the current cash position should be over $60 million and the company believes it to be enough to cover the operations until mid-2013.

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