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Sunesis Pharmaceuticals (SNSS) Announces $25 Million Tranched Loan Facility
Shortly after the closing bell today, Sunesis Pharmaceuticals, Inc. reported that it has secured a $25 million tranched loan facility. Under the terms of the loan agreement, Sunesis received $10 million upon closing, with the remaining $15 million available for draw at its discretion following the planned interim analysis of the VALOR trial by an independent Data and Safety Monitoring Board (DSMB), which is expected in mid-2012. The company intends to use the funds to support the clinical development activities related to VALOR, a Phase 3, multinational, randomized, double-blind, placebo-controlled, pivotal clinical trial of vosaroxin in combination with cytarabine in first relapsed or refractory acute myeloid leukemia (AML), as well as for other working capital and general corporate purposes.
“This facility provides additional financial strength and flexibility with the initial $10 million tranche increasing our current cash reserves,” stated Eric Bjerkholt, Senior Vice President of Corporate Development and Finance and Chief Financial Officer of Sunesis. “We anticipate that this facility, if fully drawn, together with our existing cash and investments, will substantially fund Sunesis’ execution of the VALOR trial through data unblinding regardless of the outcome at the interim analysis. We appreciate the support of our lender group, their flexibility in structuring a two-tranched, four-year loan, and their confidence in vosaroxin, VALOR and Sunesis.”
The DSMB will meet to review pre-specified efficacy and safety data sets and decide whether to stop the trial early for efficacy or for futility; continue the study to its planned unblinding, expected in mid-2013; or recommend a one-time “adaptive” sample size adjustment to a planned unblinding, expected in early 2014. The $15 million tranche will becaome available to Sunesis, at its option, following the interim analysis, if the DSMB recommends ending the trial early for efficacy or continuing the study with or without a sample size adjustment.
Christopher A. Herr, Managing Director at Oxford Finance, which led the loan facility, commented, “We are pleased to have led this $25 million loan agreement to support the execution of Sunesis’ VALOR trial. Through our diligence process, we have gained great confidence in the trial’s rigorous design and execution.”
The four-year loan facility was structured to have an interest-only period until February 2013, followed by a 32-months amortization period. According to the press release, Sunesis agreed to grant the lenders warrants to purchase an aggregate of 386,100 shares at an exercise price of $1.30. Additional warrants will be due if the second tranche is drawn.
