Sunesis Pharmaceuticals, Inc.
Critical path for Voreloxin likely to be defined in June.
Shares o/s (MM): 50.8
Priced at market close April 29,2010
Price Target: 2.00
Implied All-in return: 115%
Sunesis' primary value driver is Voreloxin, A Phase III ready porduct candidate with positive Phase II data in AML. Sunesis plans to initiate a Phase III trial in H2:10. Recent meeting with FDA confirm the Phase III plan and an upcoming meeting with the EMEA should define the EU strategy. In order to conduct the Phase III trial, SNSS Sunesis will require additional capital, and its plan to access capital will likely take shape in Q2. We reiterate our sector perform rating pending clarity on its financial needs and resolution of its complex capital structure.
More capital needed. Sunesis has three potentially dilutive options for raising capital. 1) SNSS filed a shelf registration for $60M, likely the amount it needs to conduct Phase III. 2) Sunesis entered into an "at the Market" financing facility to sell up to 20M, a potential bridge and means to access capital quickly if liquidity is available. 3) current preferred share holders have an option to purchase up to 28.5M in stock at 0.275/share by the end of June 2010. Exercise of the $28.5M option would force conversion of its preferred shares to common. We expect SNSS is likely to utulize a combination of these financing vehicles in the near term to provide resources to conduct the Phase III program. An alternative strategy would be to partner Voreloxin.
Expect firm Phase III plans in June. Based on guidance from FDA, SNSS intends to start a Phase III trial in H2:10 in 450 patients with relapsed or refractory AML, testing standard chemotherapy +/- Voreloxin. SNSS has Plans to meet with european regulators in Q2 prior to finalizing the protocol, which it expects to initiate in H2:10
Update at ASCO, SNSS will provide updates at ASCO (June 4-8) on its trial of single agent Voreloxinin AML, combination with cytarabine in AML, and single agent in ovarian cancer. ASCO may also serve as venue to disclose the outcome of the EMEA meeting, provided it has the feed back it requires by then.
Valuation: Our $2 price target implies a market capitalization of roughly $480M assuming that the third tranche of its companies financing is completed, and if the associated warrents are exercised. This market capitalization sufficiently values Sunesis' Phase III ready set.
Sunesis potential use with other cancers would greatly increase it its market capitalization the RBC analyst bases his analysis on AML Potential
Yup price can go both ways when asco is over. Catalyst creates hypes that increase the stock price and after asco the hype will die down a bit unless the company spice things up with something new.
that depends on the ASCO results. and they will come out before any offering takes place. it would take anywhere betweeen 2 to 6 weeks to complete one. with stellar results this is a big drug and that changes the dynamics. therefore it is difficult to set the price after the ASCO presentation.
This will likely see a 50% run-up towards asco then depending on the catalyst at asco, it will see a jump in price. May not clear the last 52week high even with good data but who knows, this stock is on the radar or traders now as you can see the volume increase. But the market is unpredictable, a sell off may actually happen after the data is released; hence buy on hype, sell on news. Take my opinion with a grain of salt, and do your own dd. I personally feel comfortable playing the runup but others may not as they are worried about possible dilution scenario.
Anyways GL to us all.
listen dude all the details were known the drugs potential is all that matters. so you are a seasoned trader and you are going to cheer when the buying begins "here we go" give me a break. I know my play and I will do well on this stock. its all about entry point and I'm OK. no offens taken.