Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) Has Yet to Recover

[[tagnumber 0]][[tagnumber 1]]The shares of Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) have enjoyed a mild upturn after the biopharmaceutical company published new data for its VALOR Phase 3 study for the evaluation of Qinprezo, the company‘s lead product candidate for the treatment of acute myeloid leukemia (AML). Oddly enough, it is the same clinical trial that had a devastating impact on the stock last October and things have never been the same ever since.[[tagnumber 2]] [[tagnumber 0]][[tagnumber 4]]When SNSS announced last October that its VALOR Phase 3 study for its lead product candidate Qinprezo had failed to meet its primary endpoint, stockholders took a huge hit as SNSS shares lost a whopping 78 per cent in value in just a single day of trade, never to recover completely, as it has so far turned out. So when the additional results came out earlier this month, they provided a glimmer of hope that a New Drug Application (NDA) could still be pursued after all on the ground that the study has still yielded somewhat promising results on secondary endpoints. This in turn incentivized investors to give the stock another chance and SNSS shares gained 18 per cent till June 22 before subsiding again afterwards. At present, SNSS is traded around $2.85 per share, which is still a hefty 60+ per cent away from the stock‘s 52–week high of $8.46 achieved last August. So does Sunesis have what it takes to rebound to its pre–October quotes?[[tagnumber 2]] [[tagnumber 0]]Maybe. However, there are a few challenges that will need to be dealt with first. Had the VALOR outright met its primary goal, the company could already have submitted an NDA before the Food and Drug Administration (FDA) in the USA and the European Medicine Agency (EMA) in Europe. Although management have hinted at impending talks with either organization later this year, a commercially available end product in the face of the company‘s Qinprezo (vosaroxin) is still not guaranteed. This was further confirmed by the managers who expect not to have a product ready for sale until 2016 (see page 16 in the report).[[tagnumber 2]] [[tagnumber 0]]As it is, it will be a while before SNSS generates its first dollar of revenue that is solely based on product sales. Indeed, the company has been making some money through a couple of licensing agreements, albeit highly insufficient to cover the major R&D and administrative expenses related to the VALOR clinical trial. In this respect, the $25 million loan agreement concluded in October 2011, as well as the Controlled Equity Offering for $20 million worth of stock from August that year, which was increased by $30 million in 2013 and by an additional $30 million in 2015, has hardly taken anyone by surprise. As soon as these sources of fresh capital are depleted, Sunesis will likely be adding yet more debt to the already $530+ million of deficit it has accumulated since inception in 1998.[[tagnumber 2]] [[tagnumber 0]]Even though Sunesis’s figures appear daunting at first, they represent the typical situation for each emerging biotech set to provide novel solutions to yet unmet medical needs. While the odds might not seem to be in SNSS’s favor, it will still be interesting to see if Qinprezo does have the potential to be given the green light by the FDA and/or the EMA in due course. A positive outcome will certainly send the stock flying high.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]]