Sunesis hits two-year high as review body backs cancer trial
(Reuters) - Shares of Sunesis Pharmaceuticals Inc soared to their highest in two years after the company said a recommendation from an independent committee on the trial of its blood cancer drug vosaroxin would trigger a $25 million investment.
Shares of the company, which rose as much as 52 percent to $4.02, were trading at $3.53 by mid-morning on Tuesday on the Nasdaq.
The recommendation, which followed an interim analysis of data from the study, would trigger an investment by New York-based Royalty Pharma in Sunesis, the company said.
Sunesis said it will increase the total patient enrollment in the late-stage trial by 225 on the recommendation of the independent Data and Safety Monitoring Board (DSMB), bringing the target for the trial to 675 patients. Sunesis expects full enrollment in the trial, titled VALOR, in 2013.
Analysts largely called the development a positive for the company and maintained their optimistic rating on Sunesis' stock.
Cowen & Co analyst Eric Schmidt said the review body's suggestion to increase the patient population implies that vosaroxin's efficacy was trending favorably in the study.
The late-stage study is testing the drug in combination with an approved cancer treatment cytarabine, compared with cytarabine alone, and has its main goal as an improvement in overall survival.
Vosaroxin is intended to treat acute myeloid leukemia, a rapidly progressing blood cancer. According to the American Cancer Society, the disease is likely to cause 10,200 deaths in the United States in 2012.
"We estimate interim data suggests vosaroxin is providing at least a 1-1.5 month survival benefit at this point," Leerink Swann Research analyst Marko Kozul said in a note.
Kozul said he expects the drug to reach the market by 2016.
Vosaroxin could achieve at least $500 million in annual sales, "which is significant for a company of Sunesis' size," Cantor Fitzgerald analyst Mara Goldstein wrote in a note.
In comparison, the company's stock was valued at about $124 million as of Monday, according to Thomson Reuters data.
Analyst Goldstein raised her price target on the company's stock to $8.00, saying Royalty Pharma's cash payment will ensure that Sunesis has enough capital to fund the trial and its other corporate requirements.
In return for its investment in Sunesis, Royalty Pharma will receive 6.75 percent royalty on future sales of vosaroxin and warrants to purchase Sunesis common stock.
(Reporting By Vrinda Manocha and Zeba Siddiqui in Bangalore; Editing by Sreejiraj Eluvangal)
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