1061027--3/15/2007--SUNESIS_PHARMACEUTICALS

related topics

{product, candidate, development}

{product, liability, claim}

{stock, price, share}

{stock, price, operating}

{regulation, change, law}

{property, intellectual, protect}

{cost, regulation, environmental}

{operation, natural, condition}

{provision, law, control}

{control, financial, internal}

{interest, director, officer}

{personnel, key, retain}

{acquisition, growth, future}

Risks Related to Our Business We have incurred losses since inception and anticipate that we will continue to incur losses for the foreseeable future. We may not ever achieve or sustain profitability. We will require substantial additional funding, which may not be available to us on acceptable terms, or at all. There is a high risk that our drug discovery and development activities could be halted significantly or delayed for various reasons. Our clinical trials for our lead product candidates, SNS-595, SNS-032 and SNS-314, may not demonstrate safety or efficacy or lead to regulatory approval. If we fail to maintain our existing, or enter into new, strategic collaborations, we may have to reduce or delay our product candidate development or increase our expenditures. The results of preclinical studies and clinical trials may not satisfy the requirements of the FDA or other regulatory agencies. Our approach to developing cancer therapeutics by inhibiting cyclin-dependent kinases, Aurora kinases and Raf kinases has not been clinically validated and may not be successful. The failure to enroll patients for clinical trials may cause delays in developing our product candidates. We rely on a third party to manufacture our product candidates, including SNS-595, SNS-032 and SNS-314, and depend on a single supplier for SNS-595 and SNS-032. There is a limited number of manufacturers that are capable of manufacturing the active ingredient of SNS-595. We expect to significantly expand our clinical research and development and marketing capabilities, and any difficulties retaining key personnel or managing this growth could disrupt our operations. If we are sued for infringing intellectual property rights of third parties, litigation will be costly and time consuming and could prevent us from developing or commercializing our future products. If our competitors develop and market products that are more effective, safer or less expensive than our future products, our commercial opportunities will be negatively impacted. Our proprietary Tethering drug discovery approach is experimental and may not discover any therapeutic compounds of commercial value. We rely on third parties to conduct our clinical trials for SNS-595 and SNS-032 and plan to rely on third parties to conduct our clinical trials for SNS-314. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may be unable to obtain regulatory approval for or commercialize SNS-595, SNS-032, SNS-314 or any of our other product candidates. The commercial success of our collaborations depends in part on the development and marketing efforts of our collaboration partners, over which we have limited control. If our collaborations are unsuccessful, our potential to develop and commercialize products through our collaborations, and to generate future revenue from the sale of these products, would be significantly reduced. If conflicts of interest arise between our collaboration partners and us, any of them may act in their self-interest, which may be adverse to our interests. Our proprietary rights may not adequately protect our technologies and product candidates. The composition of matter patents covering SNS-595 are due to expire in 2015. Even if SNS-595 is approved by the FDA, we may not be able to recover our development costs prior to the expiration of these patents. The composition of matter patents covering SNS-032 are due to expire in 2018 in the U.S. Even if SNS-032 is approved by the FDA, we may not be able to recover our development costs prior to the expiration of these patents. We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of our employees former employers. We currently have limited marketing staff and no sales or distribution organization. If we are unable to develop a sales and marketing and distribution capability on our own or through collaborations with marketing partners, we will not be successful in commercializing our future products. We depend on various scientific consultants and advisors for the success and continuation of our research and development efforts. Our facilities are located near known earthquake fault zones, and the occurrence of an earthquake or other catastrophic disaster could cause damage to our facilities and equipment, which could require us to cease or curtail operations. Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses. Risks Related to Our Industry The regulatory approval process is expensive, time consuming and uncertain and may prevent us or our collaboration partners from obtaining approvals for the commercialization of some or all of our product candidates. Even if we receive regulatory approval to market our product candidates, the market may not be receptive to our products. Even if we receive regulatory approval for a product candidate, we will be subject to ongoing FDA obligations and continued regulatory review, which may result in significant additional expense and limit our ability to commercialize our future products. The coverage and reimbursement status of newly approved drugs is uncertain, and failure to obtain adequate coverage and reimbursement could limit our ability to market any future products we may develop and decrease our ability to generate revenue. Failure to obtain regulatory approval in foreign jurisdictions will prevent us from marketing our products abroad. We may incur significant costs complying with environmental laws and regulations, and failure to comply with these laws and regulations could expose us to significant liabilities. We may be subject to costly claims related to our clinical trials and may not be able to obtain adequate insurance. Foreign governments often impose strict price controls, which may adversely affect our future profitability. Risks Related to Our Common Stock The price of our common stock may continue to be volatile, and the value of an investment in our common stock may decline. The ownership of our common stock is highly concentrated, and your interests may conflict with the interests of our existing stockholders. If we sell shares of our common stock in future financings, common stockholders may experience immediate dilution and, as a result, our stock price may go down. Provisions of our charter documents or Delaware law could delay or prevent an acquisition of our company, even if the acquisition would be beneficial to our stockholders, and could make it more difficult to change management. We have never paid dividends on our capital stock and we do not anticipate paying any cash dividends in the foreseeable future. Changes in financial accounting standards related to share-based payments are expected to continue to have a significant effect on our reported results.

Full 10-K form ▸

1061027--3/15/2007--SUNESIS_PHARMACEUTICALS_INC