Current Partnerships
Strategic collaborations with other companies have been an important part of both our drug development process, and our growth and development as a biopharmaceutical company. Our collaborations are target-specific. Collaborating with other companies helps us leverage and expand our internal development capabilities, manage our cash expenditures and diversify risk. We expect collaborations to continue to be a strong focus going forward.
SARcode LFA-1 Out-License
In January 2007, Sunesis announced the license of the company's LFA-1 inhibitor program to SARcode Corporation, a privately held biopharmaceutical company. SARcode intends to use the license to develop small molecule drugs to treat inflammatory diseases. Sunesis had previously discontinued the LFA-1 inhibitor program, which is outside of the company's strategic focus on discovering and developing novel small molecule therapeutics to treat cancer.
Sunesis received a license fee and a note convertible into preferred stock when SARcode received Series A funding. Under the terms of the license agreement, SARcode received an exclusive, worldwide license to all Sunesis LFA-1 patents and related know-how. In addition to cash and note payments already received, Sunesis may in the future receive additional license fees and convertible notes, development and marketing milestone payments and royalties for the commercialization of a licensed compound.
Biogen Idec Kinase Collaboration
In August 2004, Sunesis entered into a collaboration agreement with Biogen Idec Inc. to discover, develop, and commercialize small molecule inhibitors of Raf kinase and up to five additional oncology kinase targets. The primary focus of the program is to discover small molecule inhibitors of kinases that play a role in oncology indications or in the regulation of the human immune system.
Under the agreement, Sunesis received a significant upfront technology access fee. In addition, Biogen Idec made a significant equity investment in Sunesis. The initial research term is four years, and both parties agreed to dedicate the research personnel provided in the research plan. Biogen Idec will bear all costs (excluding patent costs) related to this program for all targets through at least the completion of Phase 1 clinical trials, after which we have the right to participate in the co-development and co-promotion of up to two product candidates developed through this program on a worldwide basis.
Biogen Idec is required to pay Sunesis for Sunesis' personnel dedicated to the collaboration as well as pre-commercialization milestones per target and royalty payments depending on product sales. Royalty payments may be increased if Sunesis exercises the option to co-development and co-promotion rights.
Raf kinase is an enzyme in the Ras pathway, a signaling pathway important to cell proliferation. The Ras pathway is believed to be abnormally activated in many human cancers by various mechanisms. In approximately 15% of human cancers, a Ras gene is activated by mutation.
Sunesis provided Raf kinase inhibitors derived from Tethering to the collaboration and has jointly with Biogen Idec optimized these molecules to show in vivo efficacy in animal models. The goal of this program is to develop Raf kinase inhibitors with improved pharmaceutical properties as compared to other Raf kinase inhibitors in development.
Additionally, Sunesis is applying Tethering to discover novel small molecule leads that inhibit up to five additional oncology kinase targets. Together with Biogen Idec, Sunesis is working on the identification, optimization, and development of inhibitor drugs for these kinases.
Merck Antiviral Out-License
In July 2004, Sunesis entered into a license and collaborative research agreement with Merck & Co., Inc. that allows Merck to discover and develop small-molecule drugs against an enzyme target for treating viral infections. Merck holds worldwide rights to commercialize any drugs resulting from this collaboration.
Under the terms of the agreement, Sunesis received an upfront technology access fee and annual license fees from Merck. The initial research term was three years with the option to extend the research term for one year upon mutual agreement. The research term of the agreement expired in July 2007.
As part of the collaboration, Sunesis assigned Merck both the small molecule compounds related to the viral target and our interest in both the research program patents and compounds that act on the target through inhibition mode. Merck owns all intellectual property generated in the course of performing the research except for improvements related to Tethering. Merck is also required to pay pre-commercialization milestone payments as well as royalty payments based on product sales.
Merck BACE Collaboration
In February 2003, Sunesis entered into a license and collaboration agreement with Merck to discover, develop and commercialize small molecule inhibitors of BACE, or beta amyloid converting enzyme, an enzyme that is believed to be important for the progression of Alzheimer's disease. During the period of the research term plus one year, Sunesis and Merck agreed to work together exclusively to develop a pharmaceutical compound. Merck holds worldwide rights to commercialize any drugs resulting from this collaboration and is responsible for advancing the compounds into lead optimization, preclinical studies and clinical trials.
The agreement provides for payment by Merck to Sunesis of a technology access fee and research fees. The initial research term was three years and both parties agreed to dedicate the resource funding provided in the research plan. The research term of the agreement expired in February 2007.
Johnson & Johnson Pharmaceutical Research & Development Collaboration
In May 2002, Sunesis entered into a collaboration agreement with Johnson & Johnson Pharmaceutical Research & Development, LL.C. (J&JPRD) to discover, develop and commercialize small molecule inhibitors of Cathepsin S, an enzyme that is important in regulating the inflammatory response. In this collaboration, Sunesis applied its proprietary Tethering technology to discover small molecule inhibitors of Cathepsin S, an enzyme involved in the activation of T-cells. Both companies believe that small molecule Cathepsin S inhibitors would have the advantages of a novel mechanism of action, ease of oral administration and ease of manufacturing.
Under the terms of the agreement, Sunesis received upfront payments, research funding, and research and development milestone payments, as well as royalty payments based on an exclusive, worldwide license to products resulting from the collaboration.
J&JPRD holds worldwide rights to commercialize any drugs resulting from this program. The research collaboration portion of this agreement ended in December 2005.
SNS-595 In-License
In October 2003, Sunesis entered into a licensing agreement with Dainippon Pharmaceuticals Co., Ltd., now Dainippon Sumitomo Pharmaceuticals, under which we obtained a worldwide exclusive license, including the right to sublicense, to SNS-595 and related compounds.
Under the terms of the agreement, Sunesis provides Dainippon with an upfront payment and milestone payments for starting Phase 2 clinical testing, Phase 3 clinical testing, and for filing NDAs and receiving regulatory approval in the United States, Europe and Japan for cancer treatment. Upon commercialization, Sunesis will also make royalty payments to Dainippon.
In June 2004, we began the first of two Phase 1 clinical trials to evaluate doses and schedules of administration in patients with advanced solid tumors. Since then, Sunesis has initiated an additional Phase 1 clinical trial in certain leukemias. In 2005, Sunesis initiated Phase 2 clinical trials in small-cell and non-small-cell lung cancers and in 2006 Sunesis initiated a Phase 2 clinical trial to evaluate SNS-595 as a stand-alone therapy in ovarian cancer and Phase 1b clinical trials to evaluate SNS-595 in combination with standard treatments in acute leukemias. In 2007, we announced the suspension of enrollment of both our small-cell and non-small-cell lung cancer trials to focus our clinical development efforts for SNS-595 in acute leukemias and ovarian cancer.
SNS-032 In-License
In April 2005, Sunesis entered into a license agreement with Bristol-Myers Squibb under which we obtained worldwide exclusive and non-exclusive diagnostic and therapeutic licenses, including rights to sublicense, to SNS-032 and any related compounds that are active against CDK-1, -2, -4, -7 and -9 and are covered by licensed intellectual property.
The agreement provides BMS with upfront payment and milestone payments for beginning Phase 1, Phase 2, and Phase 3 clinical testing, and for filing NDAs and receiving regulatory approval in the United States, Europe and Japan as well as for achieving certain commercial milestones. The agreement also provides for royalty payments to BMS at rates that are based on total annual net sales.
