Sunesis plummets as the FDA sends it back to the drawing board

Sunesis CEO Daniel Swisher

Despite its lead drug's failure in a late-stage trial last year, Sunesis Pharmaceuticals ($SNSS) held on to hope that it could convince the FDA to give the leukemia treatment a shot at approval. But its argument apparently fell on deaf ears, as the agency asked to see more clinical data before evaluating the therapy.

Sunesis' drug, vosaroxin is a derivative of the antibacterial agent quinolone designed to treat the rare acute myeloid leukemia. In Phase III results disclosed in October, a combination of vosaroxin and generic cytarabine failed to significantly improve overall survival compared to the old drug alone, but Sunesis stayed upbeat, pointing to subpopulation data suggesting its treatment might benefit older patients who had never received stem cell transplants.

The FDA, however, was less than convinced. At a meeting with Sunesis, U.S. regulators advised the company not to file vosaroxin for approval, instead asking for another clinical trial before considering the drug.

The news sent Sunesis' already diminished share value down nearly 70% on Friday, nixing the biotech's gradual gains since October's trial failure.

But all is not lost for vosaroxin, according to the company. In parallel with its FDA meeting, the biotech sat down with U.K. and Dutch regulators and came away with plans to submit a European application for vosaroxin as a treatment for AML patients over 60, filing the drug "as expeditiously as possible," the company said.

"We are at once encouraged by our interactions with European regulators and disappointed with the outcome of our meeting with their U.S. counterparts," CEO Daniel Swisher said in a statement. "Our belief, supported by many in the medical community, is that the VALOR outcomes for patients with high unmet needs were both compelling and an important step forward in addressing the enduring challenges of treating AML."

- read the statement