Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement and Transaction
On
At the effective time of the Merger, or the Effective Time: (a) each share of Viracta capital stock outstanding immediately prior to the Effective Time, excluding any dissenting shares but including any shares of Viracta capital stock issued pursuant to the Viracta Financing discussed below, will be automatically converted solely into the right to receive a number of shares of Sunesis common stock equal to the exchange ratio described below; and (b) each option or other right to purchase shares of Viracta capital stock, each a Viracta Option, that is outstanding and unexercised immediately prior to the Effective Time under Viracta's 2016 Equity Incentive Plan, or the Viracta Plan, whether or not vested, will be converted into and become an option to purchase Sunesis common stock, and we will assume the Viracta Plan and each such Viracta Option in accordance with the terms of the Viracta Plan and the terms of the stock option agreement by which such Viracta Option is evidenced (but with changes to such documents as we and Viracta mutually agree are appropriate to reflect the assumption of the Viracta Options by us). The number of shares of our common stock subject to each Viracta Option we assume will be determined by multiplying (A) the number of shares of Viracta common stock that were subject to such Viracta Option, as in effect immediately prior to the Effective Time, by (B) the exchange ratio, and rounding the resulting number down to the nearest whole number of shares of Sunesis common stock, and the per share exercise price for our common stock issuable upon exercise of each Viracta Option we assume will be determined by dividing (A) the per share exercise price of Viracta common stock subject to such Viracta Option, as in effect immediately prior to the Effective Time, by (B) the exchange ratio and rounding the resulting exercise price up to the nearest whole cent. Any restriction on the exercise of any Viracta Option we assume will continue in full force and effect and the term, exercisability, vesting schedule, accelerated vesting provisions, and any other provisions of such Viracta Option will otherwise remain unchanged. Each warrant to purchase shares of Viracta Capital Stock that is outstanding and unexercised immediately prior to the Effective Time will be treated in accordance with its terms.
The security holders of Viracta immediately before the Merger (inclusive of
investors in the Viracta Financing) are expected to own approximately 86% of the
aggregate number of outstanding shares of common stock of the combined company
immediately after the consummation of the Merger, or the Closing, and the
security holders of Sunesis immediately before the Merger are expected to own
approximately 14% of the aggregate number of outstanding shares of common stock
of the combined company immediately after the Closing on a fully-diluted basis
using the treasury stock method, subject to certain assumptions, including: (i)
that our net cash as of Closing is
Following the Closing,
The Merger Agreement contains customary representations, warranties and covenants made by Viracta and Sunesis, including covenants relating to obtaining the requisite approvals of the stockholders of Viracta and Sunesis, indemnification of directors and officers, and Viracta's and our conduct of our respective businesses between the date of signing the Merger Agreement and the Closing.
In connection with the Merger, we will prepare and file a registration statement on Form S-4, or the Registration Statement, which will include a proxy statement . . .
Item 2.05 Costs Associated with Exit or Disposal Activities.
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As a result of the workforce reduction, we estimate that we will incur
cumulative severance-related charges of approximately
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On
Under the Retention Program (i) Dr.
Under the Retention Program, subject to his continued employment through the
Closing of the Merger, Mr.
The foregoing summary of the material terms of the Retention Program benefits payable to our executive officers does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the form of the retention letter agreement filed as Exhibit 10.4 to this Current Report on Form 8-K and incorporated herein by reference.
Item 5.03. Amendments to Articles of Incorporation or Bylaws.
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The foregoing description of the amendment to our amended and restated bylaws does not purport to be complete and is qualified in its entirety by reference to the text of the amendment of the amended and restated bylaws, which is attached as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On
On
The press release, investor presentation and conference call script contain statements intended as "forward-looking statements," which are subject to the cautionary statements about forward-looking statements set forth therein.
The information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, 99.2 and 99.3, is being furnished pursuant to Item 7.01, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to this item of this Current Report.
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding: expected timing, completion and effects of the proposed Merger, including listing on Nasdaq Global Market and estimated ownership percentages of the stockholders of each company; closing of Viracta's financing; Viracta's clinical development pipeline, including expected timing of the registration trial for EBV-associated lymphomas and the Phase 1b/2 trial in EBV-associated solid tumors; the combined company's expected cash forecast and runway into 2024; Viracta's ability to leverage its platform and pipeline to treat a range of cancers and diseases; and other statements that are not historical facts. Sunesis' expectations and beliefs regarding these matters may not materialize. Sunesis' actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks relating to the ability of the parties to consummate the proposed Merger, satisfaction of closing conditions precedent to the consummation of the proposed Merger, potential delays in consummating the Merger, and the ability of Sunesis to timely and successfully achieve the anticipated benefits of the Merger. Risks and uncertainties related to Viracta that may cause actual results to differ materially from those expressed or implied in any forward-looking statement include, but are not limited to: risks relating to the ability of the parties to consummate the proposed Merger and the concurrent financing, satisfaction of closing conditions precedent to the consummation of the proposed Merger and the concurrent financing, potential delays in consummating the Merger and the concurrent financing, and the ability of Viracta to timely and successfully achieve the anticipated benefits of the Merger and the concurrent financing; Viracta's ability to successfully enroll patients in and complete its ongoing and planned clinical trials; Viracta's plans to develop and commercialize its product candidates, including all oral combinations of nanatinostat and valganciclovir; the timing of initiation of Viracta's planned clinical trials; the timing of the availability of data from Viracta's clinical trials; previous preclinical and clinical results may not be predictive of future clinical results; the timing of any planned investigational new drug application or new drug application; Viracta's plans to research, develop and commercialize its current and future product candidates; the clinical utility, potential benefits and market acceptance of Viracta's product candidates; Viracta's ability to identify additional products or product candidates with significant commercial potential; developments and projections relating to Viracta's competitors and its industry; the impact of government laws and regulations; Viracta's ability to protect its intellectual property position; and Viracta's estimates regarding future expenses, capital requirements and need for additional financing following the proposed transaction.
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These risks and uncertainties may be amplified by the COVID-19 pandemic, which
has caused significant economic uncertainty. If any of these risks materialize
or underlying assumptions prove incorrect, actual results could differ
materially from the results implied by these forward-looking statements.
Additional risks and uncertainties that could cause actual outcomes and results
to differ materially from those contemplated by the forward-looking statements
are included under the caption "Risk Factors" and elsewhere in Sunesis' most
recent filings with the
The forward-looking statements included in this Current Report on Form 8-K are made only as of the date hereof. We assume no obligation and do not intend to update these forward-looking statements, except as required by law or applicable regulation.
Additional Information and Where to Find It
Sunesis plans to file with the
Participants in the Solicitation
The respective directors and executive officers of Sunesis and Viracta may be
deemed to be participants in the solicitation of proxies and written consents
from the security holders of Sunesis and Viracta, respectively, in connection
with the proposed Merger. Information regarding the interests of these directors
and executive officers in the transaction described herein will be included in
the proxy statement/prospectus described above. Additional information regarding
Sunesis' directors and executive officers is included in Sunesis' proxy
statement for our Annual Meeting of Stockholders, which was filed with the
No Offer or Solicitation
This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 2.1 Agreement and Plan of Merger and Reorganization, datedNovember 29, 2020 , by and amongSunesis Pharmaceuticals, Inc. ,Sol Merger Sub, Inc. andViracta Therapeutics, Inc. * 3.1 Amendment to Amended and Restated Bylaws ofSunesis Pharmaceuticals, Inc. 10.1 Form ofSunesis Pharmaceuticals, Inc. Support Agreement, datedNovember 29, 2020 . 10.2 Form ofViracta Therapeutics, Inc. Support Agreement, datedNovember 29, 2020 . 10.3 Form of Lock-Up Agreement, datedNovember 29, 2020 . 10.4 Form of Retention Benefits Letter betweenSunesis Pharmaceuticals, Inc. and certain officers. 99.1 Joint Press Release ofSunesis Pharmaceuticals, Inc. and ViractaTherapeutics, Inc. , datedNovember 30, 2020 . 99.2 Investor Presentation, datedNovember 30, 2020 . 99.3 Conference Call Script, datedNovember 30, 2020 .
* Schedules and exhibits to the Merger Agreement have been omitted pursuant to
Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit
will be furnished to the
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