8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  August 27, 2007

SUNESIS PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

000-51531	94-3295878
(Commission File No.)	(IRS Employer Identification No.)

341 Oyster Point Boulevard

South San Francisco, California 94080

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (650) 266-3500

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.05. Costs Associated with Exit or Disposal Activities.

On August 27, 2007, the Board of Directors of Sunesis Pharmaceuticals, Inc. committed to a restructuring plan that will result in an immediate reduction of approximately 25% of Sunesis’ workforce. Employees directly affected by the restructuring plan have received notification and will be provided with severance payments and outplacement assistance. The restructuring plan follows Sunesis’ announcement that it was undergoing a rigorous assessment of its portfolio and that its top priority is the advancement of its lead product candidate, SNS-595, for the treatment of acute myeloid leukemia and ovarian cancer. The restructuring is intended to reduce Sunesis’ operating expenses. Sunesis expects to complete the restructuring plan by the end of 2007.

As a result of the restructuring plan, Sunesis estimates that it will record a one-time restructuring charge in the third quarter of 2007 of between approximately $1.0-1.2 million for personnel costs and approximately $0.5-0.8 million for facilities-related and other costs. Sunesis estimates that the total amount of the restructuring charge will be between $1.5-2.0 million. The cash portion of this restructuring charge will be approximately $1.0-1.2 million. The majority of the severance payments will be paid out during the third quarter of 2007. The severance-related charge that Sunesis expects to incur in connection with the restructuring is subject to a number of assumptions, and actual results may materially differ. Sunesis may also incur other material charges not currently contemplated due to events that may occur as a result of, or associated with, the restructuring plan.

This report contains “forward-looking” statements, including but not limited to statements with respect to the expected timing for completion of the restructuring plan, the estimated restructuring charges to be incurred in the third quarter, the safety and potential efficacy of SNS-595 for the treatment of acute myeloid leukemia and ovarian cancer, the anticipated timing of the commencement and completion of clinical trials and the announcement of clinical results. Any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. 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, Sunesis' drug discovery and development activities could be halted or significantly delayed, Sunesis' clinical trials for SNS-595 may not demonstrate safety or efficacy or lead to regulatory approval, Sunesis' clinical trials for SNS-595 may not satisfy the requirements of the FDA or other regulatory agencies, risks related to the conduct of Sunesis' clinical trials and manufacturing of SNS-595,Sunesis may require substantial additional funding, which may not be available to Sunesis on acceptable terms, or at all, and Sunesis’ need to retain skilled employees and consultants and other risks detailed from time to time in Sunesis’ SEC reports, including its Annual Report on Form 10-K for the year ended December 31, 2006, its Quarterly Report on Form 10-Q for the quarter ended June 30, 2007, and other periodic filings with the SEC. Sunesis does not undertake any obligation to update forward-looking statements.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Exhibit Title
99.1	Press release, dated as of August 28, 2007, entitled “Sunesis Pharmaceuticals Announces Reorganization to Focus Resources and Build Value in Clinical-Stage Programs.”

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SUNESIS PHARMACEUTICALS, INC.
Dated: August 28, 2007
	By:	/s/ Eric H. Bjerkholt
		Eric H. Bjerkholt
		Senior Vice President, Corporate Development and Finance, Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Exhibit Title
99.1	Press release, dated as of August 28, 2007, entitled “Sunesis Pharmaceuticals Announces Reorganization to Focus Resources and Build Value in Clinical-Stage Programs.”

EX-99.1

Exhibit 99.1

Sunesis Pharmaceuticals Announces Reorganization to Focus Resources and Build Value in Clinical-Stage Programs

- Plan Extends Financial Resources Beyond 2008 -

SOUTH SAN FRANCISCO, Calif., Aug 28, 2007

Sunesis Pharmaceuticals, Inc. (Nasdaq: SNSS) today announced that it is reducing its workforce by approximately 25 percent, and implementing a revised operating plan that focuses its efforts on generating definitive data from its lead programs while streamlining the company's operations and extending its financial resources beyond 2008.

Based on a rigorous assessment of its product portfolio, Sunesis' top priority is the advancement of its lead product candidate, SNS-595, for the treatment of acute myeloid leukemia (AML). Having seen clinical activity and a favorable therapeutic profile in its ongoing Phase 1 single-agent clinical trial of SNS-595, Sunesis is working closely with its clinical and regulatory advisors to design a registration trial for the treatment of elderly AML patients which it plans to initiate by the end of 2008. Additionally, Sunesis will soon begin dosing patients in a Phase 1b clinical trial of relapsed AML patients, combining SNS-595 with cytarabine, the leading treatment standard.

In addition to its development activities in AML, over the next eighteen months Sunesis expects to continue to advance its ongoing studies of SNS-595 in ovarian cancer, SNS-032 in B-cell malignancies and SNS-314 in solid tumors.

Positive data from any of these studies could support registration strategies or one or more significant development-stage collaborations. Sunesis' refocused research team will continue to generate insights on the chemistry and biology of the company's product candidates that may inform and guide clinical trials, to advance novel, small molecule inhibitors into the company's early-stage pipeline and to support the company's current partnership.

In line with these portfolio decisions, Sunesis is reducing operating expenses primarily in the research and general & administrative areas. As part of the reorganization, the company is eliminating a total of 35 full-time employee positions, and will now have 108 employees. Sunesis expects that this realignment of personnel, operations and programs will reduce annual expenses by more than $10 million below its planned levels for the next several years.

"With the talent, focus and commitment of the Sunesis team, we have the opportunity to generate transforming clinical data in the coming quarters. By proactively undertaking the realignment, we can focus on the execution of our revised operating plan without needing to raise additional funds or entering into a corporate partnership in 2008," said Daniel Swisher, Chief Executive Officer and President of Sunesis. "The workforce reductions we're announcing today are difficult. We are deeply grateful for the dedication and contributions of the employees who will be leaving Sunesis and wish them the very best in all their future endeavors."

The company will be providing severance and career transition assistance to those employees directly affected by the restructuring. As a result of the restructuring plan, Sunesis estimates that it will record a one-time restructuring charge in the third quarter of 2007 of between approximately $1.0-1.2 million for personnel costs and approximately $0.5-0.8 million for facilities-related and other costs. Sunesis estimates that the total amount of the restructuring charge will be between $1.5-2.0 million. The cash portion of this restructuring charge will be approximately $1.0-1.2 million. As of June 30, 2007, Sunesis had cash, cash equivalents and marketable securities of $65.2 million. The company now anticipates that cash used in operating activities in 2007 will be less than $35 million, compared to original guidance estimates of approximately $40 million. Sunesis expects its 2008 cash used in operating activities to be at or below its 2007 level.

About Sunesis Pharmaceuticals

Sunesis is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel small molecule therapeutics for oncology and other serious diseases. Sunesis has built a broad product candidate portfolio through internal discovery and in-licensing of novel cancer therapeutics. Sunesis is advancing its product candidates through in-house research and development efforts and strategic collaborations with leading pharmaceutical and biopharmaceutical companies. For additional information on Sunesis Pharmaceuticals, please visit http://www.sunesis.com.

Safe Harbor Statement

This press release contains forward-looking statements including without limitation statements related to the safety and potential efficacy of SNS-595, SNS-032 and SNS-314, planned additional clinical testing and development efforts, the anticipated timing of the commencement and completion of clinical trials and the announcement of clinical results, whether any future trial will constitute a registration trial sufficient to support an application for regulatory approval, potential corporate partnerships or collaborations, plans to strategically invest in drug discovery efforts, ability to advance high-quality lead candidates into preclinical and clinical development, the estimated reduction in Sunesis' operating expenses, the estimated restructuring charges to be incurred in the third quarter, and Sunesis' ongoing cash requirements. Words such as "anticipates," "plans," "will," "optimistic," "is expected" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon Sunesis' current expectations. Forward-looking statements involve risks and uncertainties. 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, Sunesis' drug discovery and development activities could be halted or significantly delayed, Sunesis' clinical trials for SNS-595, SNS-032 and SNS-314 may not demonstrate safety or efficacy or lead to regulatory approval, Sunesis' preclinical studies and clinical trials may not satisfy the requirements of the FDA or other regulatory agencies, risks related to the conduct of Sunesis' clinical trials and manufacturing of SNS-595, SNS-032 and SNS-314, Sunesis may require substantial additional funding, which may not be available on acceptable terms, or at all, and Sunesis' need to retain skilled employees and consultants. These and other risk factors are discussed under "Risk Factors" and elsewhere in Sunesis' annual report on Form 10-K for the year ended December 31, 2006, Sunesis' quarterly report on Form 10-Q for the quarter ended June 30, 2007 and other filings with the Securities and Exchange Commission. Sunesis expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

http://www.sunesis.com