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): May 12, 2021

VIRACTA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-51531	94-3295878
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
2533 S Coast Hwy 101, Suite 210
Cardiff, California		92007
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (858) 400-8470

(Former name or former address, if changed since last report.)

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:

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

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

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

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.0001 par value	VIRX	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02. Financial Statements and Exhibits.

On May 12, 2021, Viracta Therapeutics, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended March 31, 2021. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

All of the information furnished in this Item 2.02 and the press release attached hereto as Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 8.01. Other Events.

In connection with the Company announcing its first quarterly financial results since completing the merger between Sunesis Pharmaceuticals Inc. and Viracta Therapeutics, Inc., the Company is providing disclosure regarding the business of the combined company. The disclosure is filed herewith as Exhibit 99.2, and such disclosure is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description
99.1	Press Release, dated May 12, 2021
99.2	Business Section of Viracta Therapeutics, Inc.

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.

Dated: May 12, 2021

/s/ Daniel Chevallard

Daniel Chevallard

Chief Operating Officer and Chief Financial Officer

EX-99.1

Exhibit 99.1

Viracta Therapeutics Reports First Quarter 2021 Financial Results and Provides Clinical and Corporate Updates

NAVAL-1, a global pivotal trial for the treatment of relapsed/refractory EBV-positive lymphoma is on track to be initiated in Q2 2021

NAVAL-1 trial design to be featured in a Key Opinion Leader webinar taking place on May 20, 2021

Closed merger with Sunesis Pharmaceuticals and $65 million private placement

Cash and cash equivalents of approximately $129.2 million as of March 31, 2021

PR Newswire, San Diego, May 12, 2021 – Viracta Therapeutics, Inc. (Viracta or the Company), a precision oncology company targeting virus-associated malignancies, today announced financial results for the first quarter of 2021 and provided a clinical and corporate update.

“Viracta has emerged from our first quarter as a publicly traded company well-positioned to make a significant impact on patients and create meaningful value for our shareholders. We are on track to initiate our pivotal NAVAL-1 trial as planned this quarter for the treatment of EBV-associated lymphoma, and we look forward to expanding into our second global clinical program in EBV-associated solid tumors in the second half of 2021,” said Ivor Royston, M.D., President and Chief Executive Officer of Viracta.

Dr. Royston continued, “Today, we are excited to provide additional details of the NAVAL-1 trial design, which has been reviewed by the United States Food and Drug Administration. We believe the innovative and adaptive design of this registration-enabling pivotal trial will allow us to simultaneously progress towards potential NDA filings in multiple lymphoma subtypes.”

First Quarter 2021 and Recent Highlights

Clinical

• Announced design of NAVAL-1, a global pivotal trial in Epstein-Barr virus (EBV)-positive relapsed/refractory (R/R) lymphoma. NAVAL-1 (Nanatinostat in Combination with Valganciclovir) is a multinational, multicenter, open-label Phase 2 basket trial. The trial, which will include multiple subtype-specific cohorts of R/R EBV-positive lymphoma patients, is designed to evaluate the anti-tumor activity of the combination treatment of nanatinostat with valganciclovir and is anticipated to enroll up to 140 patients. The primary endpoint of the trial is objective tumor response rate as assessed by an independent review committee. If successful, Viracta believes this trial could support multiple NDA filings across various EBV-positive lymphoma subtypes. Viracta remains on track to initiate NAVAL-1 in Q2 2021.

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• Completed enrollment in Phase 2 expansion cohort of its Phase 1b/2 R/R EBV-positive lymphoma trial, with updated data expected in H2 2021. VT3996-201, Viracta’s Phase 1b/2 open-label, dose escalation/expansion trial of nanatinostat-valganciclovir combination treatment in R/R EBV-positive lymphoma has generated promising efficacy and safety data to date, as presented at the 62^nd American Society of Hematology Annual Meeting in December 2020, including preliminary objective response and complete response rates (ORR/CR) of 80%/40% (n=10) and 67%/33% (n=6) in T/NK cell non-Hodgkin’s lymphoma and diffuse large B-cell lymphoma, respectively. The median duration of response was 10.4 months.

Corporate

• Closed merger with Sunesis Pharmaceuticals, Inc. Shares of the combined company, Viracta Therapeutics, Inc., commenced trading on the Nasdaq Global Select Market under the ticker symbol “VIRX” on February 25, 2021.

• Completed a $65 million private placement. On February 24, 2021, Viracta closed a private financing featuring a premier investor syndicate of biotechnology-focused and institutional accredited investors.

• Strengthened balance sheet through a multi-license milestone and royalty monetization transaction with XOMA. In March 2021, Viracta announced that XOMA had purchased the potential future milestones and royalties associated with existing licenses relating to two clinical-stage drug candidates that Viracta obtained in the merger in exchange for an upfront payment of $13.5 million and up to $20 million in a pre-commercialization, event-based milestone. In the merger, Viracta also obtained exclusive and global rights to assets previously held by Sunesis including SNS-510, a PDK-1 inhibitor, and vecabrutinib, a BTK inhibitor. Viracta is evaluating future development and collaboration opportunities for SNS-510 and potential partnering opportunities for vecabrutinib.

• Extended intellectual property protection around lead lymphoma program. In March 2021, the U.S. Patent and Trademark Office (USPTO) granted patent 10,953,011, which covers the anticipated dose regimen to be advanced in the NAVAL-1 trial. The patent provides Viracta with intellectual property protection into at least 2040.

• Strengthened company leadership with new appointments to the Board of Directors and management team. Throughout the first quarter, Viracta appointed the following life sciences industry veterans to the Board of Directors: Stephen Rubino, Ph.D., MBA, and Barry J. Simon, M.D., who were each appointed following the closing of the merger, Thomas Darcy, who was appointed in connection with the closing of the merger, and Nicole Onetto, M.D., who remained on the combined company’s Board of Directors following the merger. The Company also appointed Cheryl A. Madsen, RAC as Senior Vice President, Regulatory Affairs.

Anticipated 2021 Milestones

• Initiation of NAVAL-1, a global Phase 2 pivotal trial for R/R EBV-positive lymphoma: Q2 2021

• Clearance of IND for a Phase 1b/2 clinical trial in EBV-positive solid tumors: mid-2021

• Initiation of a global Phase 1b/2 clinical trial in EBV-positive solid tumors: H2 2021

• Updated data from Phase 1b/2 trial in R/R EBV-positive lymphoma (VT3996-201): H2 2021

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First Quarter 2021 Financial Results

• Cash Position – Cash and cash equivalents totaled approximately $129.2 million as of March 31, 2021. Viracta expects to end 2021 with greater than $100 million in cash and cash equivalents, which it expects will be sufficient to fund its operations into 2024.

• Research and Development Expenses – Research and development expenses were $4.0 million for the quarter ending March 31, 2021, compared to $3.4 million for the same period in 2020. This increase was primarily due to costs incurred to support study initiation activities for NAVAL-1, in addition to an increase in headcount and non-cash share-based compensation.

• General and Administrative Expenses – General and administrative expenses were $3.8 million for the quarter ending March 31, 2021, compared to $1.0 million for the same period in 2020. This increase was primarily due to non-recurring, merger-related costs of approximately $2.0 million incurred in the period, in addition to incremental costs associated with being a publicly traded company and non-cash share-based compensation.

• Acquired in-process research and development – Non-recurring, non-cash operating expenses of $84.5 million associated with the write-off of in-process research and development acquired in the merger were recorded for the quarter ending March 31, 2021.

• Gain on Royalty Purchase Agreement – Gain on Royalty Purchase Agreement for the quarter ended March 31, 2021 was associated with upfront proceeds of $13.5 million received in connection with the multi-license milestone and royalty monetization transaction with XOMA Corporation in March 2021.

• Adjusted income or loss from operations – Adjusted income from operations for the quarter ended March 31, 2021, excluding the non-recurring and non-cash operating expenses associated with the write-off of in-process research and development acquired in the merger (a non-GAAP measure) was $5.6 million, compared to an unadjusted loss from operations of $78.8 million. There is not a comparative adjustment to loss from operations for the same period in 2020.

• Net loss – Net loss was $79.2 million, or $5.22 per share (basic and diluted) for quarter ended March 31, 2021, compared to $4.4 million, or $1.86 per share (basic and diluted), for the same period in 2020.

Key Opinion Leader Webinar

The design of NAVAL-1, a global pivotal trial in EBV-positive R/R lymphoma will be discussed during a Key Opinion Leader webinar on May 20, 2021 at 2pm EST. The webinar will feature presentations by Pierluigi Porcu, M.D. (Thomas Jefferson University) and Kristen Cunanan, Ph.D. (Stanford University School of Medicine), who will discuss the current treatment landscape, unmet medical need in EBV-associated lymphoma and the trial design of NAVAL-1. The formal presentations will then be followed by a Q&A session with Drs. Porcu and Cunanan, accompanied by Company management. A link to register for the webcast is here: https://media.rampard.com/202105203/

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About NAVAL-1

NAVAL-1 (Nanatinostat in Combination with Valganciclovir) is a registration-enabling multinational, multicenter, open-label Phase 2 basket trial. The trial will include multiple subtype-specific with various EBV-positive relapsed/refractory lymphoma and is anticipated to enroll up to 140 patients. The primary endpoint of the trial is objective tumor response rate, while secondary endpoints include duration of response, survival outcomes, and the safety profile of the combined treatment. Trial eligibility includes patients with EBV-positive R/R lymphoma following two or more prior systemic therapies with no available standard therapies. For ENKTL patients only, eligibility includes patients with R/R disease following one or more prior systemic therapies with no available standard therapies who have failed an asparaginase-containing regimen.

About Viracta Therapeutics, Inc.

Viracta is a precision oncology company targeting virus-associated malignancies. Viracta’s proprietary investigational drug, nanatinostat, is currently being evaluated in combination with the antiviral agent valganciclovir as an oral combination therapy in a Phase 2 clinical trial for EBV-positive lymphoma. Viracta is pursuing application of this inducible synthetic lethality approach in other EBV-associated malignancies, such as nasopharyngeal carcinoma, gastric carcinoma, and other virus-related cancers.

For additional information please visit www.viracta.com.

Forward Looking Statements

This communication contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding: being on track for initiation and the details and timeline for the NAVAL-1 trial and the EBV-associated solid tumor trial and related expectations; the ability of Viracta to simultaneously advance multiple NDA filings from the NAVAL-1 trial; the timing of the clearance of the IND for the solid tumor trial and the updated date from the ongoing Phase1b/2 trial; the sufficiency of the Company’s cash and cash equivalents to fund operations into 2024; Viracta’s ability to value for its shareholders; and other statements that are not historical facts. 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: 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 in the future.

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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 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 Viracta’s reports and other documents that Viracta has filed, or will file, with the SEC from time to time and available at www.sec.gov.

The forward-looking statements included in this communication are made only as of the date hereof. Viracta assumes no obligation and does not intend to update these forward-looking statements, except as required by law or applicable regulation.

Use of Non-GAAP Financial Measures

In addition to our results reported in accordance with U.S. generally accepted accounting principles (“GAAP”), we believe certain non-GAAP, or adjusted, measures are useful in evaluating our operating performance. We use adjusted financial measures to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that adjusted financial measures, when taken collectively, may be helpful to investors because they can provide consistency and comparability with past financial performance. However, adjusted financial information has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. In particular, other companies, including companies in our industry, may calculate similarly titled non-GAAP or adjusted measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our adjusted financial measures as tools for comparison. A reconciliation is provided below for adjusted financial measures to the most directly comparable financial measure stated in accordance with U.S. GAAP. Investors are cautioned that there are a number of limitations associated with the use of non-GAAP, or adjusted, financial measures as analytical tools. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliation of these adjusted financial measures to their most directly comparable U.S. GAAP financial measure, and not to rely on any single financial measure to evaluate our business.

Investor Relations Contact:	Company Contact:
Joyce Allaire	Dan Chevallard
LifeSci Advisors	Chief Operating Officer and Chief Financial Officer
jallaire@lifesciadvisors.com	dchevallard@viracta.com
(212) 915-2569	(858) 771-4193

SOURCE Viracta Therapeutics, Inc.

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Viracta Therapeutics, Inc.

Selected Balance Sheet Highlights

(in thousands)

	March 31,		December 31,
	2021		2020
	(Unaudited)
Cash and cash equivalents	$	129,181	$	47,089
Total assets	$	136,209	$	48,305
Total liabilities	$	11,465	$	11,203
Stockholders’ equity	$	124,744	$	(46,200	)

Viracta Therapeutics, Inc.

Condensed Consolidated Statement of Operations and Comprehensive Loss

(in thousands except share and per share data)

(Unaudited)

	Three Months Ended March 31,
	2021			2020
Operating expenses:
Research and development	$	4,024		$	3,446
Acquired in-process research and development		84,478			—
General and administrative		3,840			1,011
Total operating expenses		92,342			4,457
Gain on Royalty Purchase Agreement		13,500			—
Loss from operations		(78,842	)		(4,457	)
Total other (expense) income		(389	)		40
Net loss and comprehensive loss	$	(79,231	)	$	(4,417	)
Net loss per share, basic and diluted	$	(5.22	)	$	(1.86	)
Weighted-average common shares outstanding, basic and diluted		15,166,737			2,373,560

Viracta Therapeutics, Inc.

Reconciliation of GAAP Loss from Operations to Adjusted Income (Loss) from Operations

(in thousands)

(Unaudited)

	Three Months Ended March 31,
	2021			2020
Loss from operations	$	(78,842	)	$	(4,457	)
Less: Acquired in-process research and development		84,478			—
Adjusted income (loss) from operations	$	5,636		$	(4,457	)

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EX-99.2

Exhibit 99.2

DESCRIPTION OF VIRACTA’S BUSINESS

Overview

Viracta Therapeutics, Inc. (“Viracta”) is a clinical-stage, precision oncology company focused on advancing new medicines for the treatment of virus-associated malignancies. The association of viruses and cancer has been well characterized, and Viracta’s lead program is focused on cancers associated with the Epstein-Barr virus (“EBV”). EBV has been recognized as a Group 1 human carcinogen by the World Health Organization. Despite the association of EBV with cancer, attempts to develop vaccines have not proven successful. EBV enters periods of latency during which most viral genes are epigenetically suppressed, which allows an infected cell to not be killed by the virus should it enter a lytic replication cycle. Likewise, the latently infected cell can evade the body’s immune surveillance mechanisms. In some stages of latency, no viral proteins are expressed on the cell surface, making it difficult to develop broadly effective immunotherapies. There are over 300,000 new cases of EBV-associated cancers each year with regard to lymphoma, nasopharyngeal carcinoma (“NPC”) and gastric carcinoma (“GC”), and there are currently no approved therapies for these cancers, which are responsible for over 180,000 deaths each year. Viracta’s novel synthetic lethality approach targets the EBV genome to enable the killing of the tumor cells by inducing the expression of certain viral kinase genes which in-turn activate an antiviral drug. The activated antiviral drug disrupts the DNA replication cycle of the target cells resulting in chain termination and killing of the tumor cells by inducing apoptosis, also known as programmed cell death. This synthetic lethality approach may also be applicable to other cancers associated with the herpes family of viruses, to which EBV belongs, such as glioblastoma associated with cytomegalovirus (“CMV”), Kaposi’s sarcoma with Kapois’s sarcoma virus (“KSV”), and gastrointestinal carcinomas with Human Herpesvirus 6 (“HHV6”).

Viracta’s lead product candidate is an all-oral combination of nanatinostat, Viracta’s proprietary investigational drug, and valganciclovir. Viracta has recently completed enrollment in the Phase 2 portion of its ongoing Phase 1b/2 clinical trial for the treatment of EBV⁺ lymphoma and expects updated data from this trial in the second half of 2021. Viracta also plans to initiate its global pivotal trial in the second quarter of 2021. In addition, Viracta expects the clearance of a U.S. Investigational New Drug application for the treatment of EBV-associated solid tumors in mid-2021 and expects to initiate a global Phase 1b/2 clinical trial the second half of 2021. Viracta has received Fast Track Designation by the U.S. Food and Drug Administration (the “FDA”) for the treatment of relapsed or refractory EBV⁺ lymphoid malignancies, in addition to orphan drug designations for the treatment of post-transplant lymphoproliferative disorders (“PTLD”), plasmablastic lymphoma, and T-cell lymphomas.

The Viracta team possesses deep, cross-functional experience and longstanding commitment to developing new medicines to benefit patients. Collectively, the Viracta management team has extensive industry experience in both private and publicly-traded companies, having co-founded companies, such as Hybritech, Inc. and IDEC Corporation, raised substantial debt and equity capital, and discovered and developed oncology treatments at companies such as Novartis, Janssen and MorphoSys.

Strategy

Viracta’s strategy is to build a leading precision oncology company focused on virus-associated malignancies. While the association between viruses and cancer has been well characterized, there are currently no approved therapies that specifically target virus-harboring cancer cells. Viracta’s lead program targets an area of high unmet medical need with no approved therapies. Viracta’s current pipeline is derived from its ability to leverage its synthetic lethality and biomarker-driven approach. Viracta prioritizes virus-associated targets that it believes have the potential to change the paradigm of treatment in virus-associated cancers.

Key elements of Viracta’s strategy are as follows:

• Rapidly advance Viracta’s lead product candidate, nanatinostat in combination with valganciclovir , through clinical development, initially in EBV⁺ lymphomas;

• Expand development of nanatinostat in combination with valganciclovir or variants thereof in other EBV⁺ malignancies, beginning with solid tumors harboring the EBV genome;

• Leverage its synthetic lethality approach and evaluate other malignancies associated with other viruses in the herpes family;

• Evaluate opportunities to combine nanatinostat in combination with valganciclovir or nanatinostat alone with other therapeutic modalities; and

• Evaluate other opportunities to expand Viracta’s pipeline through licensing, acquisitions and/or partnerships.

Pipeline

The following figure summarizes Viracta’s current development programs:

Figure 1: Viracta’s Development Pipeline

Scientific Background

Overview of Virus-associated Malignancies

The association of viruses and cancer has been well characterized. Despite knowing of EBV’s association with cancer for over half a century, attempts to develop vaccines have not proven successful. The figure below illustrates the association of a number of viruses with various cancers.

Figure 2: Viral Infection and Cancer

EBV, a member of the g-herpesvirus family, was the first virus directly implicated in the development of a human tumor and is formally classified as a Group 1 human carcinogen by the WHO. Primary infection with EBV typically occurs in childhood, occurring first in the nasopharynx and is generally asymptomatic; however, infection later in life may manifest as infectious mononucleosis. Once infected, individuals remain life-long carriers of the virus, with more than 90% of the world’s population asymptomatically infected with EBV. The EBV genome can be detected in approximately one out of one million circulating B lymphocytes.

EBV Latency

EBV enters periods of latency during which most viral genes are epigenetically suppressed, as depicted in the figure below. In some stages, no viral proteins are expressed on the cell surface, making it difficult to develop broadly effective immunotherapies.

Figure 3: EBV Latency in Cells

Latent infection and intermittent reactivation are two important characteristics of the EBV lifecycle. The maintenance of latent EBV infection requires the expression of a small subset of genes, and specific expression patterns (Types I – III) of these genes are associated with specific EBV-driven malignancies. EBV has been shown to infect B-cells, T-cells, T/NK-cells and epithelial cells, though its greatest predilection is for B-cells. EBV has been associated with a wide spectrum of human malignancies, with B-cell lymphomas being the most common, and include EBV⁺ diffuse large B cell lymphoma, not otherwise specified (“EBV⁺ DLBCL, NOS”), Burkitt’s lymphoma (“BL”), PTLD, and lymphomas associated with congenital and acquired immunodeficiencies, including HIV-related lymphomas.

Mechanism of Action of Nanatinostat in Combination with Valganciclovir

Viracta’s lead product candidate utilizes a combination of Viracta’s oral proprietary epigenetic drug, nanatinostat, in combination with the oral antiviral drug valganciclovir. Nanatinostat targets the EBV genome and induces the expression of certain viral kinase genes. Valganciclovir is converted to ganciclovir in the gut, and these viral genes then activate ganciclovir, which disrupts the DNA replication cycle, leading to DNA chain termination and killing of the tumor cells by inducing apoptosis. This type of killing can be considered a form of synthetic lethality, where neither drug alone would be as effective in killing the tumor cells, but together the two drugs are lethal to the tumor cells.

Epigenetic Re-Programming

EBV gene products can drive aberrant cell proliferation, inhibit programmed cell death and other mechanisms that promote formation of cancer. Viruses and cancers have also evolved mechanisms to evade immune detection by up-regulating immunosuppressive signals, including the induction of PD-L1. Due to these pleiotropic effects, so-called molecularly targeted approaches that target only one oncogenic activity have shown limited ability to impact these cancers.

Epigenetics refers to mechanisms that control which genes or gene programs are turned on or which ones are silenced. Chemical modification of gene promoter regions via methylation, or acetylation or deacetylation of histones around which DNA is coiled, are major mechanisms by which gene expression is controlled.

EBV-Associated Lymphomas

EBV-associated lymphomas are a heterogeneous group of malignancies that harbor latent EBV within the tumor cells. Within a specific histologic subtype of lymphoma, the frequency of EBV positivity may vary considerably. EBV is associated with approximately 5% of DLBCL in Western countries and approximately 10%-15% in Asia and South America, whereas approximately 30% of peripheral T cell lymphoma (“PTCL”) and HL within North America are EBV⁺, and endemic BL are EBV⁺ in approximately 95% of the cases. The risk for developing an EBV⁺ lymphoma has been observed to be higher in the setting of immunodeficiency, including in patients with HIV, congenital immunodeficiencies and post-transplant immunosuppression. EBV-related lymphomas express a limited number of viral genes, with latency expression patterns associated with specific lymphoma subtypes. The limited expression of EBV genes may allow for persistence of the viral DNA in cells by restricting the visibility of the virus to the immune system. The observation that lymphomas in patients with impaired immune function are more likely to express a greater number of viral genes is supportive of this concept. EBV-related lymphoproliferative disease in immunosuppressed patients may respond to therapies that improve immune function, such as reduced immunosuppression (e.g., transplant patients) or adoptive immunotherapy. In contrast, EBV-related lymphomas that arise in immunocompetent patients generally express fewer viral genes and proteins, and as a result are less prone to immune attack.

While outcomes vary based on the specific malignancy, EBV-associated lymphomas (e.g., DLBCL, HL, BL, and a number of T-cell lymphomas) often present a treatment challenge as clinical outcomes such as progression free survival and overall survival are worse following standard of care regimens as compared to those for EBV-negative patients. The presence of EBV in lymphomas is therefore generally considered to be a poor prognostic indicator. As shown in the figure below, across a series of patients with DLBCL, those who were EBV⁺ generally presented with more aggressive disease, had lower response rates to first-line therapy, and poorer progression free survival and overall survival. In a meta-analysis evaluating survival outcomes across several lymphoma types (HL, DLBCL, T/NKCL, PTCL), EBV⁺ disease was associated with significantly worse overall survival.

Figure 4: Outcomes in EBV-negative vs EBV⁺ Lymphomas

Source: Lu TX, et al. Sci Rep 5,12168, 2015; Haverkos BM et al. Int J Cancer. 2017

EBV-positivity in tumor cells can be detected using in situ hybridization for EBV-encoded RNA (EBER-ISH). This is a clinical laboratory test that detects the presence of EBV in the cancer cell. This test is currently most often used to assist in the diagnosis of lymphoma subtypes. Because there has been a lack of actionable targeted therapies in past, EBER-ISH has not been routinely used to guide course of treatment.

Histopathological detection of EBV is included in the NCCN guidelines, which comment on the importance of determining EBV positivity utilizing either EBER-ISH and/or LMP-1 immunohistochemistry (“IHC”) in B and T cell lymphomas. Additionally, protocols established by the American College of Pathology for both Hodgkin and non-Hodgkin lymphoma include determination of EBV status. These laboratory developed tests are widely available in pathology labs, however the frequency at which the testing is performed varies by treatment center and disease type and is lower in community treatment centers compared to academic institutions. This is likely primarily due to the absence of an available EBV targeted therapy, which impacts the evaluation of treatment options for these patients.

Several antiviral drugs have been tested in the clinic against EBV-related lymphomas but have not shown activity as single agent treatments. Antivirals that are prodrugs, such as ganciclovir, acyclovir and valganciclovir (an oral prodrug of ganciclovir) are specific for the viral kinases and not the cellular kinases, and, therefore, require the presence of functional viral kinases, such as thymidine kinase (TK) and protein kinase (PK) for activation and are ineffective at eliminating EBV-associated tumors because these kinase enzymes are not being produced in the latent state. To overcome this barrier, Viracta utilizes its proprietary epigenetic drug candidate, nanatinostat, to induce the expression of these viral kinase genes. Once induced, the viral kinases will phosphorylate and activate the the antiviral prodrug in the tumor cell, resulting in the killing of the tumor cell. Viracta has determined that for EBV-associated malignancies, oral valganciclovir, which is converted to ganciclovir in the gut, is its preferred antiviral drug.

Nanatinostat belongs to a class of drugs known as histone deacetylase (“HDAC”) inhibitors. HDAC inhibitors have been explored in the past, at high doses, as anti-tumor tumor agents. They were shown to have, in general, limited activity and in general, the efficacy they did exhibit was compromised by their adverse event profile. Nanatinostat is a highly potent class I HDAC inhibitor, specifically targeting those few HDAC isozymes required for silencing of EBV in tumors. In contrast to the way in which other HDAC inhibitors have been tested in oncology, Viracta has used nanatinostat at low, epigenetically-active doses to re-activate the latent EBV gene expression, thereby lowering and in some instances, avoiding, certain issues common to all other HDAC inhibitors.

HDAC Enzymes and Inhibitors

Currently, 18 HDAC enzymes have been identified in mammalian cells, varying in function, localization, and substrates. They are subdivided into four main classes based on homology to yeast proteins. Three of the four classes (Classes I, II, and IV) are zinc (Zn2+) dependent enzymes and are inhibited by the pan-HDAC inhibitors.

Epigenetic modulation of gene expression is an essential biological process, with chromatin structure and gene transcription tightly regulated by the acetylation state of histones in the nucleosome. Histone acetylation is a balance of the actions of histone acetyltransferases (“HATs”) and HDACs, with acetylation of histones generally associated with induction of gene transcription and deacetylation with decreases in transcription. Though a seemingly simple concept, it belies the complexity of the effects of HDAC inhibition on chromatin structure. Exposure to HDAC inhibitors rapidly leads to compensating changes in histone methylation and changes in expression of histone modulators. In tumor cells, the most commonly reported effects of HDAC inhibitors relate to induction of apoptosis, though they have also been shown to interfere with cell growth and differentiation and inhibit angiogenesis. In addition, HDAC inhibitors have been shown to modulate immune responses which, in turn, affect many diverse cellular functions.

To date, more than 15 HDAC inhibitors have been tested in preclinical and clinical studies. HDAC inhibitors are broadly classified into four main groups based on their structure: hydroxamic acids, cyclic peptides/depsipeptides, benzamides, and short-chain fatty acids. A common mechanism of action of these drugs is to bind a critical Zn2+ ion required for catalytic function of the HDAC enzyme.

Several HDAC inhibitors have demonstrated clinical antitumor activity when dosed at or near the maximum tolerated dose, with four currently approved by the FDA for oncology indications. These are vorinostat for the treatment of cutaneous T cell lymphoma, romidepsin for the treatment of cutaneous T-cell lymphoma, belinostat for the treatment of peripheral T-cell lymphoma, and panobinostat for the treatment of multiple myeloma. Common side effects seen with these HDAC inhibitors include thrombocytopenia, neutropenia, anemia, fatigue and diarrhea. While HDAC inhibitors have displayed some antitumor activity as single agents, data suggest that the HDAC inhibitors may have a greater role as part of combination regimens.

Rationale for the Combination of HDAC Inhibitors and Antivirals for the Treatment of EBV-Associated Lymphomas

Induction of the viral enzymes TK and PK within EBV⁺ lymphomas results in the sensitization of tumor cells to antiviral agents such as ganciclovir. This approach is also predicted to have high tumor specificity as only EBV-containing replicating cells would be targeted and neighboring EBV-negative non-replicating cells would be unaffected. The potential for this approach was initially demonstrated in a patient who had developed an EBV⁺ immunoblastic lymphoma in a donor lung four months after transplantation. Based on previous work that had shown that butyrate congeners could induce EBV lytic phase genes (including viral TK13,14) a cell line derived from the patient’s tumor was exposed to arginine butyrate, a pan-HDAC inhibitor, which induced EBV TK transcription and in combination with ganciclovir inhibited cell proliferation and resulted in cell death. Arginine butyrate was added to the patient’s existing treatment with ganciclovir with no apparent additional toxicity. Though the patient succumbed to a systemic Aspergillus infection that had preceded arginine butyrate therapy, subsequent pathologic examination of the tumor showed substantial necrosis compared to pre-therapy histology. However, a definitive causal relationship between arginine butyrate/ganciclovir therapy and antitumor effect was confounded by prior treatment with chemotherapy.

Additional clinical support was demonstrated in a Phase 1/2 investigator sponsored trial that combined the HDAC inhibitor arginine butyrate with intravenous ganciclovir in 15 patients with recurrent EBV⁺ lymphomas. Arginine butyrate was administered as a continuous intravenous infusion daily on an escalating dose schedule within each patient for 21 days of a 28-day treatment course, combined with a fixed daily dose of ganciclovir that was not interrupted. Eleven patients received at least one full cycle of therapy, and all 15 patients were evaluable for response. Antitumor activity was reported in 10 patients, with 4 complete responses and 6 partial responses.

Development Programs

Viracta’s Combination Approach

The use of nanatinostat in combination with valganciclovir is a novel therapeutic approach to target EBV⁺ malignancies, using a low-dose of Viracta’s oral proprietary epigenetic drug, nanatinostat, to target the EBV genome and induce the expression of certain viral kinase genes. These viral genes then activate the antiviral prodrug, valganciclovir, which is converted to ganciclovir in the gut, and disrupts the DNA replication cycle. This disruption then leads to chain termination and killing of the tumor cells by inducing apoptosis. This type of killing can be considered a form of synthetic lethality, where neither drug alone would be as effective in killing the tumor cells, but together the two drugs are lethal to the tumor cells.

Nanatinostat is a hydroxamic acid-based Class 1 HDAC inhibitor and is a more than 2,000 times more potent inducer of the latent EBV genes targeted by this approach than arginine butyrate, the first generation HDAC inhibitor previously investigated in an academic setting. Additionally, the class specificity of nanatinostat is critical for both the targeted efficacy and safety of the approach. As a class, HDACs control the acetylation status of a range of histone and non-histone proteins, giving these enzymes a key role in a number of vital cellular processes. HDAC inhibition alters gene expression at many levels, including gene transcription, RNA expression, and signal transduction pathways. Cellular effects include control of the cell cycle, cell differentiation and senescence, inflammation, angiogenesis and apoptosis. Nanatinostat has demonstrated pleiotropic activity both in vitro and in vivo across a range of human cancers in preclinical studies.

The initial clinical trial of nanatinostat was a single-agent Phase 1 clinical trial, wherein nanatinostat was administered as a single-agent at oral doses ranging from 5 to 160 mg daily in 39 patients with refractory solid tumors. The maximum tolerated dose (“MTD”) for once daily continuous dosing of nanatinostat as a single agent was established as 80 mg, with a maximum acceptable dose for once daily continuous dosing of 40 mg. This program was beneficial in establishing the initial safety profile and tolerability of nanatinostat before it was acquired by Viracta for the development of nanatinostat in combination with valganciclovir.

Nanatinostat induces the expression of EBV kinase genes to activate ganciclovir, rather than acting directly as a cytotoxic agent. In clinical trials, nanatinostat has been active below the MTD and has been observed to be non-immunosuppressive. In 46 patients with R/R EBV⁺ lymphomas in the ongoing Phase 1b/2 trial, the recommended Phase 2 dose regimen of nanatinostat 20 mg p.o. daily for four days/week, i.e., 4 days on, 3 days off, with valganciclovir 900 mg p.o. daily has been generally well-tolerated with the most common grade 3/4 adverse events being reversible cytopenias.

Nanatinostat in Combination with Valganciclovir in Relapsed/Refractory EBV⁺ Lymphoma

Phase 1b/2 Clinical Trial in Relapsed/Refractory EBV⁺ Lymphomas

In 2018, Viracta initiated a Phase 1b/2 dose escalation and expansion trial to evaluate the safety and preliminary efficacy and define a recommended Phase 2 dose (RP2D) of nanatinostat in combination with valganciclovir in patients with relapsed/refractory EBV+ lymphomas who had received one or more prior therapies.

The trial is being conducted at approximately 20 centers in the US and 6 centers in Brazil.

Figure 5: Design of Phase 1b/2 Trial in R/R EBV⁺ Lymphomas

Twenty-five patients were enrolled in the Phase 1b portion of the trial, and the RP2D was determined to be nanatinostat 20 mg p.o. daily for four days/week, i.e., 4 days on, 3 days off, with valganciclovir 900 mg p.o. daily. In December 2020, the initial results were presented from the Phase 2 portion of the trial, which showed that nanatinostat in combination with valganciclovir demonstrated encouraging efficacy in multiple subtypes, including in HDAC inhibitor-refractory disease.

Figure 6: Summary of Efficacy per Subtype in Phase 1b/2 Trial in R/R EBV⁺ Lymphomas, Presented at ASH 2020

* CR: complete response; PR: partial response; PD: progressive disease; ORR: objective response rate: B-NHL: B-cell non-Hodgkin lymphomas; DLBCL: diffuse large B-cell lymphoma; T-NHL: T-cell non-Hodgkin lymphomas; ENKTL: extranodal NK/T cell lymphoma; PTCL, NOS: peripheral T-cell lymphoma not otherwise specified; AITL: angioimmunoblastic T-cell lymphoma; CTCL: cutaneous T-cell lymphoma; IA-LPD: Immunodeficiency-associated lymphoproliferative disorder; PTLD: post-transplant lymphoproliferative disorder; SLE: systemic lupus erythematosus; CVID: common variable immunodeficiency disorder; PI: primary immunodeficiency; PBL: Plasmablastic lymphoma; HL: Hodgkins lymphoma.

In 46 patients evaluable for safety, the RP2D was generally well-tolerated with the most common grade 3/4 adverse events being reversible cytopenias. Serious adverse events (SAEs) occurred in 14 patients (30%); six in the Phase 2 cohort. SAEs occurring in ³2 patients were febrile neutropenia and pneumonia (both n=2). No study drug related deaths occurred in the treatment period.

Figure 7: Grade 3/4 Treatment-emergent AEs in ³2 Patients from the Phase 1b/2 Trial in R/R EBV⁺ Lymphomas Data Presented at ASH 2020

	Overall (n=46)			Phase 2 (n=21)
	All	G3	G4	All	G3	G4
Thrombocytopenia	18 (39%)	6 (13%)	5 (11%)	5 (24%)	1 (5%)	2 (10%)
Nausea	17 (37%)	2 (4%)	—	7 (33%)	2 (10%)	—
Neutropenia	15 (33%)	4 (9%)	9 (20%)	6 (29%)	2 (10%)	4 (19%)
Anemia	14 (30%)	9 (20%)	1 (2%)	5 (24%)	4 (19%)	1 (5%)
Lymphopenia	10 (22%)	4 (9%)	4 (9%)	4 (19%)	2 (10%)	1 (5%)
Leukopenia	9 (20%)	2 (4%)	3 (7%)	4 (19%)	1 (5%)	1 (5%)
Acute kidney injury	6 (13%)	2 (4%)	2 (4%)	1 (5%)	—	1 (5%)
Febrile neutropenia	5 (11%)	4 (9%)	1 (2%)	3 (14%)	2 (10%)	1 (5%)
Hypokalemia	5 (11%)	2 (4%)	—	3 (14%)	1 (5%)	—
Urinary tract infection	5 (11%)	2 (4%)	—	2 (10%)	1 (5%)	—
Hypertension	3 (7%)	2 (4%)	—	—	—	—
Pneumonia	3 (7%)	1 (2%)	1 (2%)	2 (10%)	1 (5%)	—

Pivotal Trial of Nanatinostat in Combination with Valganciclovir in Relapsed/refractory EBV⁺ Lymphomas

Viracta plans to initiate NAVAL-1 (Nanatinostat in Combination with Valganciclovir), a multinational, multicenter, open-label Phase 2 basket design trial. The trial will include multiple subtype-specific cohorts of R/R EBV⁺ lymphoma patients designed to evaluate the anti-tumor activity of the combination treatment of nanatinostat with valganciclovir and is anticipated to enroll up to 140 patients. The primary endpoint of the trial is objective tumor response rate as assessed by an independent review committee, while secondary endpoints include duration of response, survival outcomes, and the safety profile of the combined treatment. If successful, Viracta believes this trial could support multiple U.S. New Drug Application filings across various EBV⁺ lymphoma subtypes.

Nanatinostat in Combination with Valganciclovir in EBV⁺ Solid Tumors

Viracta intends to investigate nanatinostat in combination with valganciclovir in solid tumors. The annual incidence of NPC and GC is estimated to be approximately 100,000 cases for each of the two malignancy types. Although some treatment options are available, there remains a high unmet need, particularly in patients with relapsed/refractory disease. Beyond NPC and GC, Viracta believes EBV-associated breast cancer, especially triple-negative, cervical, and other head & neck cancers are potential areas for further investigation.

High tumor concentrations of nanatinostat have been demonstrated in murine xenograft mouse models of colorectal cancer. As shown in the figure below, the combination of the class I HDAC inhibitor romidepsin with ganciclovir in human tumor murine xenograft mouse models of EBV⁺ NPC and GC has demonstrated a greater effect upon tumor growth than the administration of either agent alone, providing the preclinical proof of concept for combining an HDAC inhibitor with an antiviral agent in solid tumors.

Figure 8: Murine Model of EBV⁺ NPV and GC

Source: Hui KW, et al. Int J Cancer:138.125-136 (2016)

Viracta expects the clearance of a U.S. Investigational New Drug application for the treatment of EBV-associated solid tumors in mid-2021 and expects to initiate a global Phase 1b/2 clinical trial the second half of 2021.

Other Preclinical Programs

Viracta also plans to explore the application of its synthetic lethality approach in other herpes family virus-associated malignancies, such as glioblastomas associated with CMV.