RBC bullish on Nuvation as royalty deal, non-dilutive financings remove overhang

RBC Capital analyst Gregory Renza notes that Nuvation Bio (NUVB) disclosed non-dilutive financings of up to $250M with Sagard Healthcare Partners to fully fund the U.S. launch of taletrectinib. The company will be eligible to receive an upfront cash payment of $150M in royalty interest financing and $50M in debt upon the potential FDA approval of taletrectinib and an option for a second tranche of $50M in additional debt financing. Besides an incremental validation to taletrectinib’s commercial potential, this deal adds greater financial flexibility to fund taletrectinib’s U.S. launch and Nuvation’s broader pipeline and potential for additional value-creating BD opportunity, in the firm’s view. RBC reiterates an Outperform rating on the shares with a price target of $10.