Nuvation Bio Secures Up to $250 Million in Non-Dilutive Financings from Sagard Healthcare Partners

Rhea-AI Summary

Nuvation Bio (NYSE: NUVB) has secured up to $250 million in non-dilutive financing from Sagard Healthcare Partners, comprising a $150 million royalty interest financing and up to $100 million in senior term loans. The financing is contingent on FDA approval of taletrectinib by September 30, 2025.

Upon FDA approval, Sagard will provide $150 million upfront in exchange for tiered royalties on U.S. taletrectinib sales: 5.5% for annual sales up to $600 million and 3.0% for sales between $600 million and $1 billion. Nuvation Bio retains all sales above $1 billion. The royalty agreement terminates when payments reach 1.6-2.0 times Sagard's investment.

The term loan includes $50 million available upon FDA approval and an additional $50 million option until June 30, 2026, following first U.S. commercial sale. The loan carries SOFR + 6.00% interest with a 4.00% floor and matures in 5 years.

Positive

• Secured $250M non-dilutive financing
• No scheduled loan amortization payments until maturity
• Retains 100% of sales above $1B
• Financing sufficient to fund commercialization without additional capital needs

Negative

• Royalty obligations of 5.5% on sales up to $600M
• Additional 3% royalty on sales $600M-$1B
• Financing contingent on FDA approval by Sept 2025
• High interest rate on term loan (SOFR + 6.00%)

Insights

Financial Analyst

Nuvation Bio's $250 million non-dilutive financing represents a transformative development for this emerging oncology company. The structure is particularly noteworthy - $150 million in royalty financing and up to $100 million in debt, all contingent upon taletrectinib's FDA approval by September 2025. This deal substantially bolsters Nuvation's $663 million market cap while preserving existing shareholder ownership.

The royalty terms are structured to maximize long-term value retention. With tiered rates of 5.5% on annual US sales up to $600 million and 3.0% on sales between $600 million-$1 billion, Nuvation retains all economics above $1 billion. Most importantly, royalty payments are capped at 1.6-2.0× Sagard's investment depending on timing, creating a definitive ceiling on the company's obligations.

For investors, this deal addresses the primary risk factor facing clinical-stage biotechs - the need for dilutive financings before reaching profitability. By securing commercial launch funding without equity dilution, Nuvation has effectively extended its runway through the critical transition from development to commercialization. The capital structure provides sufficient resources to execute a robust US launch while advancing its broader clinical pipeline, potentially eliminating the need for future fundraising if taletrectinib achieves commercial success.

The transaction also provides strategic flexibility, with management indicating potential for opportunistic capital deployment. This suggests Nuvation may pursue pipeline-expanding acquisitions or licensing deals from a position of financial strength rather than necessity.

Oncology Expert

Nuvation Bio's financing arrangement speaks volumes about taletrectinib's commercial potential in ROS1-positive non-small cell lung cancer (NSCLC). ROS1 fusions, while occurring in only 1-2% of NSCLC cases, represent a clinically distinct and targetable patient subgroup with significant unmet needs despite existing approved therapies.

The $150 million specifically allocated to commercialization suggests Nuvation is preparing for a comprehensive market launch, including potential companion diagnostic implementation, physician education programs, and patient support services. These elements are critical success factors in the precision oncology space, where identifying eligible patients represents a significant commercialization challenge.

Sagard's willingness to commit substantial capital against approval indicates confidence in taletrectinib's clinical differentiation and regulatory prospects. The targeted mid-2025 approval timeline aligns with typical FDA review periods, suggesting the company anticipates filing their New Drug Application in late 2024 or early 2025.

The royalty structure's $1 billion annual sales ceiling for royalty obligations is particularly interesting. While exact ROS1+ NSCLC market sizing is challenging, this structure suggests both parties anticipate potential peak sales above this threshold - ambitious but not unreasonable for a differentiated targeted therapy with potential for label expansion into additional indications or earlier treatment lines.

For a relatively small company with a $663 million market cap, securing commercialization funding of this magnitude demonstrates institutional confidence in both the clinical asset and management's ability to execute an oncology product launch, typically one of the most complex commercial undertakings in biopharmaceuticals.

Nuvation Bio to receive $150 million in royalty interest financing and $50 million in debt upon U.S. FDA approval of taletrectinib, with access to additional $50 million in debt at the Company’s option

Proceeds from the royalty interest financing expected to fully fund U.S. commercial launch of taletrectinib

Pro forma cash balance expected to fully fund development of current clinical-stage pipeline and create a path to potential profitability without the need for additional fundraising; improves flexibility for opportunistic capital deployment

NEW YORK--(BUSINESS WIRE)-- Nuvation Bio Inc. (NYSE: NUVB), a global biopharmaceutical company tackling some of the greatest unmet needs in oncology, today announced non-dilutive financings of up to $250 million with Sagard Healthcare Partners (Sagard). The transaction comprises a royalty interest financing of $150 million and a senior term loan of up to $100 million. These financings strengthen Nuvation Bio’s balance sheet to fully fund commercialization of taletrectinib in the U.S., if approved, and development of the Company’s current clinical-stage pipeline. The transaction also provides Nuvation Bio with a path to potential profitability without the need to raise additional capital.

“This transaction is a significant milestone for Nuvation Bio as we prepare to bring taletrectinib to the U.S. market, subject to FDA approval, in mid-2025,” said David Hung, M.D., Founder, President, and Chief Executive Officer of Nuvation Bio. “With these financings, we are well positioned to launch taletrectinib and drive continued development of our clinical-stage pipeline—all without the need for additional fundraising. This also improves our flexibility to pursue strategic opportunities to deploy our capital. We are thrilled to have support from Sagard and appreciate their shared confidence in taletrectinib and Nuvation Bio as we continue toward our goal of improving outcomes for patients with cancer.”

Subject to the approval of taletrectinib by the U.S. Food and Drug Administration (FDA) on or prior to September 30, 2025, Sagard will provide Nuvation Bio with an upfront cash payment of $150 million. In return, Sagard will receive tiered royalties on U.S. net sales of taletrectinib, including 5.5% of annual U.S. net sales up to $600 million and 3.0% of annual U.S. net sales between $600 million and $1 billion. Nuvation Bio will retain all annual U.S. net sales above $1 billion. Payments to Sagard will cease upon the earliest occurrence of total royalties reaching 1.6 times its investment by June 30, 2031, 1.75 times its investment by June 30, 2034, or 2.0 times its investment thereafter.

“We are excited to partner with Nuvation Bio, an organization with deep oncology expertise and a commitment to delivering transformative therapies,” said Raja Manchanda, Partner at Sagard Healthcare Partners. “We believe taletrectinib has the potential to redefine the treatment landscape for patients with ROS1-positive non-small cell lung cancer, and we are pleased to provide a structured financing that supports both potential near-term commercialization and long-term growth.”

In addition to the royalty financing, Sagard has committed to a 5-year, senior secured term loan of up to $100 million, with $50 million to be funded upon U.S. FDA approval of taletrectinib on or prior to September 30, 2025. The second tranche of $50 million is available at Nuvation Bio's option until June 30, 2026, as long as Nuvation Bio has achieved first U.S. commercial sale of taletrectinib. The term loan will bear interest at SOFR + 6.00%, subject to a 4.00% SOFR floor. There are no scheduled amortization payments associated with the term loan, with all outstanding principal due at maturity.

TD Cowen served as financial advisor and Cooley LLP served as legal advisor to Nuvation Bio. Sidley Austin LLP served as legal advisors to Sagard.

About Sagard

Sagard is a multi-strategy alternative asset management firm with over US$25B under management, 150 portfolio companies, and 400 professionals. Sagard invests in venture capital, private equity, private credit, and real estate. Sagard delivers flexible capital, an entrepreneurial culture, and a global network of investors, commercial partners, advisors, and value creation experts. Sagard’s dynamic and supportive ecosystem gives its partners the advantage they need to learn, grow and win at every stage. The firm has offices in Canada, the United States, Europe and the Middle East.

About Nuvation Bio

Nuvation Bio is a global biopharmaceutical company tackling some of the greatest unmet needs in oncology by developing differentiated and novel product candidates. Nuvation Bio’s programs include taletrectinib (ROS1), safusidenib (mIDH1), NUV-1511 (DDC), and NUV-868 (BET). Nuvation Bio was founded in 2018 by biopharma industry veteran David Hung, M.D., who previously founded Medivation, Inc., which brought to patients one of the world’s leading prostate cancer medicines. Nuvation Bio has offices in New York, San Francisco, Boston, and Shanghai. For more information, please visit www.nuvationbio.com or follow the Company on LinkedIn and X (@nuvationbioinc).

Forward Looking Statements

Certain statements included in this press release that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are sometimes accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, our expectations regarding U.S. FDA approval and commercial launch of taletrectinib, and the timing thereof, receipt and use of proceeds from the financings to fully fund U.S. commercial launch of taletrectinib and development of Nuvation Bio’s current clinical-stage pipeline, the path to potential profitability without need to raise additional capital, and the potential of taletrectinib to redefine the treatment landscape for patients with ROS1-positive non-small cell lung cancer. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of the management team of Nuvation Bio and are not predictions of actual performance. These forward-looking statements are subject to a number of risks and uncertainties that may cause actual results to differ from those anticipated by the forward-looking statements, including but not limited to the challenges associated with conducting drug discovery and initiating or conducting clinical studies due to, among other things, difficulties or delays in the regulatory process, enrolling subjects or manufacturing or acquiring necessary products; the emergence or worsening of adverse events or other undesirable side effects; risks associated with preliminary and interim data, which may not be representative of more mature data; and competitive developments. Risks and uncertainties facing Nuvation Bio are described more fully in its Form 10-Q filed with the SEC on November 6, 2024, under the heading “Risk Factors,” and other documents that Nuvation Bio has filed or will file with the SEC. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this press release. Nuvation Bio disclaims any obligation or undertaking to update, supplement or revise any forward-looking statements contained in this press release.

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Nuvation Bio Investor Contact:

ir@nuvationbio.com



Nuvation Bio Media Contact:

media@nuvationbio.com

Source: Nuvation Bio Inc.

FAQ

What are the terms of NUVB's $250M financing deal with Sagard?

$150M royalty financing and up to $100M in term loans, contingent on taletrectinib FDA approval by Sept 2025

What royalty rates will NUVB pay on taletrectinib U.S. sales?

5.5% on sales up to $600M, 3.0% on sales between $600M-$1B, no royalties above $1B

When does NUVB expect potential FDA approval for taletrectinib?

Mid-2025, with approval required by September 30, 2025 for financing terms

What are the terms of NUVB's term loan from Sagard?

5-year term, SOFR + 6.00% interest, $50M at FDA approval, additional $50M option by June 2026

When does NUVB's royalty obligation to Sagard end?

When payments reach 1.6x investment by June 2031, 1.75x by June 2034, or 2.0x thereafter