Nuvation Bio Inc. (NUVB) Stock Brings Bad News

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Nuvation Bio Inc. (NYSE: NUVB) is a biotech player that has taken a series of hits, as reflected in its stock price. NUVB stock has seen a plummet of 78% in the last 12 months alone. Most recently, the company faced dire news, yet it seeks to rise from the problems it confronts.

An End to Nuvation’s Cancer Trials

The outlook for Nuvation Bio Inc. (NUVB) took a drastic fall last month when the management decided to discontinue the development of its cancer treatment candidate, NUV-422. The decision had come after concerning feedback from the US FDA, raising serious safety concerns, after the emergence of eye inflammation amongst trial participants. Because Nuvation was not in a position to mitigate this emerging condition, it opted for the complete discontinuation of the program. As a result, approximately 35% of the organization’s staff had been laid off, to ensure cost savings and a refocusing of resources on ongoing trials. The company’s management claimed that this move pushed up NUVB’s cash runway through to 2028.

NUVB’s Enhanced Financial Position

Although the NUV-422 discontinuation was a point of plummet for NUVB, the resulting resource orientation significantly boosts the company’s liquidity and financial position. As of June 30, 2022, the company had a total cash holding and liquid securities worth $704 million. This cash position is sufficient in funding Nuvation’s existing trials and programs right through 2028. The particular focus of the management team lies around the BET inhibiting candidate, NUV-868, which is currently in phase I trials.

Conclusion

NUVB stock, as an investment, faces a number of challenges and risks moving forward. The discontinuation of a major trial due to adverse side effects, and a subsequent laying off of more than a third of the organization is always a severe red flag. Yet the company aims to reorient itself in the aftermath, with its stronger liquidity position.

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