8-K/A - NUVB - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuantto Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 10, 2021

Nuvation Bio Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-39351	85-0862255
(State or other jurisdiction<br><br><br>of incorporation)	(Commission<br><br><br>File Number)	(IRS Employer<br><br><br>Identification No.)
1500 Broadway, Suite 1401<br><br><br>New York, NY		10036
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (332)208-6102

Panacea Acquisition Corp. 357 Tehama Street, Floor 3, San Francisco, CA 94103

(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 obligations 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<br>CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	TradingSymbol(s)	Name of each exchangeon which registered
Class A Common Stock, $0.0001 par value per share	NUVB	The New York Stock Exchange
Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share	NUVB.WS	The New York Stock Exchange

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. ☐

Introductory Note

This Amendment No. 1 on Form 8-K/A (this “Amendment No. 1”) amends Item 9.01 of the Current Report on Form 8-K filed by Nuvation Bio Inc. (the “Company”) on February 12, 2021 (the “Original Report”), in which the Company reported, among other events, the completion of the Business Combination. This Amendment No. 1 amends the financial statements provided under Items 9.01(a) and 9.01(b) in the Original Report to include (a) the audited consolidated financial statements of Legacy Nuvation Bio as of and for the years ended December 31, 2020 and 2019 and the related notes and (b) the unaudited pro forma condensed combined financial information of the Company as of and for the year ended December 31, 2020. This Amendment No. 1 does not amend any other item of the Original Report or purport to provide an update or a discussion of any developments at the Company subsequent to the filing date of the Original Report.

Capitalized terms used but not defined herein have the meanings given in the Original Report.

Item 9.01	Financial Statement and Exhibits.

(a) Financial Statements of Business Acquired.

The audited consolidated financial statements of Legacy Nuvation Bio as of and for the years ended December 31, 2020 and 2019 and related notes are filed herewith as Exhibit 99.1 and incorporated herein by reference.

Also included herewith as Exhibit 99.2 and incorporated herein by reference is the Management’s Discussion and Analysis of Financial Condition and Results of Operations of Legacy Nuvation Bio for the year ended December 31, 2020.

(b) Pro Forma Financial Information.

The unaudited pro forma condensed combined financial information of the Company as of and for the year ended December 31, 2020 is set forth in Exhibit 99.3 hereto and is incorporated herein by reference.

(d) Exhibits.

Exhibit Number	Description
99.1	Audited consolidated financial statements of Legacy Nuvation Bio as of and for the years ended December 31, 2020 and 2019.
99.2	Management’s Discussion and Analysis of Financial Condition and Results of Operations for Legacy Nuvation Bio for the year ended December 31, 2020.
99.3	Unaudited pro forma condensed combined financial information of the Company as of and for the year ended December 31, 2020.

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.

	NUVATION BIO INC.
Dated: March 11, 2021
	By:	/s/ Jennifer Fox
	Name:	Jennifer Fox
	Title:	Chief Financial Officer

EX-99.1

Exhibit 99.1

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Nuvation Bio Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Nuvation Bio Inc. and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations and comprehensive loss, changes in redeemable series A convertible preferred stock and stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2020, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the auditing standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company’s auditor since 2019.

Short Hills, NJ

March 11, 2021

NUVATION BIO INC. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

December 31,			2019
Assets
Current assets:
Cash and cash equivalents	29,755		$	3,469
Prepaid expenses	914			187
Marketable securities available-for-sale, at fair value	185,997			112,893
Investments to be held to maturity, at cost	—			2,508
Interest receivable on marketable securities	1,092			828
Deferred financing costs	2,925			—
Total current assets	220,683			119,885
Property and equipment, net	688			646
Other assets:
Lease security deposit	421			421
Total assets	221,792		$	120,952
Liabilities, redeemable convertible preferred stock, and stockholders’<br>deficit		****
Current liabilities:
Accounts payable	2,171		$	2,030
Accrued expenses	4,380			1,163
Deferred rent	—			11
Total current liabilities	6,551			3,204
Deferred rent - non current	157			—
Total liabilities	6,708			3,204
Commitments and contingencies (Note 15)
Redeemable Series A convertible preferred stock, 0.0001 par value per share; 360,500,000<br>shares authorized; 347,423,117 and 184,501,999 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively (liquidation preference of 268 million as of December 31, 2020)	267,521			141,864
Stockholders’ deficit
Class A and Class B common stock and additional paid in capital, 0.0001 par value per share;<br>1,174,094,678 shares authorized as of December 31, 2020 (Class A 880,000,000, Class B 294,094,678) and 880,000,000 authorized shares of common stock as of December 31, 2019; 412,963,780 (Class A 118,869,102, Class B<br>294,094,678) and 400,000,000 shares issued and outstanding as of December 31, 2020 and 2019, respectively	21,961			9,759
Accumulated deficit	(75,955	)		(34,296	)
Accumulated other comprehensive income	1,557			421
Total stockholders’ deficit	(52,437	)		(24,116	)
Total liabilities, redeemable convertible preferred stock, and stockholders’<br>deficit	221,792		$	120,952

All values are in US Dollars.

See accompanying notes to the consolidated financial statements.

NUVATION BIO INC. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)

For the Years Ended December 31,	2020			2019
Operating expenses:
Research and development	$	32,603		$	25,106
General and administrative		10,948			6,993
Total operating expenses		43,551			32,099
Loss from operations		(43,551	)		(32,099	)
Other income (expense):
Interest income		1,945			1,287
Investment advisory fees		(271	)		(135	)
Realized gain on marketable securities		218			53
Interest expense		—			(2,658	)
Total other income (expense)		1,892			(1,453	)
Loss before income taxes		(41,659	)		(33,552	)
Provision for income taxes		—			—
Net loss	$	(41,659	)	$	(33,552	)
Deemed dividend related to beneficial conversion feature and accretion of discount on Redeemable<br>Series A Convertible Preferred Stock	$	(22,622	)		—
Net loss attributable to common stockholders	$	(64,281	)	$	(33,552	)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.23	)	$	(0.16	)
Weighted average common shares outstanding, basic and diluted		277,529,317			206,672,024
Comprehensive loss:
Net loss	$	(41,659	)	$	(33,552	)
Other comprehensive income, net of taxes:
Change in unrealized gain on available-for-sale securities		1,136			421
Comprehensive loss	$	(40,523	)	$	(33,131	)

See accompanying notes to the consolidated financial statements.

NUVATION BIO INC. and Subsidiaries

Consolidated Statement of Changes in Redeemable Series A

Convertible Preferred Stock and Stockholders' Deficit

(In thousands, except share data)

For the Years Ended December 31, 2020 and 2019

						Common Stock andAdditional Paid-in Capital				AccumulatedDeficit			AccumulatedOtherComprehensiveIncome		TotalStockholders'Deficit
			Amount			Shares		Amount
Balance, at December 31, 2018	—		$	—			110,000,000	$	—	$	(744	)	$	—	$	(744	)
Issuance of shares	—			—			276,036,220		5,011		—			—		5,011
Issuance of shares for purchase of in-process research and development	—			—			13,963,780		4,748		—			—		4,748
Issuance of shares (net of 457 in issuance costs)	161,624,742			124,217			—		—		—			—		—
Issuance of shares on conversion of convertible debt	22,877,257			17,647			—		—		—			—		—
Net loss	—			—			—		—		(33,552	)		—		(33,552	)
Other comprehensive income	—			—			—		—		—			421		421
Balance, December 31, 2019	184,501,999			141,864			400,000,000		9,759		(34,296	)		421		(24,116	)
Issuance of shares (net of 17 in issuance costs) (a)	175,884,898			135,657			—		—		—			—		—
Shares exchanged in recapitalization	(12,963,780	)		(10,000	)		12,963,780		10,000		—			—		10,000
Stock-based compensation	—			—			—		2,202		—			—		2,202
Net loss	—			—			—		—		(41,659	)		—		(41,659	)
Other comprehensive income	—			—			—		—		—			1,136		1,136
Balance, December 31, 2020	347,423,117		$	267,521			412,963,780	$	21,961	$	(75,955	)	$	1,557	$	(52,437	)

All values are in US Dollars.

(a)	Reflected net of deemed dividend and beneficial conversion feature (see note 9)

See accompanying notes to the consolidated financial statements.

NUVATION BIO INC. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

For the Years Ended December 31,	2020			2019
Cash flows from operating activities:
Net loss	$	(41,659	)	$	(33,552	)
Adjustments to reconcile net loss to net cash used in operating activities:
Issuance of common stock for in-process research and development expense		—			4,748
Stock-based compensation		2,202			—
Non-cash interest expense		—			2,658
Depreciation and amortization		103			13
Amortization of premium on marketable securities		933			267
Realized gain on marketable securities		(218	)		(53	)
Change in operating assets and liabilities
Prepaid expenses		(727	)		(166	)
Interest receivable on marketable securities		(264	)		(828	)
Payment of lease security deposit		—			(421	)
Accounts payable		34			1,947
Accrued expenses		2,921			944
Deferred rent		146			11
Net cash used in operating activities		(36,529	)		(24,432	)
Cash flow from investing activities:
Purchases of marketable securities		(143,289	)		(136,232	)
Proceeds from sale of marketable securities		70,606			23,544
Proceeds from (purchase of) investment held to maturity		2,508			(2,508	)
Purchases of property and equipment		(145	)		(659	)
Net cash used in investing activities		(70,320	)		(115,855	)
Cash flow from financing activities:
Proceeds from convertible debt		—			14,990
Proceeds from issuance of preferred stock net of issuance costs		135,657			124,217
Proceeds from issuance of common stock		—			5,011
Deferred financing costs		(2,522	)		—
Proceeds from loan payable to stockholder		—			30
Repayment of loan payable to stockholder		—			(630	)
Net cash provided by financing activities		133,135			143,618
Net increase in cash and cash equivalents		26,286			3,331
Cash and cash equivalents, beginning of the year		3,469			138
Cash and cash equivalents, end of the year	$	29,755		$	3,469
Non-cash financing activities:
Deferred financing costs in accounts payable	$	107		$	—
Deferred financing costs in accrued expenses	$	296		$	—
Issuance of preferred shares on conversion of convertible debt	$	—		$	17,647
Issuance of common stock for in-process research and development	$	—		$	4,748
Deemed dividend related to beneficial conversion feature and accretion of discount on Redeemable<br>Series A Convertible Preferred Stock	$	22,622		$	—

See accompanying notes to the consolidated financial statements.

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

1.	Nature of Operations

Nuvation Bio Inc. and subsidiaries (the “Company”), formerly known as RePharmation Inc., a Delaware Limited Corporation, is a privately held biotechnology company currently operating on development activities on unmet needs in oncology. The Company was incorporated on March 20, 2018 (inception date). The Company has offices in New York and San Francisco. The Company’s two subsidiaries are dormant and have had no operations since the inception date.

2.	Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. From its inception, the Company has devoted substantially all of its efforts to business planning, engaging consultants, acquiring and discovering its assets, and raising capital.

Principles of Consolidation

The consolidated financial statements include the balances of the Company and its subsidiaries. All intercompany transactions and balances are eliminated in consolidation.

Liquidity

As of December 31, 2020, the Company has an accumulated deficit of approximately $76.0 million and net cash used in operating activities was approximately $36.5 million for the year ended December 31, 2020. Management expects to continue to incur operating losses and negative cash flows from operations for the foreseeable future. The Company has financed its operations to date from proceeds from issuance of convertible debt, preferred stock, and common stock.

As of December 31, 2020, the Company had cash, cash equivalents, and marketable securities of $215.8 million. The Company believes that its existing cash, cash equivalents, and marketable securities will be sufficient to meet its cash commitments for at least the next 12 months after the date that these consolidated financial statements are issued. The Company’s research and development activities can be costly, and the timing and outcomes are uncertain. The assumptions upon which the Company has based its estimates are routinely evaluated and may be subject to change. The actual amount of the Company’s expenditures will vary depending upon a number of factors including but not limited to the progress of the Company’s research and development activities, the infrastructure to support a commercial enterprise, and the level of financial resources available.

The Company will need to raise additional capital in order to continue to fund operations. The Company believes that it will be able to obtain additional working capital through equity financings or other arrangements to fund future operations; however, there can be no assurance that such additional financing, if available, can be obtained on terms acceptable to the Company. See note 16 for gross proceeds received by the Company from an equity financing and additional funds available for future operations.

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

2.	Significant Accounting Policies (continued)

Significant Risks and Uncertainties

The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of research and development, clinical testing and trial activities of the Company’s products, the Company’s ability to obtain regulatory approval to market its products, competition from products manufactured and sold or being developed by other companies, the price of, and demand for, Company’s products, the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products, and the Company’s ability to raise capital.

The Company currently has no commercially approved products and there can be no assurance that the Company’s research and development will be successfully commercialized. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and vendors and obtaining and protecting intellectual property.

The COVID-19 pandemic has not had a material adverse impact on the Company’s operations to date, however this disruption, if sustained or recurrent, could have a material adverse effect on the Company’s operating results, its ability to raise capital needed to develop and commercialize products and the Company’s overall financial condition.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the year. Accordingly, actual results could differ from those estimates and those differences could be significant. Significant estimates and assumptions reflected in the accompanying consolidated financial statements include, but are not limited to, the fair value of in-process research and development acquired and stock options granted, and depreciation expense.

Cash and Cash Equivalents

Cash equivalents include short-term, highly liquid instruments, consisting of money market accounts, a money market mutual fund and short-term investments with maturities from the date of purchase of 90 days or less. The majority of cash and cash equivalents are maintained with major financial institutions in North America. Deposits with these financial institutions may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand with reduces counterparty performance risk.

Investment Securities

Debt securities have been classified into either of the following two categories:

•	Available-for-sale —<br>securities which may be sold before maturity or are not classified as held to maturity or trading. Marketable debt securities classified as available-for-sale are<br>carried at fair value with unrealized gains or losses reported in other comprehensive income (loss).

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

2.	Significant Accounting Policies (continued)

Investment Securities (continued)

•	Held to maturity — securities which are held to maturity and which management has the positive intent and<br>ability to hold them to maturity. These securities are carried at amortized cost.

Management evaluates individual securities for other than temporary impairment at year end. For securities in an unrealized loss positions, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assess whether it intends to sell, or it is more likely that not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. For cost-method securities which management has not estimated the fair value, management evaluates whether an event or change in circumstance has occurred that may have a significant adverse effect on the fair value of the investment. If management determines there is an any other than temporary impairment, the entire difference between amortized cost and fair value is recognized as impairment through earnings.

Interest income includes amortization and accretion of purchase premium and discount. Premiums and discounts on debt securities are amortized on the effective-interest method. Gains and loss on sales are recorded on the settlement date and determined using the specific identification method.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash, cash equivalents and marketable securities. The Company maintains its cash and cash equivalent balances in the form of business checking accounts and money market accounts, the balances of which, at times, may exceed federally insured limits. Exposure to cash and cash equivalents credit risk is reduced by placing such deposits with major financial institutions and monitoring their credit ratings. Marketable securities consist primarily of government and corporate bonds, with fixed interest rates. Exposure to credit risk of marketable securities is reduced by maintaining a diverse portfolio and monitoring their credit ratings.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the related assets of generally five years for computers and seven years for furniture and equipment. The cost of leasehold improvements is amortized on the straight-line method over the lesser of the estimated asset life or remaining term of the lease. Maintenance costs are expensed as incurred, while major betterments are capitalized.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and an impairment assessment may be performed may be performed on the recoverability or the carrying amounts. If an impairment occurs, the loss is measured by comparing the fair value of the asset to its carrying amount.

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

2.	Significant Accounting Policies (continued)

Deferred Financing Costs

Costs incurred in advance related to the plan of merger as described in note 16 below are recorded as deferred financing costs on the consolidated balance sheet.

Net Loss per Share Attributable to Common Stockholders

The Company uses the two-class method of reporting earnings per share as the Redeemable Series A Convertible Preferred Stock is a participating security, however they do not share in losses and therefore the reported net losses have not been allocated to the preferred stock. Basic loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding, including Class A and Class B common stock, but excluding shares of common stock subject to repurchase for the period. The number of common stock shares subject to repurchase was determined prospectively from the date of the “Stock Restriction Agreement”, as described below. Diluted loss per share reflects the potential dilution that could occur if the stock options to issue common stock were exercised. The Company had a net loss in all periods presented thus the dilutive net loss per common share is the same as the basic net loss per common share as the effect of any options or conversions is anti-dilutive.

The earnings per share amounts are the same for the different classes of common stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or liquidation.

The following securities outstanding at December 31, 2020 and 2019 have been excluded from the calculation of weighted average shares outstanding:


Redeemable Series A convertible preferred stock shares	347,423,117	184,501,999
Class B common stock shares subject to repurchase	92,773,196	—
Common stock shares subject to repurchase	—	154,621,994
Class A common stock options	43,318,218	—

Segment Information

The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s operations are focused on oncology development activities.

Research and Development Costs

Costs incurred in connection with research and development activities are expenses as incurred. These costs include fees paid to consultants, vendors and various entities that perform certain research and testing on behalf of the Company.

In addition, the Company entered into asset acquisition agreements to acquire certain assets for $5 million cash and $4.7 million in common stock for a total amount of $9.7 million for the year ended December 31, 2019. These transactions were recorded as an asset acquisition. The aggregate purchase price is included in research and development expense for the year ended December 31, 2019, as the assets purchased are for use in research and development projects and have no alternative future uses.

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

2.	Significant Accounting Policies (continued)

Stock-based Compensation

The Company recognizes compensation cost for grants of employee stock options using a fair-value measurement method, that is recognized in operating results as compensation expense based on fair value over the requisite service period of the awards. Forfeitures are recorded as they occur instead of estimating forfeitures that are expected to occur.

The Company determines the fair value of stock-based awards that are based only on a service condition using the Black-Scholes option-pricing model which uses both historical and current market data to estimate fair value. The method incorporates various assumptions such as the risk-free interest rate, volatility, dividend yield, and expected life of the options.

The Company determines the fair value of stock-based awards that are based on both a service condition and achievement of the first to occur of a market or performance condition using a Monte Carlo simulation.

Income Taxes

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. The difference between the financial statement and tax basis of assets and liabilities is determined annually. Deferred income tax assets and liabilities are computed for those differences that have future tax consequences using the currently enacted tax laws and rates that apply to the years in which they are expected to affect taxable income. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense.

The Company uses a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax positions taken, or expected to be taken, in a tax return. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate. The Company’s policy is to record interest and penalties related to income taxes as part of the tax provision. Returns for tax years beginning with those filed for the period ended December 31, 2018 are open to federal and state tax examination.

Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases. Subsequently, the FASB issued ASU 2019-10 and then ASU 2020-05, both of which adjusted the effective date of ASU 2016-02 for non-public entities. The accounting standard is effective for non-public entities for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. A modified retrospective transition approach is required at the beginning of the earliest comparative period presented in the

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

2.	Significant Accounting Policies—(Continued)

Accounting Pronouncements Not Yet Adopted—(Continued)

financial statements, with certain practical expedients available. The Company is currently evaluating the impact of the pending adoption of the new standard on the Company’s consolidated financial statements.

Recently Adopted Accounting Pronouncements

In March 2017, the FASB issued ASU No. 2017-08, Receivables-Nonrefundable Fees and Other Costs (Topic 310-20): This ASU shortens the amortization period of premiums on certain purchased callable debt securities to the earliest call date. This standard was effective for the Company in 2020. The adoption of this guidance had an immaterial impact on the Company’s consolidated financial statements as of and for the year ended December 31, 2020.

In August 2018 the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. This standard modifies certain disclosure requirements on fair value measurements. This standard became effective for the Company on January 1, 2020. The adoption of this standard did not have a material impact on the Company’s disclosures.

3.	Fair Value Measurements and Marketable Securities Available-for-Sale

The Company provides disclosure of financial assets and financial liabilities that are carried at fair value based on the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements may be classified based on the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities using the following three levels:

Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 — Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.) and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 — Unobservable inputs that reflect the Company’s estimates of the assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available, including its own data.

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

3.	Fair Value Measurements and Marketable Securities Available-for-Sale (continued)

The following table presents information about the Company’s marketable securities as of December 31, 2020 and 2019, measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. There have not been any transfers between the levels during the periods.

	December 31, 2020
	Total		Level 1		Level 2		Level 3
	(In thousands)
Marketable securities	$	185,997	$	—	$	185,997	$	—
	December 31, 2019
---	---	---	---	---	---	---	---	---
	Total		Level 1		Level 2		Level 3
	(In thousands)
Marketable securities	$	112,893	$	—	$	112,893	$	—

Marketable securities consist of U.S. government debt and corporate bond securities. Based on the Company’s intentions regarding its marketable securities, all marketable securities are classified as available-for-sale and are carried at fair value based on the price that would be received upon sale of the security. The following table provides the cost, aggregate fair value, and unrealized gains of marketable securities available-for-sale as of December 31, 2020 and 2019:

	December 31, 2020
	AmortizedCost		Fair Value		UnrealizedGain
	(In thousands)
Marketable securities:
U.S. government securities	$	97,495	$	98,180	$	685
Corporate bonds		86,945		87,817		872
	$	184,440	$	185,997	$	1,557
	December 31, 2019
---	---	---	---	---	---	---
	AmortizedCost		Fair Value		UnrealizedGain
	(In thousands)
Marketable securities:
U.S. government securities	$	63,875	$	64,032	$	157
Corporate bonds		48,597		48,861		264
	$	112,472	$	112,893	$	421

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

3.	Fair Value Measurements and Marketable Securities Available-for-Sale (continued)

Maturity information based on fair value is as follows as of December 31, 2020:

	Within one year		After one yearthrough five years		Total
	(In thousands)
U.S. government securities	$	23,881	$	74,299	$	98,180
Corporate bonds		17,788		70,029		87,817
	$	41,669	$	144,328	$	185,997

Amortization and accretion of the original cost of the corporate bonds and U.S. government securities to their outstanding principal amounts is included in interest income on the consolidated statement of operations and comprehensive loss. Amortization, net of accretion, amounted to $0.9 million and $0.3 million for the years ended December 31, 2020 and 2019, respectively.

4.	Investment Held to Maturity

The Company had a certificate of deposit that matured in September 2020. The investment was recorded at cost including credited interest at 1.98% per annum.

5.	Property and Equipment

Property and equipment, net consisted of the following:

	December 312020			December 31,2019
	(In thousands)
Computers	$	248		$	190
Furniture and fixtures		312			297
Leasehold improvements		244			172
		804			659
Less accumulated depreciation and amortization		(116	)		(13	)
Total property and equipment, net	$	688		$	646

Depreciation expense related to property and equipment was $0.1 million and $0.01 million for the years ended December 31, 2020 and 2019, respectively.

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

6.	Accrued Expenses

Accrued expenses consisted of the following:

	December 31,2020		December 31,2019
	(In thousands)
Accrued consultant fees	$	278	$	268
Accrued employee compensation		3,231		711
Accrued professional fees		523		—
Accrued other		348		184
	$	4,380	$	1,163
7.	Loan Payable to Stockholder
---	---

The founder of the Company loaned the Company $0.6 million in 2018 and an additional $0.03 million in 2019 to fund operations prior to obtaining financing. The Company has repaid the founder in full as of December 31, 2019. The loans were non-interest-bearing and had no fixed repayment terms.

8.	Convertible Debt

The Company received $15 million in cash from the issuance of $15 million convertible promissory notes during the year ended December 31, 2019. Interest accrued at a rate of 8% per annum. The notes are automatically converted upon the closing of a subsequent Series A Preferred Stock financing into such preferred shares. The number of preferred shares issued to the note holders upon conversion equals the aggregate principal and accrued interest divided by the product of 85% and the price per share paid by the investors in the subsequent Series A Preferred Stock. The Company recorded a discount of $2.7 million to the notes and a derivative liability of $2.7 million at issuance representing the value of the conversion option.

In June 2019, the Company closed on the Series A Preferred Stock financing and the holders of the convertible promissory notes upon conversion received 22,877,257 shares of Series A Preferred Stock. The discount on the notes totaling $2.7 million was fully accreted on the conversion date and is included in interest expense on the consolidated statements of operations and comprehensive loss for the year ended December 31, 2019. The holders of the convertible promissory notes agreed to forgive all accrued interest totaling $0.2 million which was reported net against interest expense and such amount was not included in the calculation of the number of preferred shares issued on conversion.

9.	Redeemable Series A Convertible Preferred Stock

As of December 31, 2020, one shareholder and certain other shareholders under common management owned approximately 49% of the outstanding preferred stock.

The Company classified the redeemable convertible preferred stock outside of stockholders’ deficit because the shares contained certain redemption features that were not solely within the control of the Company. Costs incurred in connection with the issuance of the redeemable convertible preferred stock were recorded as a reduction of the gross proceeds received.

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

9.	Redeemable Series A Convertible Preferred Stock (continued)

Beneficial Conversion Feature

In 2020, the Company issued 175,884,898 shares of Redeemable Series A Convertible Preferred Stock (“Series A Preferred Stock”) with a beneficial conversion feature as the fair value of the common stock into which the preferred stock is convertible exceeded the purchase price of the preferred stock by $22.6 million on the date of issuance. The Company recognized $22.6 million of the gross proceeds received representing the beneficial conversion amount as an increase to additional paid in-capital and a corresponding $22.6 million reduction to additional paid in-capital for a one-time non-cash deemed dividend to the Series A Preferred Stock on the date of issuance, which is the date the stock first became convertible.

Dividends

The Company shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Company (other than dividends on shares of common stock payable in shares of common stock) unless the holders of the Series A Preferred Stock then outstanding shall simultaneously receive, a dividend on each outstanding share of Series A Preferred Stock in an amount at least equal to the common stock dividend issued.

Preferential Payments to Holders of Series A Preferred Stock

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution, before any payments to the holders of Common Stock, the greater of (i) the Series A original issue price of 0.77138 per share, subject to certain adjustments such as any stock dividends, stock splits or recapitalization with respect to the Series A Preferred Stock, plus any dividends declared but unpaid or (ii) the amount per share as would have been payable had all shares of the Series A Preferred Stock been converted into common stock immediately prior to the event. If upon any such liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series A Preferred Stock the full amount to which they shall be entitled, the holders of shares of Series A Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares of Series A Preferred Stock held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

Voting Rights

Holders of Series A Preferred Stock have the right to vote the number of shares equal to the number of whole shares of Class A Common Stock into which such preferred stock could be converted as of the record date for determining stockholders entitled to vote on such matter.

Optional Conversion

The holders of the Series A Preferred Stock shall have rights to convert each share of Series A Preferred Stock at the option of the holder, at any time and from time to time, and without the payment of additional consideration by the holder, into fully paid shares of Class A Common Stock at the applicable preferred stock conversion ratio, which is currently one share of Class A Common Stock for one share of Series A Preferred Stock. The

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

9.	Redeemable Series A Convertible Preferred Stock (continued)

Optional Conversion (continued)

conversion ratio is subject to change upon the issuance of additional shares of common stock or change to the conversion price either higher or lower than the original issuance.

10.	Common Stock

Share Recapitalization

On November 20, 2020, the Company amended its certificate of incorporation authorizing the issuance of three classes of stock designated as “Class A Common Stock”, “Class B Common Stock” and “Series A Preferred Stock”, respectively.

As a result of the amended certificate of incorporation, each share of common stock issued and outstanding prior to the amendment was automatically reclassified and became one issued and fully paid share of Class A Common Stock. Immediately following the reclassification, the Company’s founder (“Founder”) exchanged 281,130,898 shares of the newly classified Class A Common Stock and 12,963,780 shares of Series A Preferred Stock owned into 294,094,678 shares of newly issued Class B Common Stock. The terms of the Stock Restriction Agreement, as discussed below, continues to apply to an equal number of shares Class B Common Stock.

The holder of the Class B Common Stock had the option to convert each share into one fully paid share of Class A Common Stock at any time. Upon the earlier of the date (i) the Founder of the Company owns in aggregate fewer than 220,571,000 shares of Common Stock, (ii) the Founder no longer serves as the Company’s Chief Executive Office or (iii) the Founder’s death or disability, each share of Common B Common Stock shall automatically convert to one fully paid share of Class A Common Stock and the Company shall not issue any additional shares of Class B Common Stock. Each share of Class B Common Stock shall automatically convert into one paid share of Class A Common Stock upon any sale or disposition of a share of Class B Common Stock.

In the event of liquidation, holders of the Class A and Class B Common Stock are entitled to share ratably in all the Company assets, after liquidation preferences of the preferred stock are satisfied.

As of December 31, 2020, two shareholders owned approximately 95% of the outstanding Class A common stock and the Founder owns 100% of the outstanding Class B common stock.

Voting

Holders of Class A Common Stock are entitled to one vote for each share held and holders of Class B Common Stock are entitled to ten votes for each share held at all meetings of stockholders. There shall be no cumulative voting.

Stock Restriction Agreement

The Company and the Founder entered into a “Stock Restriction Agreement” in June 2019. The Stock Restriction Agreement provides that in the event the Founder’s relationship with the Company terminates for any reason and

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

10.	Common Stock (continued)

Stock Restriction Agreement (continued)

is no longer providing services to the Company, then the Company has the option for a period of 120 days after termination to repurchase a certain number of the common stockholder’s Class B common shares at the lower of the original price paid by the common stock holder or the fair market value of the stock as of the date of repurchase. The number of shares subject to repurchase is reduced each month by 5,154,066 common shares per month and no common shares will be subject to repurchase by June 2022. The repurchase option will lapse upon any of the following (i) a change in control of the Company, (ii) holder’s employment is terminated as result of holder’s death or disability, (iii) holder’s employment is involuntarily terminated without cause, or (iv) holder terminates employment for specified good reasons. As of December 31, 2020, there are 92,773,196 shares of Class B Common Stock subject to the repurchase option.

Issuance of Shares for Acquired In-ProcessResearch & Development

The Company issued 13,963,780 shares of common stock with an aggregate fair value of $4.7 million or $0.34 per share during the year ended December 31, 2019, which represents a portion of the total consideration paid for acquired in-process research development. The fair value of the common stock issued was determined using the Black-Sholes option pricing model to calculate the total value of the Company based on the Series A Preferred Stock transaction and then applied the back-solve method to arrive at the allocated value to the common stock. The resultant common stock value was discounted 40% for lack of marketability. The inputs in the Black-Scholes option-pricing model to determine the fair value is as follows:

Risk-free interest rate	1.52	%
Expected volatility	85	%
Probability weighted time to exit in years	4
11.	Other Comprehensive Income
---	---

The following table presents a rollforward of the changes in accumulated other comprehensive income for the years ended December 31, 2020 and 2019, which is all attributable to unrealized gains on available-for-sale securities. All amounts are net of tax.

	2020			2019
Balance at beginning of year	$	421		$	—
Unrealized gain		1,354			474
Amount reclassified for gains included in realized gain on marketable securities		(218	)		(53	)
Balance at end of year	$	1,557		$	421
12.	Stock-Based Compensation
---	---

In March 2019, the Company adopted the 2019 Equity Incentive Plan (as subsequently amended and restated, the “Plan”), which provides for the grant of options, stock appreciation rights, restricted stock, and other stock awards. The number of shares reserved for issuance under the Plan is 53,731,565 shares of common stock. There are 10,413,347 shares available for future grants as of December 31, 2020. The holders of granted options are

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

12.	Stock-Based Compensation (continued)

entitled to purchase common stock from the Company, at a specified exercise price, during a period specified in the applicable equity award agreement. The vesting and any restrictions are determined at the discretion of the Company’s Board of Directors. The exercise price of each option shall not be less than 100% of the fair market value of the share of common stock on the date of grant and the term of the option shall not be greater than ten years. The Company has granted stock-based awards with service conditions only and awards that include service, market, and performance conditions.

The stock-based compensation expense included in the Company’s consolidated statement of operations and comprehensive loss for the year ended December 31, 2020 is as follows (in thousands):

Research and development	$	1,509
General and administrative		693
	$	2,202

There was no reported stock-based compensation expense for the year ended December 31, 2019 as no stock options were granted prior to 2020.

Options with Service Conditions

Options granted with only service conditions generally vest over four years and expire after ten years. Stock option activity with service condition only for employees and members of the Company’s Board of Directors for the year ended December 31, 2020 is as follows:

			Weighted-AverageExercisePrice
Outstanding December 31, 2019	—		$	—	—
Granted	30,380,090			0.46
Forfeited	(5,954,421	)		0.34
Expired	—			—
Outstanding December 31, 2020	24,425,669			0.47	9.23
Exercisable December 31, 2020	5,505,267			0.35	8.83

The weighted average grant-date fair value of stock options outstanding on December 31, 2020 was $0.35 per share. Total unrecognized compensation costs related to non-vested stock options at December 31, 2020 was $6.9 million and is expected to be recognized within future operating results over a weighted-average period of 3.03 years.

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

12.	Stock-Based Compensation (continued)

Options with Service Conditions (continued)

For stock options granted with only service conditions during the year ended December 31, 2020, the inputs in the Black-Scholes option-pricing model to determine the fair value is as follows:

Exercise price	$	0.34 — $2.03
Risk-free interest rate		0.37% — 1.64%
Expected volatility		85% — 95%
Expected term in years		6.08 — 6.25
Dividend yield		0%

As a private company, the Company lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies. The expected term of the Company’s options has been determined utilizing the “simplified” method. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Dividend yield is based on the expectation that the Company will not pay any cash dividends in the foreseeable future.

Options with Service, Market, and Performance Conditions

Options granted with combined service, market, and performance conditions will vest based on achievement of various service conditions and either a market-based or performance-based goals in three tranches with multiple categories such as the Company’s market capitalization, and clinical and regulatory milestones. The market-based and performance-based goals period ends in October 2030. The explicit service periods are three years for tranche 1, four years for tranche 2, and five years for tranche 3. Upon the vesting requirement, 20% of the options will vest for each of tranche 1 and 2, and 60% of the options granted for tranche 3 will vest. The Company recognizes the fair value of the options within each tranche over their explicit service periods which is longer than that derived service period. The achievement of the performance condition was not deemed probable on the date of grant. The expensed recognized is based on the fair value of the market condition for the year ended December 31, 2020. Stock option activity with combined service, market, and performance conditions for employees for the year ended December 31, 2020 is as follows:

		Weighted-AverageExercisePrice
Outstanding December 31, 2019	—	$	—	—
Granted	18,892,549		0.94
Outstanding December 31, 2020	18,892,549		0.94	9.77
Exercisable December 31, 2020	—		—	—

The weighted average grant-date fair value of stock options outstanding on December 31, 2020 for the combined tranches was $0.62 per share. Total unrecognized compensation costs related to non-vested stock options with combined service, market, and performance conditions at December 31, 2020 was $11 million and is expected to be recognized within future operating results over a weighted-average period of 4.19 years.

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

12.	Stock-Based Compensation (continued)

Options with Service, Market, and Performance Conditions (continued)

The fair value of the stock options granted with combined service, market, and performance conditions was based on a Monte Carlo simulation with an embedded Black-Sholes pricing model. For the year ended December 31, 2020, the fair value was computed using the following assumptions:

Derived service period in years		0.48 — 1.67
Exercise price	$	0.90 — 2.03
Risk-free interest rate		0.78
Expected volatility		71
Expected term in years		5.85 — 6.02
Dividend yield		0

All values are in US Dollars.

The determination of expected volatility, risk- free rate, and dividend yield was the same approach as used for the above stock options granted with service only conditions. The derived service period represents when the simulation model meets the market condition. The expected term period represents the time used as an input in the embedded Black-Sholes pricing model which is based on the midpoint between the vest and expiration dates for each tranche.

13.	401(k) Plan

The Company sponsors a 401(k) plan (the “Plan”) covering substantially all employees of the Company. The Plan allows employees to contribute tax deferred salary deductions into the Plan under the provisions of Section 401(k) of the Internal Revenue Code. Matching contributions are made by the Company up to a maximum amount of 3% of employee contributions, subject to certain limitations as defined in the Plan. The Company made matching contributions of $0.16 million for the year ended December 31, 2020. There were no contributions for the year ended December 31, 2019.

14.	Income Taxes

The provision for income tax expense included on the consolidated statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019 consists of the following:

	2020			2019
	(In thousands)
Current tax expense — federal and state	$	—		$	—
Deferred tax benefit		(12,002	)		(9,552	)
Increase in deferred tax valuation allowance		12,002			9,552
Total tax expense	$	—		$	—

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

14.	Income Taxes (continued)

The components of the net deferred tax asset as of December 31, 2020 and 2019 are as follows:

	2020			2019
	(In thousands)
Deferred tax assets:
Net operating loss carryforwards	$	4,427		$	7,248
Research and development tax credits		698			2,448
Capitalized research and development costs		16,030			44
Deferred start-up costs		198			100
Stock-based compensation		341			0
Other		529			2
Total deferred tax assets		22,223			9,842
Deferred tax liabilities:
Unrealized gain on marketable securities		(474	)		(92	)
Other		(1	)		(4	)
Total deferred tax liabilities		(475	)		(96	)
Valuation allowance		(21,748	)		(9,746	)
Net deferred tax assets	$	—		$	—

A reconciliation between the Company’s effective tax rate and the federal statutory rate for the years ended December 31, 2020 and 2019 are as follows:


Federal statutory rate	(21.00	)%	(21.00	)%
State income taxes, net of federal benefit	(9.40	)%	(0.86	)%
Permanent differences	1.46	%	0.02	%
Other items	(0.05	)%	0.10	%
Valuation allowance	28.99	%	21.74	%
Effective tax rate	0.00	%	0.00	%

Realization of future tax benefits related to the deferred tax assets is dependent on many factors, including the Company’s ability to generate future taxable income. Management has considered the Company’s history of cumulative net losses incurred since inception and its lack of commercialization of any products or generation of any revenue from product sales since inception and has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets. Accordingly, a full valuation allowance has been established against the deferred tax assets as of December 31, 2020 and 2019.

Cumulative net operating losses available to offset future federal and state taxable income is approximately $14.6 million and $22.8 million respectively. The federal net operating losses may be carried forward indefinitely. The federal tax credit carryforward is approximately $0.7 million. The federal research and development credit, and the city and state net operating losses can be carried forward for 20 years and begin to expire in the year 2038. There are no state research and development credits to be carried forward.

Because of the change in ownership provisions within the Internal Revenue Code, the use of a portion of the net operating losses and tax credit carryforwards may be limited in future periods.

NUVATION BIO INC. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

14.	Income Taxes (continued)

As of December 31, 2020 and 2019, the Company had no liability recorded for unrecognized tax benefits.

15.	Commitments and Contingencies

Commitments

The Company leases its office space under non-cancellable operating lease agreements. This lease also requires the Company to pay real estate taxes and other operational expenses associated with the leased location and is included in rent expense. The effect of graduating rents, net of the rent credits, is being amortized over the life of the lease so as to result in equal monthly rent expense over the lease term. Deferred rent liability reported in the accompanying consolidated balance sheets represents the cumulative excess of straight-line rental costs over the actual rental payments.

Future minimum lease payments under the operating leases as of December 31, 2020, are as follows:

Year ending December 31,
(In thousands)
2021	$	1,229
2022		1,013
2023		552
2024		599
2025		615
Thereafter		711
	$	4,719

Rent expense was $1.3 million and $0.4 million for the years ended December 31, 2020 and 2019, respectively.

The Company has a standby letter of credit with a bank in the amount of $0.5 million which serves as security for the New York space operating lease. The standby letter of credit automatically renews annually.

Contingencies

From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no pending significant legal proceedings to which the Company is a party, for which management believes the ultimate outcome would have a material adverse effect on the Company’s financial position.

16.	Subsequent Event

Merger

On February 10, 2021 (the “Closing Date”), Nuvation Bio Inc. (“Legacy Nuvation Bio”), Panacea Acquisition Corp. (“Panacea”), whose shares are publicly traded, and Panacea Merger Subsidiary Corp, a wholly owned subsidiary of Panacea (“Merger Sub”), consummated the merger of Merger Sub with and into Legacy Nuvation Bio, with Legacy Nuvation Bio surviving as a wholly owned subsidiary of Panacea (the “Merger” and, collectively with the other transactions described in the Merger

EX-99.2

Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provide information which our management believes is relevant to an assessment and understanding ofour consolidated results of operations and financial condition. You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and notes thereto filed asExhibit 99.1 to the Current Report on Form 8-K to which this Exhibit is filed. In addition to historical financial information, this discussion contains forward-looking statements based upon our current expectations that involve risks anduncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled “Risk Factors” in our prospectus.Please also see the section titled “Special Note Regarding Forward-Looking Statements.”

Overview

We are a clinical-stage biopharmaceutical company tackling some of the greatest unmet needs in oncology by developing differentiated and novel therapeutic candidates. We were founded by our chief executive officer, David Hung, M.D., who founded Medivation, Inc. and led its successful development of oncology drugs Xtandi^®^ and talazoparib (now marketed as Talzenna^®^), leading to its $14.3 billion sale to Pfizer Inc. (“Pfizer”) in 2016. We leverage our team’s extensive expertise in medicinal chemistry and drug development to pursue targets validated by strong clinical or preclinical data in oncology and discover novel small molecules that improve the activity and overcome the liabilities of currently marketed drugs or best-in-development therapeutic candidates. In addition to our focus on development of small molecules for validated targets, we are also developing novel therapeutic candidates based on our Drug-Drug Conjugate platform. Utilizing this platform, we are able to conjugate tissue-selective targeted small molecules with anti-tumor agents to create unique therapeutic candidates. We began treating high-grade glioma patients in a Phase 1/2 clinical trial of our lead product candidate in December 2020 and expect to report top-line data from the Phase 1 portion of this trial in 2022. We plan to initiate multiple other Phase 1 trials through 2022 and submit up to an additional five investigational new drug (“IND”) applications over the next six years across our pipeline of therapeutic product candidates.

Business Combination and Public Company Costs

In October 2020, Legacy Nuvation Bio entered into the Business Combination Agreement with Panacea and Merger Sub pursuant to which Merger Sub was merged with and into Legacy Nuvation Bio, with Legacy Nuvation Bio surviving the merger as a wholly-owned subsidiary of Panacea. The transaction provided us with approximately $646 million of gross proceeds, including $476.6 million from the PIPE. At a special meeting of Panacea stockholders held on February 9, 2021, the Business Combination Agreement Investment was approved and adopted, and the merger and all other transactions contemplated by the Business Combination Agreement were approved. On February 10, 2021, the Business Combination was consummated pursuant to the Business Combination Agreement, Panacea changed its name to Nuvation Bio Inc. and our financial statements became those of Panacea. Following the Closing, Legacy Nuvation Bio was deemed the accounting predecessor and will be the successor registrant for SEC purposes, meaning that Legacy Nuvation Bio’s financial statements for previous periods will be disclosed in our future periodic reports filed with the SEC.

While the legal acquirer in the Business Combination Agreement is Panacea, for financial accounting and reporting purposes under U.S. GAAP, Legacy Nuvation Bio was the accounting acquirer and the Business Combination was accounted for as a “reverse recapitalization.” A reverse recapitalization (i.e., a capital transaction involving the issuance of stock by Panacea for Legacy Nuvation Bio’s stock) does not result in a new basis of accounting, and the consolidated financial statements of the combined entity represent the continuation of the consolidated financial statements of Legacy Nuvation Bio in many respects. Accordingly, the consolidated assets, liabilities and results of operations of Legacy Nuvation Bio became the historical consolidated financial statements of the combined company, and Panacea’s assets, liabilities and results of operations were consolidated

with those of Legacy Nuvation Bio beginning on the acquisition date. Operations prior to the Business Combination will be presented as those of Legacy Nuvation Bio in future reports. The net assets of Panacea were recognized at historical cost (which is expected to be consistent with carrying value), with no goodwill or other intangible assets recorded.

Upon consummation of the Business Combination and the closing of the PIPE Investment, the most significant change in the post-combination company’s future reported financial position is an increase in cash and cash equivalents (as compared to Legacy Nuvation Bio’s condensed consolidated balance sheet at December 31, 2020) primarily due to $476.6 million in gross proceeds from the PIPE Investment. See the section titled “Unaudited Pro Forma Condensed Combined Financial Information.”

As a consequence of the Business Combination, we became the successor to an SEC-registered and NYSE-listed company, which requires us to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We expect to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting, legal and administrative resources, including increased audit and legal fees.

Our future results of consolidated operations and financial position may not be comparable to historical results as a result of the Business Combination.

COVID-19 Business Update

The global COVID-19 pandemic continues to rapidly evolve, and we will continue to monitor the COVID-19 situation closely. To date our financial condition and operations have not been significantly impacted by the COVID-19 impact. However, we cannot, at this time, predict the specific extent, duration or full impact that the COVID-19 outbreak will have on our financial condition and operations, including our ongoing and planned preclinical and clinical trials. The extent of the impact of the COVID-19 on our business, operations and clinical development timelines and plans remains uncertain and will depend on certain developments, including the duration and spread of the outbreak and its impact on our clinical trial enrollment, trial sites, contract research organizations (“CROs”), third-party manufacturers, and other third parties with whom we do business, as well as its impact on regulatory authorities and our key scientific and management personnel. To the extent possible, we are conducting business as usual, with necessary or advisable modifications to employee travel as many of our employees are working remotely. We will continue to actively monitor the rapidly evolving situation related to COVID-19 and may take further actions that alter our operations, including those that may be required by federal, state or local authorities, or that we determine are in the best interests of our employees and other third parties with whom we do business. The development of our product candidates could be disrupted and materially adversely affected in the future by the COVID-19 pandemic. Our planned clinical trials also could be delayed due to government orders and site policies on account of the pandemic, and some patients may be unwilling or unable to travel to study sites, enroll in our trials or be unable to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services, which would delay our ability to conduct clinical trials or release clinical trial results and could delay our ability to obtain regulatory approval and commercialize our product candidates. Furthermore, COVID-19 could affect our employees or the employees of research sites and service providers on whom we rely, including CROs, as well as those of companies with which we do business, including our suppliers and contract manufacturing organizations, thereby disrupting our business operations. Quarantines and travel restrictions imposed by governments in the jurisdictions in which we and the companies with which we do business operate could materially impact the ability of employees to access preclinical and clinical sites, laboratories, manufacturing site and office. These and other events resulting from the COVID-19 pandemic could disrupt, delay, or otherwise adversely impact our business. Further information relating to the risks and uncertainties related to the ongoing COVID-19 pandemic are contained in the section titled “Risk Factors” in this prospectus.

Financial Overview

Since our inception in 2018, we have focused substantially all of our resources on conducting research and development activities, including drug discovery and preclinical studies, establishing and maintaining our intellectual property portfolio, the manufacturing of clinical and research material, developing our in-house manufacturing capabilities, hiring personnel, raising capital and providing general and administrative support for these operations. We have not recorded revenue from product sales or collaboration activities, or any other source. We have funded our operations to date primarily from convertible notes and the issuance and sale of our common and preferred stock.

We have incurred net losses in each year since inception. Our net losses were $41.7 million and $33.6 million for 2020 and 2019, respectively. As of December 31, 2020, we had an accumulated deficit of $76.0 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses over at least the next several years. We expect our expenses will increase substantially in connection with our ongoing activities, as we:

•	advance product candidates through clinical trials;
•	pursue regulatory approval of product candidates;
---	---
•	operate as a public company;
---	---
•	continue our preclinical programs and clinical development efforts;
---	---
•	continue research activities for the discovery of new product candidates; and
---	---
•	manufacture supplies for our preclinical studies and clinical trials.
---	---

In addition, we expect to incur additional costs associated with operating as a public company, including significant legal, audit, accounting, regulatory, tax-related, director and officer insurance, investor relations and other expenses that we did not incur as a private company. As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the public or private sale of equity, government or private party grants, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions. If we are unable to obtain additional funding, we could be forced to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion or any commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations. If we raise funds through strategic collaborations or other similar arrangements with third parties, we may have to relinquish valuable rights to our platform technology, future revenue streams, research programs or product candidates or may have to grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic or other events. Because of the numerous risks and uncertainties associated with product development, we cannot predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability.

Components of Results of Operations

Research and Development Expenses

Research and development expenses include:

•	expenses incurred under agreements with third-party contract organizations, and consultants;<br>
•	costs related to production of drug substance, including fees paid to contract manufacturers;<br>
---	---

•	laboratory and vendor expenses related to the execution of preclinical trials; and
•	employee-related expenses, which include salaries, benefits and stock-based compensation.
---	---

We expense all research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks and estimates of services performed using information and data provided to us by our vendors and third-party service providers. Nonrefundable advance payments for goods or services to be received in future periods for use in research and development activities are deferred and capitalized. The capitalized amounts are then expensed as the related goods are delivered and as services are performed. We expense in-process research and development projects acquired as part of asset acquisitions that have no alternative future use.

To date, the majority of these expenses have been incurred to advance our lead product candidate, NUV-422.

We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates, as our product candidates advance into later stages of development, and as we begin to conduct clinical trials. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related costs, facilities costs, depreciation and amortization expenses and professional services expenses, including legal, human resources, audit and accounting services. Personnel-related costs consist of salaries, benefits and stock-based compensation. Facilities costs consist of rent and maintenance of facilities. We expect our general and administrative expenses to increase for the foreseeable future due to anticipated increases in headcount to advance our product candidates and as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, NYSE, additional insurance expenses, investor relations activities and other administrative and professional services.

Other Income (Expense), Net

Other income (expense) primarily consists of interest earned on our cash equivalents and investments and interest expense related to convertible notes

Results of Operations

Years EndedDecember 31, 2020 and 2019

	Years EndedDecember 31,					Increase /(Decrease)
	2020		2019
	(In thousands)
Operating expenses:
Research and development	$	32,603	$	25,106		$	7,497
General and administrative		10,948		6,993			3,955
Total operating expenses		43,551		32,099			11,452
Loss from operations		(43,551)		(32,099	)		(11,452)
Other income (expense), net		1,892		(1,453	)		3,345
Net loss	$	(41,659)	$	(33,552	)	$	(8,107)

Research and Development Expenses

Research and development expenses increased by $7.5 million for the year ended December 31, 2020 compared to 2019. The increase was primarily due to a $9.4 million increase in third-party costs related to research services and manufacturing to advance our current preclinical programs, as well as a $7.8 million increase in personnel-related costs driven by an increase in headcount and stock-based compensation, offset by a $9.7 million decrease in asset acquisition costs which we incurred in the prior period related to the purchase of in-process research and development.

General and Administrative Expenses

General and administrative expenses increased by $4.0 million for the year ended December 31, 2020, compared to 2019. The increase was primarily due to a $3.0 million increase in personnel-related costs driven by an increase in headcount and stock-based compensation, a $0.9 million increase in rent expense, a $1.0 million increase in professional fees, a $0.6 million increase in legal fees and a $0.3 million increase in other miscellaneous expenses, partially offset by a $2.0 million decrease in consulting fees related to financing strategies.

Other Income (Expense), Net

Other income (expense), net increased by $3.3 million for the year ended December 31, 2020 compared to 2019. Net income from investments increased by $0.7 million in 2020 primarily because of interest earned over a twelve-month period compared to a six-month period in 2019. Also, non-cash interest expense was zero for the year ended December 31, 2020 compared to $2.7 million in 2019 because outstanding convertible notes were converted to Series A preferred stock in 2019.

Liquidity, Capital Resources and Plan of Operations

Since our inception through December 31, 2020, our operations have been financed primarily by the sale of convertible promissory notes and the sale and issuance of Series A preferred stock and common stock, which resulted in net proceeds of $288.0 million. As of December 31, 2020, we had $215.8 million in cash and investments and an accumulated deficit of $76.0 million.

Our primary use of cash is to fund operating expenses, which consist of research and development expenses related to our lead product candidate, NUV-422, and preclinical programs, and to a lesser extent, general and administrative expenses. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Based upon our current operating plan, we believe that our existing cash investments as of December 31, 2020, will enable us to fund our operating expenses and capital expenditure requirements through at least the next 12 months from the date of this prospectus.

We expect to incur substantial expenses in the foreseeable future for the development and potential commercialization of our product candidates and ongoing internal research and development programs. At this time, we cannot reasonably estimate the nature, timing or aggregate amount of costs for our development, potential commercialization, and internal research and development programs. However, in order to complete our current and future preclinical studies and clinical trials, and to complete the process of obtaining regulatory approval for our product candidates, as well as to build the sales, marketing and distribution infrastructure that we believe will be necessary to commercialize our product candidates, if approved, we may require substantial additional funding in the future.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

	Years Ended December 31,
	2020		2019
	(In thousands)
Cash used in operating activities	$	(36,529)	$	(24,432	)
Cash used in investing activities		(70,320)		(115,855	)
Cash provided by financing activities		133,135		143,618
Net increase in cash and cash equivalents		26,286	$	3,331

Operating Activities

In 2020, cash used in operating activities of $36.5 million was attributable to a net loss of $41.7 million, partially offset by non-cash charges of $3.0 million and a net change of $2.1 million in our net operating assets and liabilities. The non-cash charges consisted primarily of stock-based compensation of $2.2 million and amortization of premium on marketable securities of $0.9 million. The change in operating assets and liabilities was primarily due to a $2.9 million increase in accrued expenses driven by increased accrued employee compensation.

In 2019, cash used in operating activities of $24.4 million was attributable to a net loss of $33.6 million partially offset by $7.6 million in non-cash charges and a net change of $1.5 million in our net operating assets and liabilities. The non-cash charges consisted of $4.7 million in expense related to the issuance of common stock for the purchase of in-process research and development, and non-cash interest expense of $2.7 million. The change in operating assets and liabilities was primarily due to a $2.9 million increase in accounts payable and accrued expenses resulting from increases in our operating activities, primarily in research and development. This was partially offset by a $1.4 million decrease in prepaid expenses and other current assets resulting from the timing of prepayments made for research and development activities, receipt of interest receivable on marketable securities and payment of security deposit for the lease.

Investing Activities

In 2020, cash used for investing activities of $70.3 million was related to the purchase of marketable securities of $143.3 million, partially offset by $73.1 million of proceeds from the sale of marketable securities and investments held to maturity.

In 2019, cash used for investing activities of $115.9 million was related to the purchase of marketable securities of $136.2 million, a certificate of deposit for $2.5 million, and property and equipment for $0.7 million, partially offset by $23.5 million of proceeds from the sale of marketable securities.

Financing Activities

In 2020, cash provided by financing activities of $133.1 million was related to net proceeds of $135.7 million from the issuance of preferred stock, partially offset by $2.5 million of deferred financing costs related to the Business Combination.

In 2019, cash provided by financing activities of $143.6 million was related to net proceeds of $124.2 million from the issuance of preferred stock, $15.0 million of proceeds from the issuance of convertible debt and $5.0 million from the issuance of common stock, partially offset by repayment of loan payable to stockholder for $0.6 million.

Contractual Obligations and Commitments

The following table summarizes our commitments and contractual obligations as of December 31, 2020:

	Payments Due By Period
	Total		Less than 1Year		1-3 Years		3-5 Years		Morethan5 Years
	(In thousands)
Operating lease obligations	$	4,719	$	1,229	$	1,565	$	1,214	$	711
Agreement with Sparcbio		5,000		5,000	$	0	$	0	$	0
Total	$	9,719	$	6,229	$	1,565	$	1,214	$	711

We enter into agreements in the normal course of business with vendors for preclinical and clinical studies and other service providers for operating purposes. We have not included these payments in the table of contractual obligations above since these contracts are generally cancelable at any time by us following a certain period after notice and therefore, we believe that our non-cancelable obligations under these agreements are not material.

Off-Balance Sheet Arrangements

As of December 31, 2020 and, 2019, we did not have any off-balance sheet arrangements, as defined in Regulation S-K, Item 303(a)(4)(ii).

Critical Accounting Policies and Significant Judgments and Estimates

Our management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses. On an on-going basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

While our significant accounting policies are described in the notes to our consolidated financial statements, we believe that the following critical accounting policies are most important to understanding and evaluating our reported financial results.

Research and DevelopmentExpenses

Stock-Based Compensation Expense

We estimate the fair value of our stock-based awards to employees and non-employees that are based on a service condition only using the Black-Scholes option-pricing model, which is impacted by our common stock price as well as other variables including, but not limited to, expected term that options will remain outstanding, expected common stock price volatility over the term of the option awards, risk-free interest rates and expected dividends.

We determine the fair value of stock-based awards that are based on both a service condition and achievement of the first to occur of a market or performance condition using a Monte Carlo simulation.

The fair value of a stock-based award is recognized over the period during which a recipient is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period) on a straight-line basis. Stock-based compensation expense is recognized based on the fair value determined on the date of grant and is reduced for forfeitures as they occur.

Estimating the fair value of stock-based awards as of the grant date using valuation models, such as the Black-Scholes option pricing model, is affected by assumptions regarding a number of variables. Changes in the assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized. These inputs are subjective and generally require significant analysis and judgment to develop.

Expected Term—We have opted to use the “simplified method” for estimating the expected term of options whose vesting is based on service condition only, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option (generally 10 years).

Expected Volatility—Due to our limited operating history and a lack of company specific historical and implied volatility data, we have based our estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded.

Risk-Free Interest Rate—The risk-free rate assumption is based on the U.S. Treasury instruments with maturities similar to the expected term of our stock options at the time of the grant.

Expected Dividend—We have not issued any dividends in our history and do not expect to issue dividends over the life of the options and therefore have estimated the dividend yield to be zero.

We will continue to use judgment in evaluating the expected volatility, and interest rates utilized for our stock-based compensation expense calculations on a prospective basis.

Common Stock Valuations

All options to purchase shares of our common stock are intended to be exercisable at a price per share not less than the per-share fair value of our common stock underlying those options on the date of grant. In the absence of a public trading market for our common stock, on each grant date, our board of directors made a reasonable determination of the fair value of our common stock based on the information known to us on the date of grant, upon a review of any recent events and their potential impact on the estimated fair value per share of the common stock, and timely valuations from an independent third-party valuation firm in accordance with guidance provided by the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. The methodology to determine the fair value of our common stock included estimating the fair value of the enterprise using a market approach, which estimates the fair value of the company by including an estimation of the value of the business based on guideline public companies under a number of different scenarios. The assumptions used to determine the estimated fair value of our common stock are based on numerous objective and subjective factors, combined with management judgment, including:

•	external market conditions affecting the pharmaceutical and biotechnology industry and trends within the<br>industry;
•	our stage of development;
---	---
•	the rights, preferences and privileges of our convertible preferred stock relative to those of our common stock;<br>
---	---

•	the prices at which we sold shares of our convertible preferred stock;
•	our financial condition and operating results, including our levels of available capital resources;<br>
---	---
•	the progress of our research and development efforts, our stage of development and business strategy;<br>
---	---
•	risk inherent in the development of our product candidates;
---	---
•	equity market conditions affecting comparable public companies;
---	---
•	general U.S. market conditions; and
---	---
•	the lack of marketability of our common stock.
---	---

We engaged a third-party valuation firm to assist us in conducting a valuation of our common stock as of September 24, 2019. We utilized the option-pricing method (“OPM”) to backsolve to our June 2019 Series A preferred stock financing to derive the implied equity value for our common stock. Based on our early stage of development and other relevant factors, we determined that the OPM backsolve was the most appropriate method for allocating our enterprise value to determine the estimated fair value of our common stock. We estimated a weighted-average time to an exit (liquidity) event of four years, which was our best estimate for a potential exit scenario for the investors. Volatility of 85.0% was assumed based on an analysis of guideline public companies’ historical equity volatility for the time to an exit. The risk-free rate assumption of 1.519% was based on the yield of similar duration U.S. Treasury bonds. A discount for lack of marketability of 40.0% was applied to the calculated common price per share to arrive at a common stock price per share of $0.34. Our board of directors considered this valuation, and the other factors set forth above, for stock-based awards granted from January 2020 through early September 2020 because there was no significant change to our business since the close of our Series A preferred stock financing.

We also engaged a third-party valuation firm to assist us in conducting a valuation of our common stock as of September 8, 2020. We utilized a hybrid of OPM and the probability-weighted expected return method (“PWERM”). We incorporated the PWERM because we received a letter of intent for our merger in early September 2020, indicating our value to be approximately $1.5 billion. This exit was modeled as one of two scenarios, the merger scenario, with the other scenario being that the merger does not go as planned and that we continue to operate until a later exit, the going concern scenario. Using PWERM for the merger scenario, we present-valued the $1.93 implied value per share of the merger back from the 0.44 year expected time to exit, resulting in the value per share of $1.75 as of the valuation date. Then, a 25% discount for lack of marketability was applied to get to the concluded $1.31 per share under this scenario. Under the going concern scenario, we utilized OPM to backsolve to our June 2019 Series A preferred stock financing to derive the implied equity value for our common stock. We estimated a weighted-average time to an exit (liquidity) event of four years, which was our best estimate for a potential exit scenario for the investors. Volatility of 85.0% was assumed based on an analysis of guideline public companies’ historical equity volatility for the time to an exit and the risk-free rate assumption of 1.519%. We applied a 30% adjustment to equity value to account for market and company-specific changes since the close of the financing. The results of the OPM and PWERM were probability weighted to arrive at the fair value of our common stock of $0.90. Our board of directors considered this valuation, and the other factors set forth above, for stock-based awards granted after the execution of the letter of intent for the merger in September 2020 through the execution of the Business Combination Agreement in October 2020.

After the Business Combination Agreement was executed on October 20, 2020, our board of directors made a determination that, prior to the consummation of the Business Combination, the fair market value of Legacy Nuvation Bio’s common stock would be equal to the estimated exchange ratio of one share of Legacy Nuvation Bio’s common stock for one share of Panacea’s Class A common stock under the Business Combination Agreement multiplied by the fair market value of the Panacea Class A common stock as of the date of the option grant. The exercise prices for stock options granted after the Business Combination Agreement was executed on October 20, 2020 through December 31, 2020 ranged from $1.99 to $2.03. After the closing of the Business Combination, our board of directors will determine the fair value of each share of Class A common stock underlying stock-based awards based on the closing price of our Class A common stock as reported by NYSE on the date of grant.

Qualitative and Quantitative Disclosures about Market Risk

Interest Rate Risk

We had cash and investments of $215.8 million as of December 31, 2020, consisting of cash, money market funds, government securities, and corporate bonds. To date, fluctuations in interest income have not been significant.

We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates.

Foreign Currency Risk

Our expenses are generally denominated in U.S. dollars. A 10% increase or decrease in current exchange rates would not have a material effect on our financial results.

Emerging Growth Company Status

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act. Pursuant to the JOBS Act, an emerging growth company is provided the option to adopt new or revised accounting standards that may be issued by FASB or the SEC either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. We have elected to take advantage of the exemption for complying with new or revised accounting standards within the same time periods as private companies. Accordingly, the information contained herein may be different than the information you receive from other public companies.

We also intend to take advantage of some of the reduced regulatory and reporting requirements of emerging growth companies pursuant to the JOBS Act so long as we qualify as an emerging growth company, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, and reduced disclosure obligations regarding executive compensation. See the section titled “Prospectus Summary—Implications of Being an Emerging Growth Company and Smaller Reporting Company” in this prospectus for more information.

Recent Accounting Pronouncements

See the sections titled “Significant Accounting Policies—Accounting pronouncements not yet adopted” in Note 2 to our consolidated financial statements for the years ended December 31, 2019 and 2020 appearing elsewhere in this prospectus.

EX-99.3

Exhibit 99.3

SUMMARY UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL INFORMATION

The following summary unaudited pro forma condensed combined financial information has been derived from the unaudited pro forma condensed combined balance sheet as of December 31, 2020 and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2020 included in “Unaudited Pro Forma Condensed Combined FinancialInformation.”

The summary unaudited pro forma condensed combined financial information should be read in conjunction with the unaudited pro forma condensed combined balance sheet and the unaudited pro forma condensed combined statement of operations, and the accompanying notes. In addition, the unaudited condensed combined pro forma financial information was based on and should be read in conjunction with the historical financial statements of Panacea and Legacy Nuvation Bio, including the accompanying notes, which are included elsewhere in this proxy statement/prospectus.

The merger will be accounted for as a reverse capitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, Panacea is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of the combined entity will represent a continuation of the financial statements of Legacy Nuvation Bio with the Business Combination being treated as the equivalent of Legacy Nuvation Bio issuing stock for the net assets of Panacea, accompanied by a recapitalization. The net assets of Panacea are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the merger are those of Legacy Nuvation Bio.

The unaudited pro forma statement of operations data has been prepared to assuming actual redemptions of 3,350 shares of Panacea Class A common stock for $10 per share or an aggregate redemption amount of less than $0.1 million.

	Historical						Pro Forma
	Panacea			Legacy NuvationBio			Combined
Statement of Operations Data — For the Year Ended December 31, 2020
Total operating expenses	$	3,061		$	43,551		$	42,934
Loss from operations		(3,061	)		(43,551	)		(42,934	)
Net loss		(3,054	)		(41,659	)		(41,035	)
Total comprehensive loss		(3,054	)		(40,523	)		(39,899	)
Basic and diluted net loss per share, Class A redeemable common stock		—			—			—
Basic and diluted net loss per share, Class B common stock		(0.80	)		—			—
Basic and diluted net loss per share, common stock					(0.23	)		(0.21	)
	Historical					Pro Forma
---	---	---	---	---	---	---	---
	Panacea		Legacy NuvationBio			Combined
Balance Sheet Data — As of December 31, 2020
Total current assets	$	1,247	$	220,683		$	845,545
Total assets		145,004		221,792			846,654
Total current liabilities		2,799		6,551			9,350
Total liabilities		2,799		6,708			9,507
Redeemable convertible preferred stock		—		267,521			—
Class A common stock, subject to possible redemption		137,205		—			—
Total stockholders’ equity (deficit)		5,000		(52,437	)		837,147

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined balance sheet of Nuvation Bio (as defined in Note 1 below) as of December 31, 2020 and the unaudited pro forma condensed combined statements of operations of Nuvation Bio for the year ended December 31, 2020 present the combination of the financial information of Panacea (as defined in Note 1 below) and Legacy Nuvation Bio after giving effect to the merger (as defined in Note 1 below), the private placement of shares of Panacea Class A common stock being issued at the closing of the merger (the “PIPE investment”), the forward purchase agreement (collectively, the “transactions”) and related adjustments described in the accompanying notes.

The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2020 give pro forma effect to the transactions as if they had occurred on January 1, 2020. The unaudited pro forma condensed combined balance sheet as of December 31, 2020 gives pro forma effect to the transactions as if they were completed on December 31, 2020.

The unaudited pro forma condensed combined financial information is based on and should be read in conjunction with the audited and unaudited historical financial statements of each of Panacea and Legacy Nuvation Bio and the respective notes thereto, as well as the disclosures contained in the sections titled “Panacea’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Nuvation Bio’s Management’s Discussion andAnalysis of Financial Condition and Results of Operations.”

The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and do not necessarily reflect what Nuvation Bio’s financial condition or results of operations would have been had the transactions occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of Nuvation Bio. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma condensed combined financial statements and are subject to change as additional information becomes available and analyses are performed.

On February 10, 2021, Panacea, Legacy Nuvation Bio Inc., and the Merger Sub (as defined in Note 1 below) consummated the transactions contemplated by the Merger Agreement (as defined in Note 1 below) dated October 20, 2020. Pursuant to the Merger Agreement, at the closing of the transactions contemplated by the Merger Agreement, and in accordance with the Delaware General Corporation Law, the Merger Sub merged with and into Nuvation Bio, the separate corporate existence of the Merger Sub ceased and Nuvation Bio became the surviving corporation and a direct, wholly owned subsidiary of Panacea. On the date of the closing of the merger, Panacea changed its name to “Nuvation Bio Inc.” together with its subsidiaries.

Based on its initial analysis, management did not identify any differences in accounting policies that would have a material impact on the unaudited pro forma condensed combined financial information. As a result, the unaudited pro forma condensed combined financial information does not assume any differences in accounting policies. Subsequent to the closing, management will perform a comprehensive review of the two entities’ accounting policies. As a result of the review, management may identify differences between the accounting policies of the two entities which, when conformed, could have a material impact on the financial statements of the surviving corporation.

NUVATION BIO

UNAUDITED PRO FORMA CONDENSED

COMBINED BALANCE SHEET

DECEMBER 31, 2020

(in thousands)

	Panacea(Historical)			NuvationBio(Historical)			Pro FormaAdjustments					Pro FormaCombined
ASSETS
Current Assets:
Cash and cash equivalents	$	908		$	29,755		$	626,540		(A	)	$	657,203
Available-for-sale<br>securities		—			185,997			—					185,997
Interest receivable on marketable securities		—			1,092			—					1,092
Prepaid expenses and other current assets		339			914			—					1,253
Deferred financing costs		—			2,925			(2,925	)	(B	)		—
Total current assets		1,247			220,683			623,615					845,545
Cash held in Trust Account		143,757			—			(143,757	)	(C	)		—
Property and equipment, net		—			688			—					688
Other long-term assets		—			421			—					421
Total assets	$	145,004	****	$	221,792	****	$	479,858	****			$	846,654	****
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	4		$	2,171		$	—					2,175
Accrued expenses and other current liabilities		2,795			4,380			—					7,175
Total current liabilities		2,799			6,551			—					9,350
Deferred rent, noncurrent		—			157			—					157
Total liabilities		2,799			6,708			—					9,507
Redeemable and preferred stock
Nuvation Bio Redeemable convertible preferred stock		—			267,521			(267,521	)	(D	)		—
Panacea Class A common stock, subject to possible redemption		137,205			—			(137,205	)	(E	)		—
Stockholders’ equity (deficit)
Preferred stock		—			—			—					—
Panacea Class A common stock		—			—			—					—
Panacea Class B common stock		—			—			—					—
Legacy Nuvation Bio common stock		—			21,961			(21,961	)	(F	)		—
Nuvation Bio Class A common stock		—			—			21		(G	)		21
Nuvation Bio Class B common stock		—			—			—					—
Additional paid-in capital		8,054			—			905,119		(H	)		913,173
Accumulated other comprehensive income (loss)		—			1,557			—					1,557
Retained earnings (accumulated deficit)		(3,054	)		(75,955	)		1,405		(I	)		(77,604	)
Total stockholders’ equity (deficit)		5,000			(52,437	)		884,585					837,147
Total liabilities, redeemable and preferred stock, and stockholders’ equity(deficit)	$	145,004	****	$	221,792	****	$	479,858	****			****	846,654	****

NUVATION BIO

UNAUDITED PRO FORMA CONDENSED COMBINED

STATEMENT OF OPERATIONS FOR THE YEAR

ENDED DECEMBER 31, 2020

(In thousands, except share and per share amounts)

	Panacea(Historical)			NuvationBio(Historical)			Pro FormaAdjustments(Assuming NoRedemptions)					Pro FormaCombined(Assuming NoRedemptions)
Operating expenses:
Research and development		—			32,603			—					32,603
General and administrative		3,061			10,948			(3,678	)	(J	)		10,331
Total operating expenses		3,061			43,551			(3,678	)				42,934
Loss from operations		(3,061	)		(43,551	)		3,678					(42,934	)
Other income (expense):
Interest income		7			1,945			—					1,952
Investment advisory fees		—			(271	)		—					(271	)
Realized loss on marketable securities		—			218								218
Loss before income taxes		(3,054	)		(41,659	)		3,678					(41,035	)
Provision for income taxes		—			—			—					—
Net income (loss)	$	(3,054	)	$	(41,659	)	$	3,678				$	(41,035	)
Deemed dividend related to beneficial conversion feature and accretion of discount on Redeemable<br>Series A Convertible Preferred Stock	$	—		$	(22,622	)	$	22,622		(K	)	$	—
Net loss attributable to common stockholders	$	(3,054	)	$	(64,281	)	$	26,300				$	(41,035	)
Basic and diluted weighted average Class A redeemable common stock outstanding		14,375,000			—								—
Basic and diluted net loss per share, Class A redeemable stock	$	—		$	—							$	—
Basic and diluted weighted average Class B common stock outstanding		3,840,179			—								—
Basic and diluted net loss per share, Class B common stock	$	(0.80	)	$	—							$	—
Basic and diluted weighted average common shares outstanding,		—			277,529,317								193,360,131
Basic and diluted net loss per share	$	—		$	(0.23	)						$	(0.21	)

Note 1 — Description of the Merger

On February 10, 2021, (the “Closing Date”), Nuvation Bio Inc., a Delaware corporation (“Legacy Nuvation Bio”), Panacea Acquisition Corp. (“Panacea”) , and Panacea Merger Subsidiary Corp, a Delaware corporation and a direct, wholly owned subsidiary of Panacea (the “Merger Sub”) consummated the transactions contemplated by an Agreement and Plan of Merger among them dated October 20, 2020 (“Merger Agreement”).

Pursuant to the terms of the Merger Agreement, a business combination of Panacea and Legacy Nuvation Bio was effected through the merger of Merger Sub with and into Legacy Nuvation Bio, with Legacy Nuvation Bio surviving as a wholly owned subsidiary of Panacea (the “Merger” and, collectively with the other transactions described in the Merger Agreement, the “Business Combination”). On the Closing Date, Legacy Nuvation Bio changed its name to Nuvation Bio Operating Company Inc. and Panacea changed its name from Panacea Acquisition Corp. to Nuvation Bio Inc. (the “Company” or “Nuvation Bio”).

In connection with the Business Combination, holders of 3,350 shares of Panacea Class A common stock, exercised their right to redeem their shares for cash at a redemption price of approximately $10.00 per share, for an aggregate redemption amount of $33,502.

On the Closing Date, a number of purchasers (each, a “Subscriber”) purchased from the Company an aggregate of 47,655,000 shares of Class A Common Stock (the “PIPE Shares”), for a purchase price of $10.00 per share and an aggregate purchase price of approximately $476.6 million, pursuant to separate subscription agreements (each, a “Subscription Agreement”) entered into concurrently with the Merger Agreement, effective as of October 20, 2020. Pursuant to the Subscription Agreements, the Company gave certain registration rights to the Subscribers with respect to the PIPE Shares.

Additionally, on the Closing Date, certain purchasers purchased 2,500,000 shares of Class A Common Stock and 833,333 forward purchase warrants (the “Forward Purchase Securities”) in a private placement at a price of $10.00 per share for an aggregate purchase price of $25.0 million (the “Forward Purchase”) pursuant to the terms of the forward purchase agreement (the “Forward Purchase Agreement”) that Panacea entered into in connection with Panacea’s initial public offering. The sales of the PIPE Shares and the Forward Purchase Securities were consummated concurrently with the closing of the Business Combination (the “Closing”).

At the effective time of the merger (the “Effective Time”), by virtue of the merger and without any action on the part of Panacea, Merger Sub, Nuvation Bio or the holders of any of Nuvation Bio’s securities:

(a)

each share of Legacy Nuvation Bio Class A common stock and each share of Legacy Nuvation Bio Series A preferred stock issued and outstanding immediately prior to the Effective Time was converted and exchanged for approximately 0.196 shares (the “Exchange Ratio”) of Nuvation Bio Class A common stock. The Nuvation Bio Class A common stock has one vote per share;

(b)

each share of Legacy Nuvation Bio Class B common stock issued and outstanding immediately prior to the Effective Time (all of which will be owned by David Hung, M.D.) was canceled and converted into and exchanged for approximately 0.196 shares of the Nuvation Bio Class B common stock. The holders of Nuvation Bio Class B common stock have the right to elect and remove without cause three directors plus at least 50% of any directors in excess of seven, and the approval of the holders of a majority of Nuvation Bio Class B common stock will be required for approval by the stockholders of any acquisition (whether by merger, sale of shares or sale of assets) or liquidation of Nuvation Bio. The Nuvation Bio Class B common stock will automatically convert into Nuvation Bio Class A common stock upon the occurrence of certain events, including upon transfers to a non-authorized holder or if Dr. Hung’s ownership of shares of Nuvation Bio Class A common stock and Nuvation Bio Class B common stock falls below a specified level or if Dr. Hung dies, becomes disabled or ceases to be Chief Executive Officer of Nuvation Bio, unless he is terminated from such position by Nuvation Bio without cause;

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(c)	any shares of Legacy Nuvation Bio capital stock held in the treasury of Legacy Nuvation Bio or owned by Panacea<br>or Merger Sub immediately prior to the Effective Time were canceled without any conversion thereof and no payment or distribution was made with respect thereto;
(d)	each issued and outstanding share of common stock of Merger Sub was converted into and became one validly<br>issued, fully paid and nonassessable share of Nuvation Bio Class A common stock; and
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(e)	each option to purchase Legacy Nuvation Bio Class A common stock (each, a “Company Option”) that<br>was outstanding under Nuvation Bio’s 2019 Equity Incentive Plan immediately prior to the Effective Time, whether vested or unvested, was converted into an option to purchase a number of shares of Nuvation Bio Class A common stock equal to<br>the product (rounded down to the nearest whole number) of (a) the number of shares of Legacy Nuvation Bio Class A common stock subject to such Company Option immediately prior to the Effective Time and (b) the Exchange Ratio, at an<br>exercise price per share (rounded up to the nearest whole cent) equal to (i) the exercise price per share of such Company Option immediately prior to the Effective Time divided by (ii) the Exchange Ratio; subject to customary requirements<br>and conditions under the Internal Revenue Code of 1986, as amended (the “Code”).
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Note 2 — Basis of Presentation

The historical financial information of Panacea and Legacy Nuvation Bio has been adjusted in the unaudited pro forma condensed combined financial information to give effect to events that are (1) directly attributable to the merger, the PIPE investment and the forward purchase agreement, (2) factually supportable and (3) with respect to the statements of operations, expected to have a continuing impact on the combined results. The pro forma adjustments are prepared to illustrate the estimated effect of the transactions and certain other adjustments.

The merger will be accounted for as a reverse recapitalization because Legacy Nuvation Bio has been determined to be the accounting acquirer under Financial Accounting Standards Board’s Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). The determination is primarily based on the evaluation of the following facts and circumstances taking into consideration both the no redemption and maximum redemption scenario:

•	The pre-merger equity holders of Legacy Nuvation Bio will hold the<br>majority of voting rights in Nuvation Bio;
•	The pre-merger equity holders of Legacy Nuvation Bio will have the right<br>to appoint the majority of the directors on the Nuvation Bio board of directors;
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•	Senior management of Legacy Nuvation Bio will comprise the senior management of Nuvation Bio; and<br>
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•	Operations of Legacy Nuvation Bio will comprise the ongoing operations of Nuvation Bio.
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Under the reverse recapitalization model, the merger will be treated as Legacy Nuvation Bio issuing equity for the net assets of Panacea, with no goodwill or intangible assets recorded.

Nuvation Bio expects to enter into new equity awards with its employees upon the consummation of the merger. The terms of these new equity awards have not been finalized and remain subject to change. Accordingly, no effect has been given to the unaudited pro forma condensed combined financial information for the new awards.

The unaudited pro forma condensed combined financial information do not reflect the income tax effects of the pro forma adjustments as any change in the deferred tax balance would be offset by an increase in the valuation allowance given the Nuvation Bio incurred significant losses during the historical periods presented.

Note 3 — Pro Forma Adjustments

Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet

The unaudited pro forma condensed combined balance sheet as of December 31, 2020 reflects the following adjustments:

(A)	Represents the sources and uses of funds as it relates to the Business Combination and PIPE Investment (in<br>thousands):
Panacea cash held in a trust account	$	143,757	^(1)^
---	---	---	---
Proceeds from PIPE investment and forward purchase agreement		501,550	^(2)^
Payment of estimated transaction costs and deferred underwriter fees for Panacea		(16,034	)^(3)^
Payment of estimated transaction costs for Nuvation Bio		(2,699	)^(4)^
Payment to Panacea Class A common stockholders who exercised their right to redeem their<br>shares		(34	)^(5)^
	$	626,540
(1)	Reflects the reclassification of investments held in the trust account and to reflect that the funds are<br>available to effectuate the transaction or to pay redeeming Panacea public stockholders.
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(2)	Reflects the proceeds of $501.6 million from the issuance and sale of 50,155,000 shares of Panacea<br>Class A common stock at $10.00 per share through the PIPE investment and the forward purchase agreement.
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(3)	Reflects the payment of $16.0 million of estimated transaction costs and deferred underwriters’ fees<br>incurred during Panacea’s IPO and due upon the Effective Time. The unaudited pro forma condensed combined balance sheet reflects these costs at a reduction of cash with a corresponding decrease of $14.4 million in additional paid-in capital and $1.6 million in retained earnings. These costs are not included in the unaudited pro forma condensed combined statement of operations as they are nonrecurring.
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(4)	Reflects an estimated payment for $2.7 million of acquisition-related transaction costs as part of the<br>merger. The unaudited pro forma condensed combined balance sheet reflects these costs as a pro forma reduction of cash with a corresponding decrease in additional paid-in capital.
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(5)	Reflects the payment to Panacea Class A common stockholders who exercised their right to redeem 3,350<br>shares.
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(B)	Reflects the reclassification of $2.9 million of acquisition-related transaction costs capitalized as part<br>of the merger to additional paid-in capital.
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(C)	Reflects the reclassification of $143.8 million of investments held in a trust account that became<br>available following the merger.
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(D)	Reflects the conversion of Nuvation Bio Series A preferred stock into Nuvation Bio Class A common stock<br>and Nuvation Bio Class B common stock pursuant to the terms of the Merger Agreement, resulting in an adjustment of $267.5 million from temporary equity to permanent equity.
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(E)	Reflects the reclassification of $137.2 million of Panacea Class A common stock after holders of<br>3,350 shares of common stock exercised their right to redeem their shares as noted in Note 3(A)(5).
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(F)	Represents recapitalization of historical common stock of Legacy Nuvation Bio with a corresponding adjustment<br>to Class A common stock of $8 thousand as noted in Note 3(G) with the balance of $22.0 million recorded to additional paid-in capital, as noted in Note 3(H).
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(G)	Represents pro forma adjustments to Panacea Class A common stock to reflect the following (in thousands):<br>
Issuance of Panacea Class A common stock from PIPE investment and forward purchase<br>agreements	$	5
---	---	---
Conversion of Legacy Nuvation Bio Series A preferred stock to Nuvation Bio Class A common<br>stock and Nuvation Bio Class B common stock		7
Reclassification of Panacea Class A common stock subject to redemption		1
Recapitalization of Legacy Nuvation Bio common stock to Nuvation Bio Class A common<br>stock		8
	$	21
(H)	Represents pro forma adjustments to additional paid-in capital balance<br>to reflect the following (in thousands):
---	---
Reclassification of Panacea Class A common stock, as noted in Note 3(F)	$	137,395
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Issuance of Panacea Class A common stock from PIPE investment and forward purchase agreement,<br>as noted in Note 3(A)		501,545
Conversion of Nuvation Bio Series A preferred stock to Nuvation Bio Class A common stock and<br>Class B common stock, as noted in Note 3(E)		267,514
Recapitalization of historical common stock of Nuvation Bio as noted in Note 3(H)		21,953
Elimination of Panacea retained earnings as noted in Note 3(J)		(3,054	)
Reclassification of Legacy Nuvation deferred offering costs as noted in Note 3(B)		(2,925	)
Reduction in additional paid-in capital for estimated<br>transaction costs		(17,084	)
	$	905,119
(I)	Represents pro forma adjustments to retained earnings (accumulated deficit) to reflect the elimination of<br>Panacea’s historical retained earnings and the $1.6 million of transaction costs as described in Note 3(A3).
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Adjustments tothe Unaudited Pro Forma Condensed Combined Statements of Operation for the Year Ended December 31, 2020

The pro forma adjustments included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 are as follows:

(J)	Represents the exclusion of $0.9 million of transaction costs incurred by Legacy Nuvation Bio and<br>$2.8 million of transactions costs incurred by Panacea in connection with the merger that will not have a continuing impact on the combined entity.
(K)	Reflects exclusion of deemed dividend related to beneficial conversion feature and accretion of discount on<br>Redeemable Series A Convertible Preferred that will not have a continuing impact on the combined entity.
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