[FWP] Royal Bank of Canada Free Writing Prospectus

Rhea-AI Filing Summary

Mersana Therapeutics, Inc. (NASDAQ: MRSN) filed an 8-K to disclose the termination of its October 29, 2021 loan and security agreement with Oxford Finance LLC and other lenders. On July 1, 2025, the company paid approximately $17.9 million, which fully satisfied and discharged all outstanding indebtedness and related obligations under the agreement. As a result, the loan agreement and its related collateral security documents are no longer in effect.

The disclosure was made under Item 1.02 (“Termination of a Material Definitive Agreement”). No other material events, financial results, or operational updates were included in this filing.

Positive

• Elimination of approximately $17.9 million in outstanding debt under the 2021 Oxford Finance loan agreement.
• Termination of all related covenants and collateral obligations, giving the company increased operational flexibility.

Negative

• None.

Insights

Financial Analyst

TL;DR – Mersana extinguishes $17.9 M debt, ending 2021 Oxford Finance loan.

The filing signals a clean payoff of all obligations under the 2021 Oxford Finance facility. Eliminating this debt simplifies the balance sheet and removes any financial covenants or liens connected to the loan agreement. While the company expended $17.9 million in cash, it no longer carries the corresponding liability. The disclosure is straightforward, limited to the repayment event, and does not provide details on the post-payment liquidity position or the source of funds. Overall, the move is moderately positive because it resolves a material obligation without creating new ones.

Corporate Debt Specialist

TL;DR – Full early payoff ends lender claims and collateral ties.

From a creditor perspective, complete discharge on July 1 removes Oxford’s collateral rights and terminates the lending relationship. Such pay-offs often follow equity raises or partnering cash infusions, though the filing does not specify funding sources. Absence of penalties or continuing covenants suggests a clean exit. Investors should note that the company no longer benefits from the credit line’s liquidity but gains flexibility free from lender restrictions. With no new facility announced, the net impact leans positive yet modest until further capital strategy is disclosed.

 

Auto-Callable Enhanced Return Dual Directional Buffer Notes
Linked to the Least Performing of Three Underliers

Due July 20, 2028

PRODUCT CHARACTERISTICS

· Call Feature — If, on the Call Observation Date, the closing value of each Underlier is greater than or equal to its Initial Underlier Value, the Notes will be automatically called for a return of 40%. No further payments will be made on the Notes.

· Enhanced Return Potential — If the Notes are not automatically called and the Final Underlier Value of the Least Performing Underlier is greater than its Initial Underlier Value, at maturity, investors will receive a return equal to 200% of the Underlier Return of the Least Performing Underlier.

· Absolute Value Return — If the Notes are not automatically called and the Final Underlier Value of the Least Performing Underlier is less than or equal to its Initial Underlier Value, but is greater than or equal to its Buffer Value, at maturity, investors will receive a one-for-one positive return equal to the absolute value of the Underlier Return of the Least Performing Underlier.

· Principal at Risk — If the Notes are not automatically called and the Final Underlier Value of the Least Performing Underlier is less than its Buffer Value, at maturity, investors will lose 1% of the principal amount of their Notes for each 1% that the Final Underlier Value of the Least Performing Underlier is less than its Initial Underlier Value in excess of the Buffer Percentage.

KEY TERMS
Issuer:	Royal Bank of Canada (“RBC”)
CUSIP:	78017PEJ6
Underliers:	The common stock of Constellation Energy Corporation (Bloomberg symbol “CEG UW”), the common stock of Equinix, Inc. (Bloomberg symbol “EQIX UW”) and the Class A common stock of Vertiv Holdings Co (Bloomberg symbol “VRT UN”)
Trade Date:	July 17, 2025
Issue Date:	July 22, 2025
Valuation Date:	July 17, 2028
Maturity Date:	July 20, 2028
Call Feature:	If, on the Call Observation Date, the closing value of each Underlier is greater than or equal to its Initial Underlier Value, the Notes will be automatically called. Under these circumstances, investors will receive on the Call Settlement Date per $1,000 principal amount of Notes an amount equal to $1,400 (140% of the principal amount). No further payments will be made on the Notes.
Call Observation Date:	July 23, 2026
Call Settlement Date:	July 28, 2026
Payment at Maturity:	If the Notes are not automatically called, investors will receive on the Maturity Date per $1,000 principal amount of Notes: · If the Final Underlier Value of the Least Performing Underlier is greater than its Initial Underlier Value, an amount equal to: $1,000 + ($1,000 × Underlier Return of the Least Performing Underlier × Participation Rate) · If the Final Underlier Value of the Least Performing Underlier is less than or equal to its Initial Underlier Value, but is greater than or equal to its Buffer Value, an amount equal to: $1,000 + (-1 × $1,000 × Underlier Return of the Least Performing Underlier) In this case, you will receive a positive return on the Notes equal to the absolute value of the Underlier Return of the Least Performing Underlier, even though the Underlier Return of the Least Performing Underlier is negative. In no event will this return exceed 35%. · If the Final Underlier Value of the Least Performing Underlier is less than its Buffer Value, an amount equal to: $1,000 + [$1,000 × (Underlier Return of the Least Performing Underlier + Buffer Percentage)] If the Notes are not automatically called and the Final Underlier Value of the Least Performing Underlier is less than its Buffer Value, you will lose some or a substantial portion of your principal amount at maturity.

KEY TERMS (continued)
Participation Rate:	200% (applicable only at maturity if the Notes are not automatically called)
Buffer Percentage:	35%
Buffer Value:	With respect to each Underlier, 65% of its Initial Underlier Value
Underlier Return:	With respect to each Underlier: Final Underlier Value – Initial Underlier Value Initial Underlier Value
Initial Underlier Value:	With respect to each Underlier, the closing value of that Underlier on the Trade Date
Final Underlier Value:	With respect to each Underlier, the closing value of that Underlier on the Valuation Date
Least Performing Underlier:	The Underlier with the lowest Underlier Return

PAYOFF DIAGRAM (IF THE NOTES ARE NOT AUTOMATICALLY CALLED)

This document provides a summary of the terms of the Notes. Investors should carefully review the accompanying preliminary pricing supplement, product supplement, prospectus supplement and prospectus, as well as “Selected Risk Considerations” below, before making a decision to invest in the Notes:

https://www.sec.gov/Archives/edgar/data/1000275/000095010325008452/dp231245_424b2-us2771mul.htm

The initial estimated value of the Notes determined by us as of the Trade Date, which we refer to as the initial estimated value, is expected to be between $881.00 and $931.00 per $1,000 principal amount of Notes and will be less than the public offering price of the Notes. We describe the determination of the initial estimated value in more detail in the accompanying preliminary pricing supplement.

 

Selected Risk Considerations

An investment in the Notes involves significant risks. We urge you to consult your investment, legal, tax, accounting and other advisers before you invest in the Notes. Some of the risks that apply to an investment in the Notes are summarized below, but we urge you to read also the “Selected Risk Considerations” section of the accompanying preliminary pricing supplement and the “Risk Factors” sections of the accompanying prospectus, prospectus supplement and product supplement. You should not purchase the Notes unless you understand and can bear the risks of investing in the Notes.

· You May Lose a Substantial Portion of the Principal Amount at Maturity.

· Your Potential Payment If the Notes Are Automatically Called Is Limited.

· Your Potential for a Positive Return from Depreciation of the Least Performing Underlier Is Limited.

· Any Payment on the Notes Will Be Determined Solely by the Performance of the Least Performing Underlier Even If the Other Underliers Perform Better.

· The Notes Do Not Pay Interest, and Your Return on the Notes May Be Lower Than the Return on a Conventional Debt Security of Comparable Maturity.

· The Notes Are Subject to an Automatic Call.

· Payments on the Notes Are Subject to Our Credit Risk, and Market Perceptions about Our Creditworthiness May Adversely Affect the Market Value of the Notes.

· Any Payment on the Notes Will Be Determined Based on the Closing Values of the Underliers on the Dates Specified.

· The U.S. Federal Income Tax Consequences of an Investment in the Notes Are Uncertain.

· There May Not Be an Active Trading Market for the Notes; Sales in the Secondary Market May Result in Significant Losses.

· The Initial Estimated Value of the Notes Will Be Less Than the Public Offering Price.

· The Initial Estimated Value of the Notes Is Only an Estimate, Calculated as of the Trade Date.

· Our and Our Affiliates’ Business and Trading Activities May Create Conflicts of Interest.

· RBCCM’s Role as Calculation Agent May Create Conflicts of Interest.

· You Will Not Have Any Rights to Any Underlier.

· Any Payment on the Notes May Be Postponed and Adversely Affected by the Occurrence of a Market Disruption Event.

· Anti-dilution Protection Is Limited, and the Calculation Agent Has Discretion to Make Anti-dilution Adjustments.

· Reorganization or Other Events Could Adversely Affect the Value of the Notes or Result in the Notes Being Accelerated.

Royal Bank of Canada has filed a registration statement (including a product supplement, prospectus supplement and prospectus) with the SEC for the offering to which this document relates. Before you invest, you should read those documents and the other documents that we have filed with the SEC for more complete information about us and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, we, any agent or any dealer participating in this offering will arrange to send you those documents if you so request by calling toll-free at 1-877-688-2301.

As used in this document, “Royal Bank of Canada,” “we,” “our” and “us” mean only Royal Bank of Canada. Capitalized terms used in this document without definition are as defined in the accompanying preliminary pricing supplement.

Registration Statement No. 333-275898; filed pursuant to Rule 433

FAQ

What did Mersana Therapeutics (MRSN) announce in its July 1, 2025 8-K?

The company repaid about $17.9 million to fully discharge its 2021 loan agreement with Oxford Finance and other lenders.

Which loan agreement was terminated by MRSN?

The October 29, 2021 loan and security agreement with Oxford Finance LLC and participating lenders.

Under which 8-K item is the repayment disclosed?

It is reported under Item 1.02 – Termination of a Material Definitive Agreement.

How much did Mersana pay to settle the loan?

Approximately $17.9 million was paid on July 1, 2025.

Does the filing mention any new financing replacing the repaid loan?

No. The 8-K only covers the repayment and termination; it does not reference any new credit facilities.