CG Oncology's (CGON) future launch of Cretostimogene, or Creto, as a therapy for bladder cancer could face a headwind from reimbursement dynamics, RBC Capital Markets said in a Thursday note.

The brokerage said its analysis suggests that the existing payment schedule may favor Creto's rival therapy, Inlexzo. Procedure-related reimbursement for Inlexzo could be substantially higher due to differences in billing codes and timing, which could give physicians a financial incentive to use the competitor.

Creto is expected to be reimbursed as a single bundled procedure, which could limit procedure-related payments. The brokerage continues to favor Creto in the bladder cancer market.

The therapy's differentiated safety profile, impressive durability and strong efficacy are expected to support physician use based on patient needs rather than reimbursement alone. The firm also noted that greater clarity on approval timelines and an upcoming intermediate-risk readout could provide additional catalysts for the stock.

RBC has a outperform rating on CG Oncology, with a $73 price target.

Shares of CG Oncology were down more than 2% in recent trading.

Price: 52.34, Change: -1.21, Percent Change: -2.26