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On Tuesday, H.C. Wainwright analyst Emily Bodnar maintained a Buy rating and a $12.00 price target on IO Biotech (NASDAQ:IOBT) shares, representing significant upside potential from the current price of $0.91. According to InvestingPro data, the stock has declined over 8% in the past week, though current analysis suggests the company is undervalued. The firm’s stance comes after IO Biotech provided updated guidance on their Phase 3 trial for Cylembio in treating first-line melanoma. The new timeline suggests topline results are now anticipated in the third quarter of 2025, a shift from the first half of the same year.
The company reported that the progression of progression-free survival (PFS) events has decelerated, resulting in the primary endpoint of the study being expected later than initially planned. The Phase 3 trial is examining the efficacy of Cylembio in combination with pembrolizumab versus pembrolizumab alone in 407 patients, aiming to achieve a 35% reduction in risk after 226 PFS events have been observed. InvestingPro analysis reveals the company maintains a strong liquidity position with a current ratio of 5.37, though it’s currently experiencing significant cash burn - one of several key insights available to Pro subscribers.
Despite the delay, which could hint at an extended median PFS for patients treated with Cylembio, analysts at H.C. Wainwright remain positive about the potential outcomes. They noted that in a Phase 1 study, the combination of IO102-IO103 with nivolumab yielded a median PFS of 22.5 months, which is significantly higher than the 11-12 months typically expected with checkpoint inhibitors alone.
While emphasizing caution against comparing results across different trials and acknowledging the limited scope of the Phase 1 study, the analysts believe that a median PFS of at least 15 months in the Phase 3 trial would likely be enough to meet the statistical significance for the topline data. They also pointed out that this expectation allows for some flexibility based on the earlier Phase 1 results.
IO Biotech continues to prepare for a potential Biologics License Application (BLA) submission in 2025, contingent on positive Phase 3 results, with hopes for full approval and product launch in the second half of 2026. The reaffirmed Buy rating and price target reflect H.C. Wainwright’s confidence in the stock’s prospects. With a market capitalization of approximately $60 million and analyst targets ranging from $6 to $12, the stock shows significant potential despite its current challenges. Discover more comprehensive analysis and 8 additional ProTips with an InvestingPro subscription.
In other recent news, IO Biotech announced that it is on track to submit a Biologics License Application (BLA) for its cancer vaccine, Cylembio®, by the end of 2025. The company has completed enrollment for its pivotal Phase 3 trial, involving 407 patients, and expects to report progression-free survival (PFS) data in the third quarter of 2025. Financially, IO Biotech ended the fourth quarter of 2024 with approximately $60 million in cash and cash equivalents, and secured up to €57.5 million in debt financing from the European Investment Bank, extending its financial runway into 2026.
In addition, Jefferies maintains a Buy rating on IO Biotech with a price target of $8, anticipating significant developments with the upcoming PFS data readout. The company also faces a potential Nasdaq delisting due to its stock price falling below the required $1.00 per share for 30 consecutive trading days, with a compliance deadline set for June 24, 2025. Meanwhile, IO Biotech’s second cancer vaccine candidate, IO112, has shown promising preclinical results, with plans to submit an Investigational New Drug Application in 2025.
The European Investment Bank’s loan facility will aid in advancing IO Biotech’s therapeutic cancer vaccines, including IO102-IO103, which is also expected to reach a BLA submission in 2025. IO Biotech’s vaccine development is supported by its T-Win® platform, focusing on activating T cells against both tumor and immune-suppressive cells. The company’s ongoing trials and financial strategies highlight its commitment to advancing cancer treatments.
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