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On Monday, Jefferies analyst Roger Song confirmed a Buy rating and a price target of $8.00 for IO Biotech (NASDAQ:IOBT) shares. The clinical-stage biotech company, currently valued at $62 million, has seen its shares surge nearly 13% over the past week. According to InvestingPro data, the stock trades with relatively low volatility, maintaining a beta of 0.24. The company is preparing for a significant period in the first half of 2025, with the anticipated readout of progression-free survival (PFS) data from their Phase 3 trial of IO102-IO103, also known as CylembIO, in first-line advanced melanoma. A positive result could lead to a Biologics License Application (BLA) submission later in 2025.
IO Biotech aims to present this crucial PFS data for IO102-IO103 in combination with pembrolizumab, a therapy that could potentially offer a new option for patients and generate an estimated ~$260M in peak sales in the United States. The company has also completed enrollment for a Phase 2 basket trial of IO102-IO103 with pembrolizumab for patients with resectable melanoma or squamous cell carcinoma of the head and neck (SCCHN).
Despite IO102-IO103 not meeting its interim objective response rate (ORR) endpoint, analysts at Jefferies are not overly concerned, noting that other immune-oncology combinations have not shown statistically significant ORR improvements but have achieved significant PFS outcomes. The current trial is well-powered to detect a hazard ratio of 0.65 for PFS, with a strong historical comparison of 25.5 months versus 4-7 months for standard treatments.
IO Biotech has also secured significant debt financing, totaling €57.5 million, which will be distributed in four tranches. The first two tranches have been secured, and the third is contingent upon a positive PFS outcome and the subsequent BLA filing. InvestingPro analysis shows the company maintains a strong liquidity position with a current ratio of 5.37, though it's currently burning through cash rapidly. The company's overall Financial Health Score stands at "FAIR," with particularly strong cash flow metrics. The financing is expected to extend the company's financial runway into the second quarter of 2026.
Looking ahead, the company will provide further guidance on the PFS readout timing during their fourth-quarter earnings call, scheduled for March 27, 2025. Analyst sentiment remains bullish, with price targets ranging from $6 to $12 per share. InvestingPro subscribers have access to over 8 additional ProTips and detailed financial metrics that could help evaluate the company's investment potential. Positive data from their Phase 2 basket trial in metastatic non-small cell lung cancer (mNSCLC) and mSCCHN presented at the European Society for Medical (TASE:PMCN) Oncology (ESMO) in 2024 will likely lead to additional PFS readouts later in the year. The company is also planning to file an Investigational New Drug (IND) application for Arginase 1 in 2025, expanding its clinical pipeline.
In other recent news, IO Biotech, a pharmaceutical company, has been making significant strides in its operations. The company secured a loan facility of up to €57.5 million from the European Investment Bank to advance its therapeutic cancer vaccines. This development is expected to extend IO Biotech's financial runway into the second quarter of 2026. Furthermore, the company reported promising results from a Phase 2 trial of its lead investigational candidate, IO102-IO103, showing potential in treating patients with metastatic non-small cell lung cancer.
Additionally, IO Biotech has been notified by The Nasdaq Stock Market LLC of non-compliance with its minimum bid price requirement. The company has until June 24, 2025, to address the bid price deficiency. If IO Biotech fails to meet the requirement by this date, it may seek an additional 180-day period to regain compliance by transferring its listing to the Nasdaq Capital Market.
In terms of governance, IO Biotech has enacted changes to its corporate governance documents and fiscal calendar, as per a recent SEC filing. Analyst firms Piper Sandler and Morgan Stanley (NYSE:MS) have maintained an Overweight rating on IO Biotech, while Jefferies and H.C. Wainwright kept their Buy ratings. These ratings were influenced by recent data from the European Society for Medical Oncology conference and abstract data for IO Biotech's IO102-103. These are the recent developments for IO Biotech.
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