Bubble or no bubble, this is the best stock for AI exposure: analyst
Investing.com - Piper Sandler has maintained its Overweight rating and $3.00 price target on IO Biotech (NASDAQ:IOBT) as the company outlines a new clinical path for its Cylembio treatment in melanoma. With IOBT currently trading at $0.81, the target represents a 270% upside from current levels. InvestingPro analysis indicates the stock is undervalued with a Fair Value above its current price.
The research firm’s decision follows IO Biotech ’s announcement of plans for a potential new global, adaptive Phase 2/3 study of Cylembio in combination with Opdualag versus Opdualag alone in first-line advanced melanoma patients.
This development comes after a pre-Biologics License Application (BLA) meeting with the FDA, in which the agency recommended against submitting a BLA based on the company’s pivotal data.
The planned trial will stratify patients based on PD-L1 status and prior treatment with anti-PD-1 or anti-PD-L1 therapies—subgroups that showed stronger clinical responses in the Phase 3 study, according to Piper Sandler.
IO Biotech plans to discuss the trial design with the FDA next month before sharing additional details, with more Cylembio data expected in the second half of 2025. The company, with a market cap of $54.35 million, holds more cash than debt on its balance sheet but is quickly burning through cash according to InvestingPro data. Investors can access 8 more exclusive ProTips and comprehensive financial insights to evaluate IOBT’s potential ahead of its next earnings report in March 2026.
In other recent news, IO Biotech presented new preclinical data for its cancer vaccine candidates, IO112 and IO170, at the Society for Immunotherapy of Cancer’s Annual Meeting. These candidates, targeting arginase 1 and Transforming Growth Factor (TGF)-β respectively, are part of the company’s proprietary T-win platform. Meanwhile, the company’s experimental cancer vaccine, Cylembio, in combination with Merck’s pembrolizumab, showed a clinically meaningful improvement in progression-free survival for advanced melanoma patients. However, the Phase 3 trial results narrowly missed the statistical significance required for a Biologics License Application (BLA), leading to the FDA recommending against filing the BLA.
Following this setback, TD Cowen downgraded IO Biotech’s stock rating from Buy to Hold, while H.C. Wainwright downgraded it from Buy to Neutral. H.C. Wainwright’s downgrade was influenced by trial delays, with the potential launch of Cylembio now projected for 2029. Additionally, IO Biotech announced a workforce reduction of approximately 50% due to financial constraints, with cash reserves expected to last into the first quarter of 2026. These developments have significantly impacted the company’s operations and future projections.
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