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NEW YORK - IO Biotech's (NASDAQ:IOBT) experimental cancer vaccine Cylembio, when combined with Merck's pembrolizumab, showed a clinically meaningful improvement in progression-free survival for advanced melanoma patients but narrowly missed statistical significance in its Phase 3 trial, according to results presented Monday at the European Society for Medical Oncology Congress in Berlin. The clinical-stage biotech company, currently valued at $43.17 million, has seen its stock surge nearly 13% over the past week despite ongoing market volatility. InvestingPro analysis shows the company maintains a strong liquidity position with more cash than debt, though it's currently burning through its reserves rapidly.
The combination therapy achieved a median progression-free survival of 19.4 months compared to 11.0 months with pembrolizumab alone, representing a 23% reduction in the risk of disease progression (hazard ratio 0.77; p=0.0558). However, this fell short of the prespecified threshold for statistical significance (p≤0.045). With the company's next earnings report due on November 5, investors seeking deeper insights into IO Biotech's financial health and growth prospects can access 10+ additional exclusive ProTips through InvestingPro.
The study enrolled 407 previously untreated patients with unresectable or metastatic melanoma. Notably, the combination showed particular benefit in patients with PD-L1-negative tumors (16.6 vs 3.0 months), BRAFV600-mutated tumors, and those with elevated LDH levels.
"Despite the narrow miss on statistical significance, I am encouraged by the clinically meaningful improvement observed," said Jessica Hassel, Professor at the University Hospital Heidelberg and lead investigator for the trial, according to the press release.
The combination demonstrated a favorable safety profile with no increase in immune-mediated adverse events compared to pembrolizumab monotherapy. Local injection-site reactions were generally mild and transient.
IO Biotech also presented final data from its Phase 2 basket trial evaluating Cylembio plus pembrolizumab in non-small cell lung cancer and head and neck cancer, showing median progression-free survival of 8.1 months and 7.0 months, respectively.
Cylembio is designed to target both tumor cells and immune-suppressive cells in the tumor microenvironment by stimulating T cells against specific proteins. The company maintains global commercial rights to the vaccine candidate. Despite showing promise in clinical development, IO Biotech faces significant financial challenges with an EBITDA of -$98.95 million in the last twelve months, reflecting the capital-intensive nature of biotech research and development.
In other recent news, IO Biotech has encountered significant developments impacting its operations and future plans. The company faced a major setback as the FDA recommended against filing a Biologics License Application (BLA) for its cancer vaccine candidate, Cylembio, following the results of the IOB-013 trial. This recommendation led to a downgrade of IO Biotech's stock rating from Buy to Hold by TD Cowen, and from Buy to Neutral by H.C. Wainwright, due to anticipated delays in the drug's launch timeline. The FDA's decision requires a new Phase 3 trial, potentially pushing the launch to 2029, significantly later than the previous 2026 projection.
In response to financial constraints, IO Biotech is reducing its workforce by approximately 50%, with cash reserves expected to last into the first quarter of 2026. Despite these challenges, the company plans to present Phase 3 trial data for its melanoma vaccine IO102-IO103 at the European Society for Medical Oncology (ESMO) Congress in October 2025. This presentation, selected as a late-breaking abstract, highlights research with potential implications for clinical practice. These recent developments underscore the challenges and strategic adjustments IO Biotech is navigating in its pursuit of advancing cancer treatments.
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