HC Wainwright Downgrades IO Biotech to Neutral from Buy

HC Wainwright Downgrades IO Biotech to Neutral from Buy

IO Biotech (Nasdaq: IOBT), a clinical-stage biopharmaceutical company developing immune-modulatory cancer vaccines, has faced a significant setback with its cancer vaccine candidate, Cylembio. The Food and Drug Administration (FDA) has advised against submitting a Biologics License Application (BLA) for Cylembio, based on data from the IOB-013 clinical trial IO Biotech to Reduce Headcount by 50% Amid Restructuring^[1]. The trial showed improved progression-free survival when Cylembio was combined with pembrolizumab, but the results did not achieve statistical significance.

In response to this recommendation, IO Biotech announced a restructuring plan that includes a reduction of approximately 50 percent of its workforce, or around 40 workers. The company expects this restructuring to reduce its ongoing expense structure and anticipates a non-recurring charge of between $1 million and $1.5 million in the current quarter IO Biotech to Reduce Headcount by 50% Amid Restructuring^[1]. IO Biotech currently has capital to run its operations into the first quarter of 2026 IO Biotech Faces FDA Setback with Cylembio; Plans New Study and Workforce Restructuring^[2].

The FDA's recommendation has led to a significant drop in IO Biotech's stock price, with shares tumbling 75 percent to 39 cents in premarket trading IO Biotech to Reduce Headcount by 50% Amid Restructuring^[1]. Despite this setback, the company plans to continue pursuing a pathway to regulatory approval for Cylembio while working to complete current studies.

Investment analysts at HC Wainwright have responded to these developments by downgrading IO Biotech to a "Neutral" rating from a "Buy" rating. The downgrade reflects the company's ongoing challenges with regulatory approval and the significant impact of the workforce reduction on its financial position .