IO Biotech's Cylembio Shows Promise Despite Missed Endpoint, Analyst Maintains Buy Rating

IO Biotech's Cylembio therapy missed its primary endpoint in a Phase 3 trial, but showed promise in specific patient subgroups. Analyst Emily Bodnar maintains a Buy rating due to its potential as a first-in-class cancer vaccine and promising pipeline. IO Biotech's innovative therapies could address unmet medical needs in oncology, justifying the Buy rating and a $14.00 price target.

Title: IO Biotech: Cylembio Misses Primary Endpoint in Phase 3 Trial, but Shows Promise in Specific Subgroups

IO Biotech (NASDAQ:IOBT), a clinical-stage oncology company, reported its second quarter financial results on August 14, 2025, alongside the outcome of its pivotal Phase 3 trial for Cylembio®, its lead cancer vaccine candidate. The company posted a GAAP net loss of $26.2 million for Q2 2025, an increase from the prior year’s loss of $20.7 million [1].

The most significant update was the outcome of the pivotal Phase 3 trial for Cylembio®, the company’s lead cancer vaccine candidate. The study, known as the IOB-013/KN-D18 trial for advanced melanoma, showed clinical improvement in progression-free survival (PFS), but missed its primary endpoint for statistical significance (p=0.056; threshold for significance p≤0.045). The median PFS for patients on the vaccine combination was 19.4 months, compared to 11.0 months for the control arm [1]. Despite missing the primary endpoint, the trial demonstrated a nominal p-value of 0.037 in a post-hoc analysis of patients without prior anti-PD-1 treatment, indicating a trend toward improved overall survival [3].

IO Biotech plans to meet with the U.S. Food and Drug Administration (FDA) in fall 2025 to discuss the results and potential next steps for a Biologics License Application. The company highlighted ongoing trials in several cancer types, with more data expected in the latter half of 2025 [1].

Analyst Emily Bodnar maintains a Buy rating for IO Biotech due to its potential as a first-in-class cancer vaccine and promising pipeline. Bodnar noted that while the primary endpoint was not met, the data showed significant benefits in specific patient subgroups, particularly those without prior anti-PD-1 treatment and PD1-negative patients [4]. The innovative therapies developed by IO Biotech could address unmet medical needs in oncology, justifying the Buy rating and a $14.00 price target [4].

Io Biotech’s financials reflect heavy investment in research and development, with expenses climbing to $16.7 million (GAAP) for the quarter. General and administrative costs (GAAP) were $6.5 million for the quarter, contributing to total operating expenses of $23.2 million (GAAP) for the quarter [1]. The company’s cash runway, including a post-quarter EIB loan, is expected to last into the first quarter of 2026 [1].

Looking ahead, the timing and outcome of discussions with the FDA will determine if and when Io Biotech can submit a formal application to market Cylembio® for advanced melanoma. The company’s ongoing trials and the potential for regulatory approval will be closely watched due to their influence on future funding and strategic options.

References:
[1] https://www.nasdaq.com/articles/io-biotech-posts-wider-loss-q2
[2] https://www.ainvest.com/news/io-biotech-reports-positive-results-cancer-vaccine-merck-keytruda-late-stage-trial-2508/
[3] https://www.fiercebiotech.com/biotech/cancer-vaccines-narrow-phase-3-fail-wont-stop-io-heading-fda
[4] https://seekingalpha.com/article/4812780-io-biotech-a-buying-opportunity-following-phase-3-readout-in-melanoma