IO Biotech Shares Plummet as Melanoma Vaccine Trial Narrowly Misses Goal
The company's lead candidate showed a 23% risk reduction in disease progression, but failed to meet the threshold for statistical significance, prompting the FDA to advise against seeking approval on current data.
Shares of IO Biotech (NASDAQ: IOBT) plunged in Friday trading after the company announced its pivotal Phase 3 trial for its lead cancer vaccine, Cylembio (IOB-013), narrowly missed its primary endpoint in treating advanced melanoma. The setback overshadowed a strong quarterly earnings report and has cast uncertainty over the drug's path to market.
The trial, which evaluated Cylembio in combination with Merck’s blockbuster immunotherapy KEYTRUDA, showed a clinically meaningful 23% reduction in the relative risk of disease progression or death compared to KEYTRUDA alone. The combination achieved a median progression-free survival of 19.4 months versus 11.0 months for the control group. However, the results fell just short of the prespecified threshold for statistical significance, with a p-value of 0.0558, slightly above the required level of p≤0.045.
This near-miss prompted the U.S. Food and Drug Administration (FDA) to recommend that IO Biotech not submit a Biologics License Application (BLA) based on the current data. The company now plans to meet with the regulator in December to discuss the design of a potential new registrational study.
"Although the IOB-013 study narrowly missed statistical significance on the primary PFS endpoint, the results of the study support the mechanism of action of our therapeutic cancer vaccines and, we believe, have significantly de-risked the program," said Mai-Britt Zocca, PhD, President and CEO of IO Biotech, in a statement released by the company. "We look forward to discussing the next Phase 3 study design for Cylembio with the FDA in December."
The market reaction was swift and severe, reflecting the high stakes for the clinical-stage company. IO Biotech's stock fell sharply, wiping out millions in market capitalization as investors recalibrated their expectations for the company's lead asset.
Despite the top-line failure, the company highlighted encouraging trends within the data. A favorable trend in overall survival was observed, though the data is not yet mature. More significantly, the treatment showed pronounced efficacy in certain high-need patient subgroups. In patients with PD-L1-negative tumors, a group that typically responds poorly to immunotherapy, the combination therapy demonstrated a hazard ratio of 0.54, cutting the risk of progression nearly in half, as detailed in the company's presentation. This strong signal in a specific population could form the basis of a more targeted design for a future trial.
The clinical disappointment overshadowed what was otherwise a positive financial report for the third quarter. The company reported a net loss of $8.4 million, or an earnings per share of $-0.13, significantly beating analyst estimates of $-0.35 per share. However, for a development-stage biotech firm, clinical data holds far more weight than near-term financials.
The path forward now involves significant challenges. The need to conduct another costly Phase 3 trial puts pressure on the company's finances. According to its latest report, IO Biotech held $30.7 million in cash and cash equivalents as of September 30, 2025, which it anticipates will fund operations only through the first quarter of 2026. With the prospect of a new, multi-year trial, the company will likely need to raise additional capital, a difficult proposition following a major clinical setback.
Cylembio is an investigational, off-the-shelf cancer vaccine designed to target immunosuppressive cells within the tumor microenvironment. The trial in combination with KEYTRUDA was seen as a key validation of its platform, and the narrow miss leaves investors waiting for clarity on the next steps following the company's critical meeting with the FDA next month.