Io Biotech Posts Wider Loss in Q2

Io Biotech (IOBT -2.29%), a clinical-stage oncology company specializing in cancer vaccines, released its second quarter results on August 14, 2025. The most important update was the outcome of the pivotal Phase 3 trial for Cylembio®, its lead cancer vaccine candidate. The study demonstrated a clinical benefit by improving progression free survival in advanced melanoma, but it narrowly missed the statistical significance needed for regulatory approval. The company reported a net loss of $26.2 million for Q2 2025 (GAAP), deeper than the prior year’s loss, and a GAAP earnings per share figure of ($0.40). Revenue (GAAP) was zero, as widely expected for a clinical-stage biotech. Overall, the period underscored the risks and potential facing the company, with regulatory timing and funding runway now in sharper focus.

Source: Analyst estimates for the quarter provided by FactSet.

Business Overview and Focus

Io Biotech is developing immunotherapy treatments to help the body's immune system fight cancer. Its core technology, the T-win® platform, is designed to produce cancer vaccines that target cells within the tumor microenvironment. These vaccines aim to activate T cells—an important part of the immune system—to attack both tumor cells and suppressive immune cells that allow cancer to grow unchecked.

The company’s current focus centers on advancing its most developed product, Cylembio®. This therapeutic cancer vaccine is being tested in combination with pembrolizumab, a checkpoint inhibitor, for advanced melanoma. Continued progress or regulatory approval for Cylembio® would be a major milestone for both the product and the T-win® platform, with multiple near-term trials underway that could expand the platform's reach.

Quarter in Review: Trial Results, Financials, and Pipeline Updates

The most significant event during the quarter was the topline data from the pivotal Phase 3 trial of Cylembio®. In the main patient group of the Phase 3 IOB-013/KN-D18 trial, the vaccine plus pembrolizumab showed a hazard ratio (HR) of 0.77 for progression free survival (PFS) compared to pembrolizumab alone, but the p-value of 0.056 narrowly missed the study’s statistical threshold for the primary endpoint. Median progression free survival for those on the vaccine combination was 19.4 months, compared to 11.0 months for the control arm. In certain groups—particularly patients without prior treatment and those with PD-L1 negative tumors—the benefit appeared more pronounced, with an HR of 0.54 and median PFS of 16.6 months versus 3.0 months for controls. However, the primary endpoint’s statistical miss means regulatory approval is not guaranteed. The company now 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.

Cylembio® is being tested in tandem with Merck’s pembrolizumab (a type of checkpoint inhibitor drug), but Io Biotech retains global commercialization rights. The safety profile remained consistent with expectations, with no new issues identified. The company did not report any product revenue, in line with analyst estimates and its development-stage status. Other trials in the pipeline include a perioperative Phase 2 solid tumor study (IOB-032/PN-E40) and a Phase 2 trial in non-small cell lung cancer and head and neck cancer (IOB-022/KN-D38), both of which have completed enrollment, with initial and longer-term data expected in the second half of 2025. Data from these studies is expected in the second half of 2025, followed by the potential for peer-reviewed presentations in 2026.

Io Biotech’s financials continue to reflect heavy investment in research and development, which climbed 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. The GAAP net loss widened to $26.2 million for the quarter, partly due to a $2.6 million GAAP warrant revaluation loss and higher interest expenses following loan drawdowns. Cash burn for the quarter was $9.0 million, bringing the cash and equivalents balance down to $28.1 million (GAAP) at quarter's end.

The balance sheet (GAAP) showed a decrease in assets and equity but an increase in liabilities as of June 30, 2025, compared to December 31, 2024, reflecting the company’s dependence on external funding to finance ongoing trials. In July 2025, after the close of the quarter, Io Biotech received an additional €12.5 million (about $13.7 million) tranche from a European Investment Bank loan. The company estimates this cash injection will extend its operations into the first quarter of 2026. Still, without new sources of capital, it will face funding needs in the near term, especially if regulatory or trial outcomes delay commercialization plans. There were no material one-time events with recognized revenue, no new partnership announcements, and no dividends declared.

Looking Ahead: Regulatory Steps and Financial Outlook

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 highlighted ongoing trials in several cancer types, with more data expected in the latter half of 2025. Product and regulatory milestones in the coming quarters will be closely watched due to their influence on future funding and strategic options.

Management did not provide detailed financial or operational guidance for the next quarter or full year in this release. It emphasized continued data readouts and the upcoming regulatory meeting as the main points of focus. The company does not pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.