IO Biotech, Inc. (IOBT)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 EPS was -$0.25 vs Wall Street consensus of -$0.12, a miss driven by lower interest income, new EIB interest expense, and non-operating dynamics; however, reported net loss improved sharply quarter-over-quarter on a $9.85M favorable warrant fair value change and lower R&D spend . EPS and revenue consensus from S&P Global data.*
• The pivotal Phase 3 (IOB-013) in first‑line advanced melanoma showed clinically meaningful PFS improvement (mPFS 19.4 vs 11.0 months; HR=0.77), but narrowly missed statistical significance; PD‑L1‑negative subgroup saw profound benefit (mPFS 16.6 vs 3.0 months; HR=0.54) .
• Regulatory trajectory shifted: FDA recommended not submitting a BLA based on IOB‑013; the company is meeting the FDA in December to align on a potential new registrational Phase 3 design .
• Liquidity: Cash and cash equivalents were $30.7M at quarter end; runway guided “through Q1 2026,” aided by EIB Tranche B draw and ATM proceeds, but going‑concern risk remains without additional capital .
• Near-term catalysts: December FDA meeting, ESMO detailed data already presented, and portfolio updates (IO112 arginase-1 and IO170 TGF‑β preclinical advances) .

What Went Well and What Went Wrong

What Went Well

• “Clinically relevant improvement in progression free survival... across virtually all subgroups,” with strongest effect in PD‑L1‑negative tumors (mPFS 16.6 vs 3.0 months; HR=0.54, nominal p=0.006) .
• Management emphasized de‑risking of the program and maintained commitment to advancing Cylembio: “results... support the mechanism of action... and... have significantly de‑risked the program” .
• Operating discipline: R&D fell to $13.7M (from $16.7M in Q2 and $20.2M YoY), lowering OpEx; net other income benefited from a $9.85M positive change in warrant fair value .

What Went Wrong

• Primary endpoint narrowly missed statistical significance (HR=0.77; p=0.056 vs threshold p≤0.045), reducing the probability of a near‑term approval path .
• FDA recommended not submitting a BLA based on the IOB‑013 data, forcing strategy to a potential new registrational Phase 3 and extending timelines .
• Capital and runway risk: cash of $30.7M funds operations only through Q1 2026; management disclosed substantial doubt about going concern absent new capital .

Financial Results

P&L and EPS Trend (Quarterly)

YoY Comparison

Revenue

Liquidity

Selected Non-GAAP/Drivers

Clinical KPIs (IOB‑013 Pivotal Trial)

Guidance Changes

No explicit revenue/margin/OpEx rate guidance was provided in Q3 materials .

Earnings Call Themes & Trends

Note: No Q3 earnings call transcript was available in the document set searched; themes derived from Q3 8‑K/10‑Q and Aug 11 topline results call materials .

Management Commentary

• CEO: “Although the IOB‑013 study narrowly missed statistical significance on the primary PFS endpoint, the results... support the mechanism of action... and... have significantly de‑risked the program. We look forward to discussing the next Phase 3 study design for Cylembio with the FDA in December...” .
• CMO: “Delaying progression and improving survival is the ultimate treatment goal... OS... trend... is encouraging... with no new safety signals or significant additional systemic toxicity” .
• External Investigator: “In PD‑L1 negative population, patients achieved a remarkable 16.6 months of mPFS vs 3.0 months with pembrolizumab alone” .

Q&A Highlights

• Overall survival timing: OS expected to mature over 6–9 months from topline (company reiterated expectation) .
• Subgroup effects: PD‑L1‑negative subgroup showed pronounced benefit; additional post‑hoc analyses (no prior anti‑PD‑1) favored combination (HR=0.74; mPFS 24.8 vs 11.0 months) .
• Safety: No new safety signals; injection site reactions common but transient; grade ≥3 treatment‑related events comparable to pembrolizumab .
• Regulatory path: Planned December FDA meeting to align on new Phase 3 registrational design; no BLA based on current Phase 3 data per FDA recommendation .

Estimates Context

• Result: EPS miss versus consensus; revenue in line with expectations for a clinical‑stage biotech (no product revenue) .
• Drivers of EPS variance: lower interest income, new interest expense from EIB debt, and non‑recurring/mark‑to‑model warrant fair value changes that improved net loss but did not eliminate the miss versus Street .
  Values retrieved from S&P Global.*

Key Takeaways for Investors

• Regulatory reset: FDA’s recommendation against a BLA based on IOB‑013 reorients the US path to a new registrational Phase 3; December FDA meeting is the next binary catalyst .
• Clinical signal remains compelling in PD‑L1‑negative and other poor‑prognosis subgroups, supporting biological rationale and potential for differentiated positioning if future trials confirm efficacy .
• Liquidity runway “through Q1 2026” is finite; management disclosed substantial doubt about going concern absent additional financing—expect near‑term capital actions (ATM, equity/debt, partnering) .
• Cost actions implemented (≈50% workforce reduction; $0.9M charge) should lower burn, but EIB debt accrues PIK interest and adds financing complexity .
• Estimate revisions likely lower near‑term EPS amid extended timelines and financing costs; Street may recalibrate on the regulatory deferment and trial design clarity post‑December .
• Portfolio optionality: IO112 and IO170 preclinical data broaden the T‑win platform scope; IND for IO112 anticipated in 2026 provides medium‑term pipeline catalysts .
• Trading implications: Stock likely sensitive to December FDA meeting outcome and any partnership/financing announcements; PD‑L1‑negative subgroup data may support strategic interest despite headline miss on primary endpoint .