COPENHAGEN - IO Biotech (NASDAQ:IOBT), a Danish biopharmaceutical firm with a market capitalization of $50 million, has obtained a loan facility of up to €57.5 million from the European Investment Bank (EIB) to advance its therapeutic cancer vaccines, including IO102-IO103, which is expected to reach a Biologics License Application (BLA) submission in 2025. According to InvestingPro analysis, the company appears undervalued at its current price of $0.76, with analysts setting price targets between $6 and $12. The company anticipates the funding to extend its financial runway into the second quarter of 2026.
The loan consists of three committed tranches totaling €37.5 million and an uncommitted accordion tranche of €20 million. The initial two tranches are expected to be disbursed in the first quarter of 2025, subject to the company meeting certain conditions. InvestingPro data reveals the company maintains a strong liquidity position with a current ratio of 5.37, indicating solid ability to meet short-term obligations. This loan comes at a crucial time, as InvestingPro identifies rapid cash consumption as a key consideration for investors. Additionally, IO Biotech must satisfy specific requirements within 36 months to access Tranche C, which includes securing an additional $50 million and filing for marketing authorization in the U.S. or the EU.
Amy Sullivan, IO Biotech's CFO, stated that the EIB's support will significantly contribute to the development and pre-commercialization efforts of their cancer vaccine candidates. The loan facility is unsecured, with no minimum cash covenants, and each tranche has a six-year maturity from the date of disbursement. The loan will accrue interest, with payment deferred until each tranche's maturity.
IO102-IO103 is an off-the-shelf therapeutic cancer vaccine that targets tumor and immune-suppressive cells by stimulating T cells against IDO1 positive and/or PD-L1 positive cells. The vaccine has received Breakthrough Therapy Designation from the FDA for advanced melanoma treatment and is currently being evaluated in several clinical trials.
The EIB's commitment is part of its strategy to back biotech companies with advanced expertise in areas like immuno-oncology. IO Biotech's T-Win® platform underpins their vaccine development, focusing on activating T cells against the immunosuppressive cells in the tumor microenvironment.
This financial move highlights the EIB's role in supporting innovative biotech ventures within the EU and reflects IO Biotech's progress in the biopharmaceutical landscape. While the company's stock has declined 48% over the past year, InvestingPro maintains a FAIR overall financial health rating, with additional insights available to subscribers, including 5 more exclusive ProTips and comprehensive financial metrics. The information for this report is based on a press release statement from IO Biotech and InvestingPro data.
In other recent news, IO Biotech, a pharmaceutical company, has reported promising results from a Phase 2 trial of its lead investigational candidate, IO102-IO103, showing potential in treating patients with metastatic non-small cell lung cancer. The biopharmaceutical company also revealed encouraging pre-clinical data for its second vaccine candidate, IO112, indicating its potential for tumor growth inhibition. In addition to these developments, IO Biotech has amended its bylaws and adjusted its fiscal year-end, according to a recent SEC filing. Analyst firms Piper Sandler and Morgan Stanley (NYSE:MS) have maintained an Overweight rating on IO Biotech, while Jefferies and H.C. Wainwright kept their Buy ratings. These ratings were influenced by recent data from the European Society for Medical (TASE:PMCN) Oncology conference and abstract data for IO Biotech's IO102-103. Despite the company's Phase 3 trial not meeting the interim analysis objective response rate, the Independent (LON:IOG) Data Monitoring Committee recommended the continuation of the study. The primary progression-free survival analysis is expected in the first half of 2025. Lastly, Kathleen Sereda Glaub, Peter Hirth, and Mai-Britt Zocca were elected as class III directors, serving until the 2027 Annual Meeting of Stockholders. These are the recent developments for IO Biotech.
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