IO Biotech Faces FDA Rejection of Cylembio, Plans New Melanoma Study, Cuts Workforce 50%

IO Biotech announced a significant restructuring plan that includes a 50% workforce reduction, aiming to conserve capital as it focuses on advancing its cancer vaccine candidate, Cylembio. This decision follows the FDA's recommendation against submitting a Biologics License Application based on the IOB-013 trial data, which narrowly missed statistical significance for progression-free survival. Despite this setback, IO Biotech plans to continue discussions with FDA and European regulators to design a new registrational study and pursue regulatory approval. The restructuring is expected to result in one-time charges between $1.0 and $1.5 million and is intended to reduce ongoing expenses, with current capital sufficient to operate into early 2026. IO Biotech remains confident in Cylembio's therapeutic potential and is committed to completing ongoing studies amid financial and regulatory challenges. The company's stock is rated as a Buy by some analysts, though technical analysis suggests neutral momentum due to the typical risks faced by clinical-stage biotech firms awaiting commercialization.