IO Biotech (IOBT) Down Despite Positive Update on Melanoma Study
IO Biotech IOBT announced the enrollment of 225 patients in its global phase III study evaluating IO102-IO103, in combination with Merck’s MRK Keytruda (pembrolizumab), for the treatment of advanced melanoma in patients. This marks a significant milestone as the phase III study protocol calls for an interim analysis of the overall response rate one year after 225 patients have been enrolled.
Per IO Biotech, subject to positive results from the interim analysis, a biologics license application could be filed for the IO102-IO103/Keytruda combo for accelerated approval in the United States.
Despite IO Biotech’s announcement regarding achieving a clinical milestone, the stock of the company declined about 25% on Wednesday. The stock price drop is likely because the company anticipates running out of cash to support operating activities at the end of the third quarter of 2024. Thus, negative results from the interim analysis of the phase III IO102-IO103/Keytruda combo study could lead to discontinuation of the same and at the same time, put IOBT’s collaboration agreement with Merck in jeopardy.
Year to date, shares of IO Biotech have plunged 30% compared with the industry’s 6.3% fall.
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The late-stage study is being conducted in collaboration with Merck. The phase III study is evaluating IO102-IO103, an investigational cancer vaccine, in combination with Keytruda, against Keytruda alone for the treatment of patients with previously untreated, unresectable or metastatic (advanced) melanoma. Per the agreement, IO Biotech is sponsoring the phase III study and Merck is supplying Keytruda. However, IOBT retains global commercial rights to IO102-IO103.
Additionally, the company also announced increasing the number of patients to be enrolled in the phase III study to 380 patients to potentially accelerate the time to reach the primary endpoint of progression-free survival (PFS). Subject to the study meeting its primary endpoint of PFS, IO Biotech plans to submit marketing applications globally.
We would like to remind the investors that Merck’s blockbuster oncology drug, Keytruda, is approved for several types of cancer, accounting alone for around 40% of Merck’s pharmaceutical sales. Keytruda is presently approved to treat seven indications in earlier-stage cancers in the United States. The drug is continuously growing and expanding into new indications and markets globally.
IO Biotech, Inc. Price and Consensus
IO Biotech, Inc. price-consensus-chart | IO Biotech, Inc. Quote
Zacks Rank and Stocks to Consider
IO Biotech currently has a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the biotech sector are Adaptimmune Therapeutics ADAP and Akero Therapeutics AKRO, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 90 days, the Zacks Consensus Estimate for Adaptimmune Therapeutics’ 2023 loss per share has remained stable at 46 cents. During the same period, the estimate for Adaptimmune Therapeutics’ 2024 loss per share has narrowed from 74 cents to 56 cents. Year to date, shares of ADAP have fallen by 28.8%.
ADAP beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 36.89%.
In the past 90 days, the Zacks Consensus Estimate for Akero Therapeutics’ 2023 loss per share has narrowed from $3.46 to $2.80. During the same period, the estimate for Akero Therapeutics’ 2024 loss per share has narrowed from $3.66 to $3.27. Year to date, shares of AKRO have gained by 0.7%.
AKRO beat estimates in three of the trailing four quarters, missing the mark on one occasion, delivering an average earnings surprise of 7.96%.
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