IO Biotech weighs strategic options months after FDA advises against melanoma vaccine filing

The announcement follows a September 2025 decision to cut roughly half of the company’s headcount, after regulators signaled that the clinical data generated by IO’s late-stage melanoma program were insufficient to support a biologics license application.

The IO Biotech history

Since it was founded in 2014, IO Biotech has focused on developing cancer vaccines. The company’s programs are built around its T-win platform, which induces T-cell responses against antigens expressed by immune-suppressive cells in the tumor microenvironment.

IO’s lead asset, Cylembio, is a combination of two peptide vaccines, IO102 and IO103, developed for use alongside checkpoint inhibitors. The vaccines are designed to stimulate T cells against IDO1- and PD-L1-expressing cells. Cylembio is developed as an off-the-shelf approach intended to be broadly applicable across patients, and until a few months ago, the program was showing promise.

The clinical program was initially supported by results from a phase 1/2 trial evaluating IO102 and IO103 in combination with nivolumab in patients with previously untreated metastatic melanoma. Long-term follow-up data from the study showed durable responses, including extended progression-free and overall survival in a subset of patients, compared with historical outcomes for anti-PD-1 therapy alone. 

On the strength of the early-stage melanoma data, the FDA granted Breakthrough Therapy Designation in December 2020 to the vaccine in combination with anti-PD-1 therapy in unresectable or metastatic melanoma. IO later expanded clinical testing to other tumor types, including head and neck squamous cell carcinoma and non-small cell lung cancer, where the combination generated signs of clinical activity but did not progress beyond exploratory development.

IO Biotech listed its shares on Nasdaq in November 2021, raising approximately $115 million in the process to fund the phase 3 development of the melanoma program. Since the IPO, the company has remained largely centered on advancing that single lead asset.

What went wrong: from narrow miss to strategic review

The turning point wasn’t that Cylembio failed outright in phase 3; it was that the program landed in the middle ground between being clinically interesting and filing-ready.

In August 2025, IO Biotech reported that its pivotal phase 3 melanoma trial improved median progression-free survival for Cylembio plus pembrolizumab versus pembrolizumab alone, but narrowly missed the prespecified threshold for statistical significance on its primary endpoint. 

Despite the narrow miss, IO initially framed the dataset as something it could still take to regulators. That plan effectively changed on September 29, 2025, after a pre-BLA (Biologics License Application) meeting with the FDA. IO said the agency recommended it not submit a biologics license application based on the phase 3 dataset as it stood. At the time, the company said it would continue discussions with the FDA to align on the design of a potential new registrational study.

However, the operational consequences were immediate. On the same day as the FDA update, IO announced a restructuring that included an approximately 50% staff reduction, as it tried to conserve capital while it figured out what a new registrational path would look like. IO also disclosed at the time that it had capital to run operations into the first quarter of 2026, which explains why the story didn’t end with the September cuts.

That runway, plus the prospect that a new registrational trial would mean more time and money, is what sets up this week’s news. Indeed, IO is now exploring strategic alternatives, including a merger, business combination, asset sale, or liquidation/dissolution, and warned it is evaluating additional workforce reductions and other cost-cutting measures during the process. 

IO Biotech’s valuation has fallen sharply since its regulatory setback last year, declining further after yesterday’s announcement. The company’s market capitalization now stands at around $14.9 million, down from roughly $140 million before the FDA advised against the filing back in September.

However, it seems the area still attracts investors. IO Biotech’s announcement came on the same day as the seed round of another cancer vaccine-focused company, Infinitopes. IO’s trajectory could serve as a cautionary tale until we know more about the next steps of its strategic reevaluation.