PART I. FINANCIAL INFORMATION This section presents the company's unaudited interim financial statements and management's discussion and analysis Item 1. Interim Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements and notes, detailing financial position, performance, and cash flows Condensed Consolidated Balance Sheets Condensed Consolidated Statements of Operations and Comprehensive Loss Condensed Consolidated Statements of Stockholders' Equity Condensed Consolidated Statements of Cash Flows Notes to Condensed Consolidated Financial Statements 1. Description of Business, Organization and Liquidity 2. Summary of Significant Accounting Policies 3. Fair Value Measurements 4. License and Collaboration Agreements 5. Prepaid Expenses and Other Current Assets 6. Property and Equipment, Net 7. Accrued Expenses and Other Current Liabilities 8. Leases 9. Commitments and Contingencies 10. Stockholders' Equity 11. Equity-Based Compensation 12. Income Taxes 13. Net Loss Per Share 14. Subsequent Events Condensed Consolidated Balance Sheets (September 30, 2023 vs. December 31, 2022) | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | :------- | | Cash and cash equivalents | $165,501 | $142,590 | $22,911 | 16.1% | | Total current assets | $168,254 | $148,219 | $20,035 | 13.5% | | Total assets | $172,553 | $151,805 | $20,748 | 13.7% | | Total current liabilities | $12,985 | $10,676 | $2,309 | 21.6% | | Total liabilities | $14,961 | $12,951 | $2,010 | 15.5% | | Total stockholders' equity | $157,592 | $138,854 | $18,738 | 13.5% | | Accumulated deficit | $(237,640) | $(177,739) | $(59,901) | 33.7% | Condensed Consolidated Statements of Operations and Comprehensive Loss (Three Months Ended Sep 30, 2023 vs. 2022) | Metric | Sep 30, 2023 (in thousands) | Sep 30, 2022 (in thousands) | Change (in thousands) | % Change | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | :------- | | Research and development expenses | $17,655 | $10,022 | $7,633 | 76.2% | | General and administrative expenses | $5,829 | $5,843 | $(14) | (0.2)% | | Total operating expenses | $23,484 | $15,865 | $7,619 | 48.0% | | Loss from operations | $(23,484) | $(15,865) | $(7,619) | 48.0% | | Total other income (expense), net | $1,366 | $292 | $1,074 | 367.8% | | Net loss | $(21,679) | $(15,688) | $(5,991) | 38.2% | | Net loss per common share, basic and diluted | $(0.43) | $(0.54) | $0.11 | (20.4)% | Condensed Consolidated Statements of Operations and Comprehensive Loss (Nine Months Ended Sep 30, 2023 vs. 2022) | Metric | Sep 30, 2023 (in thousands) | Sep 30, 2022 (in thousands) | Change (in thousands) | % Change | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | :------- | | Research and development expenses | $46,059 | $32,553 | $13,506 | 41.5% | | General and administrative expenses | $17,201 | $18,482 | $(1,281) | (6.9)% | | Total operating expenses | $63,260 | $51,035 | $12,225 | 24.0% | | Loss from operations | $(63,260) | $(51,035) | $(12,225) | 24.0% | | Total other income (expense), net | $3,858 | $(66) | $3,924 | (5945.5)% | | Net loss | $(59,901) | $(51,387) | $(8,514) | 16.6% | | Net loss per common share, basic and diluted | $(1.66) | $(1.78) | $0.12 | (6.7)% | Condensed Consolidated Statements of Cash Flows (Nine Months Ended Sep 30, 2023 vs. 2022) | Metric | Sep 30, 2023 (in thousands) | Sep 30, 2022 (in thousands) | Change (in thousands) | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Net cash used in operating activities | $(48,942) | $(47,203) | $(1,739) | | Net cash used in investing activities | $(211) | $(341) | $130 | | Net cash provided by financing activities | $71,870 | $0 | $71,870 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $22,717 | $(47,544) | $70,261 | - The Company completed a private placement on August 9, 2023, selling 37,065,647 shares of common stock and an equal number of warrants at $2.025 per share and warrant, generating net proceeds of $71.9 million for general corporate purposes3571106136 - As of September 30, 2023, the Company had an accumulated deficit of $237.6 million and cash and cash equivalents of $165.5 million, which are expected to fund operations into the fourth quarter of 2025. Additional funding will be necessary for future clinical and preclinical activities41107110135146153 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on financial condition, operations, clinical developments, and liquidity Overview Components of Operating Results Results of Operations Liquidity and Capital Resources Critical Accounting Policies and Significant Judgments and Estimates Off-Balance Sheet Arrangements Emerging Growth Company ("EGC") Status - IO Biotech is a clinical-stage biopharmaceutical company developing novel, immune-modulating therapeutic cancer vaccines based on its T-win technology platform. The lead candidate, IO102-IO103, targets IDO and PD-L1, designed to kill tumor cells and immune-suppressive cells, and modulate the tumor microenvironment31899194 - IO102-IO103 was granted Breakthrough Therapy Designation (BTD) by the FDA for unresectable/metastatic melanoma. The Phase 1/2 MM1636 trial demonstrated a confirmed overall response rate (ORR) of 73% and a complete response rate (CRR) of 50% in metastatic melanoma patients, with a median PFS of 25.5 months8995 - The Phase 3 IOB-013/KN-D18 trial for advanced melanoma was fully enrolled in November 2023, with an increased target of 380 patients. An interim analysis for ORR is expected mid-2024, with results in 3Q24, potentially supporting accelerated approval. Phase 2 basket trials (IOB-022 for NSCLC/SCCHN and IOB-032 for neo-adjuvant/adjuvant solid tumors) are also underway, showing encouraging early efficacy signals90979899 - The pipeline includes IO112, targeting Arginase 1, currently in a Phase 1 trial, and IO170, targeting TGFβ1, in preclinical studies101103 Operating Expenses (Three Months Ended Sep 30, 2023 vs. 2022) | Expense Category | Sep 30, 2023 (in thousands) | Sep 30, 2022 (in thousands) | Change (in thousands) | % Change | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | :------- | | Research and development | $17,655 | $10,022 | $7,633 | 76.2% | | General and administrative | $5,829 | $5,843 | $(14) | (0.2)% | Operating Expenses (Nine Months Ended Sep 30, 2023 vs. 2022) | Expense Category | Sep 30, 2023 (in thousands) | Sep 30, 2022 (in thousands) | Change (in thousands) | % Change | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | :------- | | Research and development | $46,059 | $32,553 | $13,506 | 41.5% | | General and administrative | $17,201 | $18,482 | $(1,281) | (6.9)% | - Cash and cash equivalents were $165.5 million as of September 30, 2023. The company expects current cash to fund operations into Q4 2025, but additional financing will be required for future clinical and preclinical activities110138146 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company, as a smaller reporting company, is not required to provide detailed quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is exempt from providing detailed market risk disclosures174 Item 4. Controls and Procedures Management concluded disclosure controls were effective, remediating a prior material weakness with no new material changes - Management concluded that disclosure controls and procedures were effective as of September 30, 2023175176 - A material weakness in internal control over financial reporting, previously disclosed as of December 31, 2021, was remediated by December 31, 2022178179 - No material changes in internal control over financial reporting occurred during the most recently completed fiscal quarter180 PART II. OTHER INFORMATION This section provides other required information, including legal proceedings, risk factors, equity sales, and exhibits Item 1. Legal Proceedings The company is not currently a party to any material legal proceedings and does not believe that ordinary course litigation will have a material adverse effect on its business - The company is not currently involved in any material legal proceedings182 - Litigation, even if not material, can adversely impact the company due to defense costs, settlement costs, and diversion of management resources182 Item 1A. Risk Factors The company's business faces various risks, with global instability posing a new potential adverse impact - Global economic and political instability and conflicts (e.g., Russia/Ukraine, Middle East) could adversely affect business, financial condition, or results of operations184 - Conflicts in the Middle East may delay or hinder clinical trials, affecting patient enrollment and retention, and increasing costs184 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the August 2023 private placement, raising $71.9 million, and confirms no change in IPO proceeds use - In August 2023, the company completed a private placement, issuing 37,065,647 shares of common stock and an equal number of warrants, generating $71.9 million in net proceeds for general corporate purposes186187 - The November 2021 IPO raised $103.3 million in net proceeds from the sale of 8,222,500 common shares, with no material change in the planned use of these proceeds188189190 Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - No defaults upon senior securities were reported191 Item 4. Mine Safety Disclosures The company reported no mine safety disclosures - No mine safety disclosures were reported192 Item 5. Other Information The company reported no other information - No other information was disclosed193 Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including agreements, certifications, and XBRL documents - Key exhibits filed include the Securities Purchase Agreement, Registration Rights Agreement, a severance agreement with Eva Ehrnrooth, certifications of principal executive and financial officers, and Inline XBRL documents194 Signatures This section contains the required signatures for the quarterly report on Form 10-Q
IO Biotech(IOBT) - 2023 Q3 - Quarterly Report