PART I. FINANCIAL INFORMATION This section presents the company's unaudited interim financial statements and related disclosures Item 1. Interim Financial Statements (Unaudited) This section presents the unaudited consolidated financial statements, including the balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, statements of cash flows, and accompanying notes, providing a snapshot of the company's financial position and performance for the three months ended March 31, 2024 Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Cash and cash equivalents | $117,982 | $143,193 | | Total current assets | $124,128 | $147,255 | | Total assets | $128,159 | $150,718 | | Total current liabilities | $11,043 | $15,717 | | Total liabilities | $12,693 | $17,556 | | Total stockholders' equity | $115,466 | $133,162 | Consolidated Statements of Operations and Comprehensive Loss This section details the company's financial performance over a period, including revenues, expenses, and net loss | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (Amount) (in thousands) | Change (Percent) | | :-------------------------- | :----------------------------------------------- | :----------------------------------------------- | :----------------------------- | :--------------- | | Research and development | $14,311 | $11,900 | $2,411 | 20.3% | | General and administrative | $5,886 | $6,024 | $(138) | (2.3)% | | Total operating expenses | $20,197 | $17,924 | $2,273 | 12.7% | | Loss from operations | $(20,197) | $(17,924) | $(2,273) | 12.7% | | Total other income (expense), net | $1,155 | $1,286 | $(131) | (10.2)% | | Net loss | $(19,457) | $(17,044) | $(2,413) | 14.2% | | Net loss per common share, basic and diluted | $(0.30) | $(0.59) | | | Consolidated Statements of Stockholders' Equity This section outlines changes in the company's equity accounts, reflecting transactions with owners and comprehensive income or loss | Metric | Balance, January 1, 2024 (in thousands) | Balance, March 31, 2024 (in thousands) | | :------------------------- | :-------------------------------------- | :------------------------------------- | | Additional Paid-In Capital | $406,587 | $408,154 | | Accumulated Deficit | $(263,822) | $(283,279) | | Total Stockholders' Equity | $133,162 | $115,466 | - Equity-based compensation for the three months ended March 31, 2024, was $1,567 thousand, contributing to the change in additional paid-in capital23 Consolidated Statements of Cash Flows This section summarizes the cash inflows and outflows from operating, investing, and financing activities over a period | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :---------------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Net cash used in operating activities | $(24,932) | $(14,690) | | Net cash used in investing activities | $(11) | $(148) | | Net cash provided by financing activities | $— | $— | | Net decrease in cash, cash equivalents and restricted cash | $(24,943) | $(14,838) | | Cash, cash equivalents and restricted cash, end of period | $118,250 | $128,795 | Notes to Consolidated Financial Statements This section provides detailed explanations and additional information supporting the figures presented in the consolidated financial statements - IO Biotech, Inc. is a clinical-stage biopharmaceutical company developing novel, immune-modulating therapeutic cancer vaccines based on its T-win® platform29 - The company completed an IPO in November 2021, raising $103.3 million in net proceeds, and a private placement in August 2023, raising $71.9 million in net proceeds3234 - As of March 31, 2024, the company had an accumulated deficit of $283.3 million and expects its $118.0 million in cash and cash equivalents to fund operations for at least 12 months from the financial statements' issuance date40 - The company has multiple clinical collaborations with MSD International GmbH (MSDIG) and MSD International Business GmbH (MSDIB) to evaluate IO102-IO103 in combination with KEYTRUDA® for various cancer types, including metastatic non-small cell lung cancer, squamous cell carcinoma of the head and neck, urothelial bladder cancer, and metastatic melanoma50515253 | Expense Category | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Research and development | $613 | $704 | | General and administrative | $954 | $1,184 | | Total equity-based compensation | $1,567 | $1,888 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides an overview of the company's financial condition and operational results, highlighting its clinical-stage development, progress of its lead product candidate IO102-IO103, and future funding requirements. The company anticipates reaching the primary endpoint for its Phase 3 trial in 1H 2025 and expects an interim analysis outcome in Q3 2024 - The company's lead therapeutic cancer vaccine candidate, IO102-IO103, is designed to target immunosuppressive mechanisms mediated by indoleamine 2,3-dioxygenase (IDO) and programmed death ligand 1 (PD-L1)84 - The Phase 3 pivotal trial for IO102-IO103 in combination with pembrolizumab for first-line advanced melanoma completed target enrollment of 407 patients in November 2023, ahead of schedule85 - The primary endpoint of Progression Free Survival (PFS) for the Phase 3 trial is now anticipated in 1H 2025, accelerated from the previously projected 2H 2025. An interim analysis of Overall Response Rate (ORR) is expected in Q3 20248687 - The company is also evaluating IO102-IO103 in a Phase 2 basket trial (IOB-022/KN-D38) for first-line metastatic non-small cell lung cancer (NSCLC) and squamous cell carcinoma of the head and neck (SCCHN), with 58 patients enrolled as of March 31, 202496 - A Phase 2 neo-adjuvant/adjuvant trial (IOB-032/PN-E40) for resectable melanoma and SCCHN is ongoing, with 15 patients enrolled in melanoma cohort A and 7 in SCCHN cohort B, and plans to enroll an additional 30 patients in cohort C97 - Preclinical development continues for IO112 (targeting Arginase 1), with an IND filing expected in 2025, and for IO170 (targeting TGFβ1) in 202499101 | Financial Metric (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change (Amount) | Change (Percent) | | :------------------------------ | :-------------------------------- | :-------------------------------- | :-------------- | :--------------- | | Net Loss | $(19,457) | $(17,044) | $(2,413) | 14.2% | | Research and Development | $14,311 | $11,900 | $2,411 | 20.3% | | General and Administrative | $5,886 | $6,024 | $(138) | (2.3)% | | Other Income (Expense), Net | $1,155 | $1,286 | $(131) | (10.2)% | - Research and development expenses increased by $2.4 million (20.3%) primarily due to increased preclinical studies and clinical trial-related activities for IO102-IO103, including the pivotal Phase 3 trial, and higher personnel costs, partially offset by a decrease in chemistry, manufacturing, and control activities120 - As of March 31, 2024, cash and cash equivalents were $118.0 million, which is expected to fund operating expenses and capital requirements into the fourth quarter of 2025127 | Cash Flow Activity (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(24,932) | $(14,690) | | Net cash used in investing activities | $(11) | $(148) | | Net cash provided by financing activities | $— | $— | Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company as defined by Item 10 of Regulation S-K and is therefore not required to provide quantitative and qualitative disclosures about market risk161 Item 4. Controls and Procedures Management, with the participation of the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures as of March 31, 2024, and concluded they were effective. There were no material changes in internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2024164 - There has been no change in the company's internal control over financial reporting during the most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting166 PART II. OTHER INFORMATION This section covers various non-financial disclosures, including legal proceedings, risk factors, and equity security information Item 1. Legal Proceedings The company is not currently involved in any material legal proceedings and believes that any litigation arising in the ordinary course of business will not have a material adverse effect - The company is not currently a party to any material legal proceedings169 Item 1A. Risk Factors This section outlines numerous risks critical to the company's business, including its limited operating history, substantial funding needs, inherent uncertainties in product development and regulatory approval, manufacturing complexities, intense market competition, and challenges in protecting intellectual property. It also covers operational, compliance, and market-related risks - The company has a limited operating history, has incurred net losses since inception ($19.5 million for Q1 2024), and anticipates continued significant losses, requiring substantial additional funding beyond Q4 2025175177178 - All product candidates are in clinical or preclinical development, and there is no assurance of successful advancement through clinical trials, regulatory approval, or commercialization, with potential for significant delays or failures185188 - The company relies on third-party Contract Manufacturing Organizations (CMOs) for product candidate manufacturing, which is complex and carries risks of production difficulties, quality control issues, and supply interruptions that could delay clinical trials or commercialization244245277 - The company faces substantial competition in the oncology market from large pharmaceutical and biotechnology companies with significantly greater financial resources and expertise, which could impact its ability to commercialize products successfully312314316 - Maintaining sufficient intellectual property protection for its T-win® platform and product candidates is critical, but the company faces risks from challenges to patent validity, infringement claims by third parties, and difficulties in enforcing trade secrets347362380 - The company is subject to various privacy and data security laws (e.g., EU GDPR, UK GDPR, CCPA) and faces risks of security breaches, data loss, or non-compliance, which could result in regulatory investigations, reputational damage, and significant liabilities339340417418 - The stock price of the common stock is highly volatile and can be affected by clinical trial results, regulatory developments, competition, and broader market conditions, potentially leading to loss of investment387388 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the use of proceeds from the company's November 2021 IPO, confirming that $103.3 million in net proceeds were raised and there has been no material change in their intended use - The company raised $103.3 million in net proceeds from its IPO in November 2021, after deducting underwriting discounts and commissions and other offering expenses432 - There has been no material change in the use of proceeds from the IPO as described in the prospectus433 Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - There were no defaults upon senior securities434 Item 4. Mine Safety Disclosures The company reported no mine safety disclosures - There are no mine safety disclosures435 Item 5. Other Information The company reported no other information under this item - No other information is reported under this item436 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including various certifications and XBRL documents - The exhibits include certifications from the Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101.INS, 101.SCH, 104)438 Signatures The report is duly signed on behalf of IO Biotech, Inc. by its Chief Executive Officer and Chief Financial Officer - The report was signed by Mai-Britt Zocca, Ph.D., Chief Executive Officer and Director, and Amy Sullivan, Chief Financial Officer, on May 14, 2024440
IO Biotech(IOBT) - 2024 Q1 - Quarterly Report