IO Biotech Secures €57.5 Million Debt Financing from European Investment Bank

On December 19, 2024, IO Biotech, Inc. (NASDAQ: IOBT) entered into a Finance Contract with the European Investment Bank (EIB) for a debt financing arrangement that could provide up to €57.5 million. The Finance Contract involves three tranches of financing totaling €37.5 million, subject to specific conditions, and an additional uncommitted tranche of €20 million.

The initial tranche of €10.0 million will be available for drawing in January 2025, followed by potential additional tranches of €12.5 million and €15.0 million, subject to meeting specified milestones and conditions. The proceeds from these loans are intended to fund ongoing clinical trials by IO Biotech, primarily focusing on the development of immune-modulating therapeutic cancer vaccines.

Additionally, IO Biotech agreed to issue warrants to EIB as part of the agreement. These warrants will allow EIB to purchase shares of IO Biotech’s common stock based on predetermined formulas at the time of issuance. Each loan tranche bears an 8% fixed interest rate, payable at maturity, which is set to be six years after disbursement.

In parallel with the Finance Contract, IO Biotech also signed a Guarantee Agreement with EIB, providing a payment guarantee in favor of EIB for the Borrower’s obligations. The Finance Contract, Guarantee Agreement, and associated agreements contain representations, warranties, and covenants intended to allocate risks between the parties involved.

Apart from the debt financing, IO Biotech announced the execution of a non-binding side letter with EIB, allowing for the potential availability of an additional €20.0 million related to the Company’s clinical trials. The transaction involved various agreements including a Warrant Issuance Agreement and a Registration Rights Agreement to facilitate the issuance of warrants and to register the issued common stock.

The Company specified that none of the securities issued under these agreements had been registered under the Securities Act of 1933, relying on an exemption from registration requirements. In conjunction with this transaction, IO Biotech issued a press release on December 19, 2024, detailing the EIB Loan Facility and anticipations of extending its cash runway into the second quarter of 2026.

The terms of all agreements are detailed in the official filings submitted to the Securities and Exchange Commission (SEC) and are meant to provide investors with information regarding the transaction. The company’s efforts to secure this debt financing signify a strategic move in advancing its therapies and extending financial runway to support ongoing initiatives.

For media inquiries, please contact Julie Funesti at Salutem and for investor relations, Maryann Cimino at IO Biotech, Inc.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read IO Biotech’s 8K filing here.

IO Biotech Company Profile

IO Biotech, Inc, a clinical-stage biopharmaceutical company, develops immune-modulating therapeutic cancer vaccines based on the T-win technology platform. The company's lead product candidate, IO102-IO103, which is designed to target immunosuppressive mechanisms mediated by Indoleamine 2,3-dehydrogenase (IDO), and programmed death-ligand (PD-L1) that is in phase 3 clinical trial to treat melanoma, as well as in phase 2 clinical trial to treat lung, head and neck, bladder, and melanoma cancer.