** Shares of biotech firm IO Biotech IOBT.O fall 77.8% to 35 cents

** Company says the FDA has recommended IO Biotech to not submit an application based on data from the late-stage study and will need a second one

** In the late-stage study, the company was testing Cylembio in combination with Merck's MRK.N Keytruda for treating advanced skin cancer in which the results narrowly missed statistical significance

** IOBT plans to continue the dialogue with FDA to align on the design of a potential new study for Cylembio

** "While this is not the outcome we had hoped for, we respect FDA's feedback and remain confident in the therapeutic potential of Cylembio," said CEO Mai-Britt Zocca

** IOBT expects to incur a non-recurring charge of between $1 million and $1.5 million in Q3 2025 related to the restructuring, which includes around 50% reduction in full-time employees

** H.C. Wainwright expects the launch of Cylembio in 2029, rather than prior estimate of 2026

** Including session's move, stock down 61.8% YTD

(Reporting by Siddhi Mahatole)

((siddhi.mahatole@thomsonreuters.com))