IO Biotech has entered into a collaborative agreement with Merck & Co (NYSE: MRK), known as MSD outside the US and Canada, through a subsidiary, to clinically evaluate IO102 in combination with Keytruda (pembrolizumab) in patients with non-small cell lung cancer, the private Danish company disclosed on Monday.

IO102, IO Biotech's lead candidate, is an IDO-derived immune modulating therapy with dual mode of action killing both cancer and immune-suppressive cells.

The company's other IDO-derived immune modulating therapies have previously shown a favourable safety profile, as well as signs of promising anti-tumour activity in a first-in-man trial of heavily pre-treated patients with NSCLC.

The terms of the collaboration state that IO Biotech will conduct an international Phase 1/2 study to evaluate the combination of IO102 with MSD's anti-PD-1 therapy. The study will involve an open-label, randomised, Phase 1/2 trial investigating the safety and efficacy of IO1012 in combination with pembrolizumab, with or without chemotherapy, as first-line treatment for patients with metastatic non-small cell lung cancer.

IO Biotech will sponsor the clinical trials, while MSD will provide the trial with Keytruda. The two companies will share the rights to the study results, but IO Biotech will maintain global commercial rights to IO102.