Inclusion Criteria:

• Histologically confirmed diagnosis of early-rectal cancer clinically staged T1-T2 N0 M0 by MRI (American Joint Committee on Cancer (AJCC) staging 8th edition, 2017).

• The tumor must confirmed to be MSS/MMRp by local testing.

• The tumor must be evaluable by endoscopy.

• Voluntarily agree to participate by giving signed, dated, and written informed consent prior to any study-specific procedures.

• Age ≥ 18 years of age. Because no dosing or adverse event data are currently available on the use of botensilimab with balstilimab in participants < 18 years of age, children are excluded from this study.

• Measurable rectal primary on baseline imaging by MRI. The tumor must be definitively at least T1.

• Eastern Cooperative Oncology Group (ECOG) performance status of 0 or 1.

• Adequate organ function defined as the following laboratory values within 7 days of Cycle 1 Day 1 (C1D1):

  • Neutrophils ≥ 1500/μL (Must be stable and off any growth factor within 4 weeks of first study treatment administration).
  • Platelets ≥ 50× 103/μL.
  • Hemoglobin ≥ 8.0 g/dL (transfusion to achieve this level is not permitted within 2 weeks of first study treatment administration).
  • Creatinine clearance ≥ 30 mL/min as measured or calculated per local institutional standards.
  • Aspartate aminotransferase/alanine aminotransferase ≤ 1.5 × upper limit of normal (ULN).
  • Total bilirubin ≤ 1.5 × ULN (except patients with Gilbert syndrome who must have a total bilirubin level of ≤ 3.0 × ULN).

• All participants must undergo multidisciplinary evaluation by a qualified colorectal surgeon, medical oncologist, and radiation oncologist to discuss treatment options for rectal cancer.

  • Per the treating surgeon, the patient must be a candidate for both TES and/or TME for rectal cancer.
  • Per the treating medical oncologist, the patient must be a candidate for standard chemotherapy for rectal cancer.
  • Per the treating radiation oncologist, the patient must be a candidate for standard radiation/chemoradiotherapy for rectal cancer.

• The effects of botensilimab with balstilimab on the developing human fetus are unknown. For this reason, women of child-bearing potential (WOCBP) and men enrolled in this study must agree to use highly effective contraceptive measures (See Section 3.4) starting with the Screening Visit through 90 days after the last dose of study treatment. See section 3.4 for more detailed information on contraception requirements.

• Ability to understand and the willingness to sign a written informed consent document.

Exclusion Criteria:

• Tumor is MSI-H/MMRd per any local testing.

• Known TMB >20mut/Mb or indication for immune checkpoint inhibitor therapy including hypermutated cancers.

• Received prior anti-CTLA-4 or anti-PD-1/PD-L1 therapy and/or other experimental immunologic agents.

• Partial or complete bowel obstruction within the last 3 months, signs/symptoms of bowel obstruction, or known radiologic evidence of impending obstruction.

• Uncontrolled irritable bowel syndrome with predominant diarrhea (IBS-D) and/or other uncontrolled, chronic diarrhea syndromes.

• Presence of rectal cancer metastases.

• Stigmata of hepatic decompensation including a history of variceal bleeding, a history of ascites related to hepatic cirrhosis, or severe portal hypertension.

• Clinically significant (i.e., active) cardiovascular disease: cerebral vascular accident/stroke or myocardial infarction within 6 months of enrollment, unstable angina, congestive heart failure (New York Heart Association class ≥ III), or serious uncontrolled cardiac arrhythmia requiring medication.

• Concurrent malignancy (present during screening) requiring treatment or history of prior malignancy active within 2 years prior to the first dose of study treatment, i.e., patients with a history of prior malignancy are eligible if treatment was completed at least 2 years before the first dose of study treatment and the patient has no evidence of disease. Patients with history of prior early-stage basal/squamous cell skin cancer, low-risk prostate cancer eligible for active surveillance, or noninvasive or in situ cancers who have undergone definitive treatment at any time are also eligible.

• Treatment with one of the following classes of drugs within the delineated time window prior to C1D1:

  • Cytotoxic, targeted therapy or other investigational therapy within 3 weeks.
  • Investigational monoclonal antibodies, antibody-drug conjugates, radioimmunoconjugates, or similar therapy, within 4 weeks, or 5 half-lives, whichever is shorter.
  • Small molecule/tyrosine kinase inhibitors within 2 weeks or less than 5 circulating half- lives of investigational drug.

• Prior therapy for rectal cancer.

• Prior pelvic radiation therapy.

• Prior treatment for rectal cancer.

• Known allergy or hypersensitivity to any of the study drugs or any of the study drug excipients.

• Any evidence of current interstitial lung disease (ILD) or pneumonitis, or prior history of ILD or non-infectious pneumonitis requiring glucocorticoids.

• History of allogeneic organ transplant.

• Psychiatric or substance abuse disorders that would interfere with cooperation with the requirements of the study.

• Patients with a condition requiring systemic treatment with either corticosteroids (> 10 mg daily prednisone equivalent) within 14 days or another immunosuppressive medication within 30 days of the first dose of study treatment. Inhaled or topical steroids, and adrenal replacement steroid doses (≤ 10 mg daily prednisone equivalent) are permitted in the absence of active autoimmune disease.

• Active autoimmune disease or history of autoimmune disease that required systemic treatment within 2 years of the start of study treatment (i.e., with use of disease-modifying agents or immunosuppressive drugs).

• History or current evidence of any condition, co-morbidity, therapy, any active infections, or laboratory abnormality that might confound the results of the study, interfere with the patient's participation for the full duration of the study, or is not in the best interest of the patient to participate, in the opinion of the treating Investigator.

• Uncontrolled infection with HIV and/or active infection with opportunistic pathogens. Patients stable on antiretroviral therapy with undetectable viral load and normal CD4 counts for at least 6 months prior to study entry are eligible. Serological testing for HIV at screening is not required.

• Known to be positive for HBV surface antigen, or any other positive test for HBV indicating acute or chronic/latent infection. HBV testing is required for study entry.

• Known active HCV as determined by positive serology and confirmed by polymerase chain reaction (PCR). Patients on or who have received antiretroviral therapy are eligible provided they are virus-free by PCR for at least 6 months prior to study entry.

• History of untreated TB and/or positive quantiferon/Tspot test without previous tuberculosis prophylaxis, or untreated active infection with Mycobacterium tuberculosis. Testing must be negative for study entry.

• Active or known prior infection with nontuberculous mycobacteria.