Full Press Release Details
Adagene Reports Financial Results for the Six
Months Ended June 30, 2022
and Provides Corporate Updates
- Topline data for anti-CTLA-4 antibody, ADG116, shows compelling clinical
safety and complete and partial responses as both a single agent and in combination with anti-PD-1 therapy; results to be presented at
- Masked, anti-CTLA-4 antibody, ADG126, safely dosed repeatedly up to 20 mg/kg as a single agent with encouraging efficacy signals; results to be presented at ESMO 2022 -
of combination dosing data with anti-PD-1 therapies in 2022, while dose expansion begins for both ADG116 and ADG126 in targeted
- Submitted regulatory filing for clinical trial of masked, IgG1-based anti-CD137 candidate, ADG206, with greater preclinical potency than the analog of a benchmark antibody, urelumab, that demonstrated monotherapy efficacy in clinic; patient dosing planned in early 2023 -
- Cash balance of US$168 million supports streamlined operations into
late 2024, with planned key readouts in 2023 for anti-CTLA-4 and anti-PD-1 combination therapies expected to pave way for pivotal trials -
- Technology licensing collaborations provide near-term revenue opportunity -
SAN DIEGO, Calif. and SUZHOU, China, August 30,
2022 - Adagene Inc. ("Adagene") (Nasdaq: ADAG), a platform-driven, clinical-stage biotechnology company transforming
the discovery and development of novel antibody-based therapies, today reported financial results for the six months ended June 30, 2022
and provided corporate updates.
"We are prioritizing development of
two anti-CTLA-4 antibodies, which have best-in-class profiles and are on track to deliver proof-of-concept clinical results in
combination therapy in 2023. Anti-CTLA-4 therapy is known for dose dependent toxicity, making it extremely difficult to optimize
dosing levels, dosing frequency and dosing intervals for prevailing anti-CTLA-4 therapy, especially in combination therapy with
anti-PD-1. We have solved this problem with differentiated candidates suitable for the massive market opportunity for next
generation anti-CTLA-4 therapies, increasing market penetration into known and new indications with enhanced safety and efficacy,
especially for tumor types not addressed with the currently available therapy, and rapid entry into new markets such as China with
few approved indications for anti-CTLA-4 in combination with widely accessible anti-PD-1 therapy," said Peter Luo,
Ph.D., Co-founder, Chief Executive Officer and Chairman of Adagene. "We are also excited to advance our next generation
anti-CD137 agonistic antibody, ADG206, into clinic given its first- and best-in-class potential in both monotherapy and in
combination with multiple agents.
Dr. Luo continued: "On the longer-term horizon,
we have developed a portfolio of masked, bispecific T cell engagers (TCEs) for tumor directed T cell therapies, armed with proprietary,
tailor-made anti-CD3 and CD28 by leveraging our NEObody and SAFEbody technologies, that aim
to push the boundaries of what is possible with TCEs - to achieve safe, potent and durable responses for patients by
combining our novel modalities with the fundamental pathways across the cancer immunity cycle."
He concluded: "Building on success of existing
technology licensing deals, we are also pursuing additional collaboration agreements that leverage our pipeline, our integrated AI-powered
antibody discovery platform, and our SAFEbody precision masking technology, to bring potential non-dilutive funding to Adagene. We believe
that the combination of our proprietary technology platforms and our highly differentiated clinical and preclinical pipelines presents
us with many value-creating levers to navigate today's turbulent financial markets."
& BUSINESS Highlights
ADG116 (anti-CTLA-4 NEObody targeting
ADG126 (anti-CTLA-4 SAFEbody targeting
a unique epitope with precision masking)
ADG106 (agonistic anti-CD137 NEObody )
Given prioritization of anti-CTLA-4 programs, combination trial with toripalimab in China is winding down:
Focusing clinical development on investigator-initiated trials (IITs) in selected indications:
ADG206 (masked, IgG1 FC engineered
anti-CD137 POWERbody )
Preclinical Discovery Programs
UPDATED MILESTONES & OUTLOOK
its business outlook to reflect prioritization of its anti-CTLA-4 clinical development programs and achievement of meaningful milestones
with its current cash resources. Based on current plans, Adagene expects its cash balance to sufficiently fund operations into late 2024,
with the following upcoming milestones:
| Present ADG126 monotherapy dose escalation data at ESMO 2022 | ||
| Present additional ADG116 data at SITC 2022 | ||
| ADG116 results of dose escalation in combination with anti-PD-1 therapy to establish the dose(s) and schedule(s) for dose expansion; advance phase 2a dose expansion cohorts in targeted tumors | ||
| ADG126 results of dose escalation in combination with anti-PD-1 therapy to establish the dose(s) and schedule(s) for dose expansion; advance phase 2a dose expansion cohorts in targeted tumors |
| ADG116 phase 2a proof-of-concept data from combination dose expansion cohorts | ||
| ADG126 phase 2a proof-of-concept data from combination dose expansion cohorts | ||
| Establish registration path and strategy (e.g., recommended phase 2 dose, indication and design) for phase 2/3 pivotal trial of anti-CTLA-4 in combination with anti-PD-1 therapy in targeted tumors | ||
| Initiate patient dosing in ADG206 phase 1 trial | ||
| Submit IND or equivalent for ADG153, and initiate phase 1 trial | ||
| Results from IIT combination studies of ADG106 | ||
| Additional collaborations and/or technology licensing agreements |
Financial Highlights
Cash and Cash Equivalents:
Cash and cash equivalents were US$168.0 million
as of June 30, 2022, compared to US$174.4 million as of December 31, 2021. The 2022 cash balance includes an upfront payment of US$17.5
million from Sanofi, and a milestone payment of US$3.0 million and upfront payment of US$1.1 million from Exelixis, related to Adagene's
respective collaboration and technology licensing agreements with those companies.
Net revenue was US$3.9 million for the six months
ended June 30, 2022, compared to US$1.4 million for the same period in 2021. The increase was related to revenue recognized due to fulfillment
of performance obligations over time associated with the collaboration and technology licensing agreement with Sanofi to develop antibody-based
therapies. Due to the Sanofi and Exelixis collaborations, contract liabilities also increased to US$20.2 million as of June 30, 2022,
compared to US$5.5 million as of December 31, 2021.
Research and Development (R&D) Expenses:
R&D expenses were US$45.1 million for the
six months ended June 30, 2022, compared to US$31.5 million for the same period in 2021. The rise in R&D expenses was primarily due
to increased R&D activities for the company's clinical programs, as well as preclinical testing for candidates in the IND-enabling
Administrative Expenses:
Administrative expenses were US$6.8 million for
the six months ended June 30, 2022, compared to US$7.4 million for the same period in 2021. The decrease was primarily due to reduction
in share-based compensation expenses.
The net loss attributable to Adagene Inc.'s
shareholders was US$47.6 million for the six months ended June 30, 2022, compared to US$37.2 million for the six months ended June 30,
Ordinary Shares Outstanding:
As of June 30, 2022, there were 54,278,981 ordinary
shares issued and outstanding. Please note that each American depository share, or ADS, represents one and one quarter (1.25) ordinary
shares of the company.
Non-GAAP net loss, which is defined as net loss
attributable to ordinary shareholders for the period after excluding (i) share-based compensation expenses and (ii) accretion of convertible
redeemable preferred shares to redemption value, as appliable, was US$41.9 million for the six months ended June 30, 2022, compared to
US$27.0 million for the six months ended June 30, 2021. Please refer to the section in this press release titled "Reconciliation
of GAAP and Non-GAAP Results" for details.
Non-GAAP Financial Measures
The Company uses non-GAAP net loss and non-GAAP net loss per ordinary
shares for the year, which are non-GAAP financial measures, in evaluating its operating results and for financial and operational decision-making
purposes. The Company believes that non-GAAP net loss and non-GAAP net loss per ordinary shares for the year help identify underlying
trends in the Company's business that could otherwise be distorted by the effect of certain expenses that the Company includes
in its loss for the year. The Company believes that non-GAAP net loss and non-GAAP net loss per ordinary shares for the year provide
useful information about its results of operations, enhances the overall understanding of its past performance and future prospects and
allows for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.
Non-GAAP net loss and non-GAAP net loss per ordinary shares for the
year should not be considered in isolation or construed as an alternative to operating profit, loss for the year or any other measure
of performance or as an indicator of its operating performance. Investors are encouraged to review non-GAAP net loss and non-GAAP net
loss per ordinary shares for the year and the reconciliation to their most directly comparable GAAP measures. Non-GAAP net loss and non-GAAP
net loss per ordinary shares for the year here may not be comparable to similarly titled measures presented by other companies. Other
companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company's
data. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial
Non-GAAP net loss and non-GAAP net loss per ordinary shares for the
year represent net loss attributable to ordinary shareholders for the year excluding (i) share-based compensation expenses, and (ii)
accretion of convertible redeemable preferred shares to redemption value. Share-based compensation expense is a non-cash expense arising