Full Press Release Details
Adagene Reports Full Year 2024 Financial Results
and Provides Corporate Update
Muzastotug Phase 2 dose expansion in MSS CRC
with a 20 mg/kg loading dose regimen shows 33% overall response rate with four confirmed partial responses
SAFEbody technology utilized to create masked
T cell engagers for potentially superior safety profile with enhanced therapeutic index
Cash balance of $85.2 million provides runway
SAN DIEGO, Calif. and SUZHOU, China, March 24,
2025 - Adagene Inc. ("Adagene") (Nasdaq: ADAG), a platform-driven, clinical-stage biotechnology company transforming
the discovery and development of novel anti-body-based therapies, today reported financial results for the full year 2024 and provided
"The clinical data we generated in 2024
with ADG126 gives us great confidence in our ability to provide patients with colorectal cancer a tolerable, efficacious treatment option.
These data also provide the basis for us to expand our study in microsatellite stable colorectal cancer (MSS CRC) to include earlier lines
of therapy and patients with liver metastases, a patient subpopulation that has historically seen little to no benefit from checkpoint
inhibitors," said Peter Luo, Ph.D., Chairman, CEO and President of R&D at Adagene. "Regulatory T cells, a primary mechanism
of resistance, can be overcome through higher and more frequent dosing of a conditionally active anti-CTLA-4 antibody. We continue to
believe that ADG126 can transform immunotherapy in combination with anti-PD-1 and other therapies. Our SAFEbody masking capability enables
the best therapeutic index among all CTLA-4 programs, showing the potential to unlock therapeutic value with a target previously limited
by safety concerns."
Dr. Luo continued, "In addition to
ADG126, we have also utilized our SAFEbody masking technology to create T cell engagers (TCEs) that can link T cells to any number of
antigens presented on tumor cells. These masked TCEs can recruit the immune system for conditional cytotoxicity, shrinking tumors and
prolonging patient survival. The combination of TCEs with ADG126, which depletes CTLA-4 mediated regulatory T cells, is expected to enhance
the response to TCE therapy. We look forward to sharing more on our TCE programs going forward."
ADG126 - Phase 1b/2 data:
ADG138, a SAFEbody engineered T cell engager targeting
HER2, has shown a wide therapeutic window and extended half-life for prolonged circulation in the tumor micro-environment in preclinical
models. ADG138 is currently IND-ready.
ADG152, a SAFEbody engineered T cell engager targeting
CD20, is designed to conditionally bind to CD20 on tumor cells and show negligible interaction with healthy cells, yielding a 100-fold
reduction in cytokine release syndrome in preclinical models. ADG152 is currently in the IND-enabling phase.
The Company is pursuing strategic partnerships
to advance the SAFEbody T cell engager programs.
ONGOING COLLABORATIONS
Exelixis: In June 2023, Adagene received
a US$3.0 million milestone payment from Exelixis for the successful nomination of lead SAFEbody candidates for the second collaboration
program under a technology licensing agreement to develop novel masked antibody-drug conjugate candidates. Including upfront and other
milestone payments, we have received over US$18 million in total from Exelixis to date.
Sanofi: Adagene and Sanofi are collaborating to
develop both bispecific and monoclonal SAFEbody antibody candidates, preparing preclinical candidates using Adagene's SAFEbody precision
masking technology for future development and commercialization by Sanofi. The collaboration announced in March 2022 included an
upfront payment of US$17.5 million for the initial two programs, an option fee for two additional programs, potential milestone payments
of up to US$2.5 billion, and tiered royalties.
Roche: Roche is sponsoring and conducting a phase
1b/2 multi-national trial to evaluate ADG126 in a triple combination with atezolizumab and bevacizumab in first-line hepatocellular carcinoma
(HCC). To date, the combination has been well tolerated. Adagene retains global development and commercialization rights to ADG126.
2025 MILESTONES & CASH RUNWAY
Consistent with ongoing initiatives to prudently
manage its cash balance, Adagene expects its current cash balance to fund activities into late 2026, with the following milestones expected
JC Xu, M.D., Ph.D., Adagene's Chief
Strategy Officer and Head of Regulatory Affairs, has recently transitioned from a full-time employee of Adagene to a consulting role.
JC will continue to support the Company's development while serving as a consultant.
Ms. Yumeng Wang, a member of
Adagene's Board of Directors and a Vice President at General Atlantic, will step down from the Board upon filing of the
Company's 2024 Annual Report on form 20-F due to personal reason. Ms. Wang has served on Adagene's Board since 2023
and provided invaluable guidance as Adagene has developed ADG126 through first-in-human clinical trials.
Mervyn Turner, Ph.D., Independent Director
of Adagene's Board of Directors, will complete his term as Independent Director concurrent with the filing of the Company's
2024 Annual Report on form 20-F, and transition to an advisory role. Mr. Turner has served on Adagene's Board of Directors
since April of 2023 and will continue to provide strategic guidance to the Company in this advisory capacity.
FINANCIAL HIGHLIGHTS
Cash and Cash Equivalents:
Cash and cash equivalents were US$85.2 million
as of December 31, 2024, compared to US$109.9 million as of December 31, 2023. Total borrowings from commercial banks in China
(denominated in RMB) decreased to US$18.2 million as of December 31, 2024 from US$21.9 million as of December 31, 2023. The
associated loan proceeds were primarily used to support the company's R&D activities.
Net revenue was US$0.1 million for the year ended
December 31, 2024, compared to US$18.1 million in 2023.
Research and Development (R&D) Expenses:
R&D expenses were US$28.8 million for the
year ended December 31, 2024, compared to US$36.6 million in 2023. The decrease of approximately 21% in R&D expenses reflects
clinical focus on and prioritization of the company's masked, anti-CTLA-4 SAFEbody ADG126.
Administrative Expenses:
Administrative expenses were US$7.3 million for
the year ended December 31, 2024, compared to US$8.7 million in 2023. The decrease was due to both a reduction in personnel and in
office-related expenses as a result of cost-control measures.
Other Operating Income, Net:
Other operating income, net was nil for the year
ended December 31, 2024 compared to US$3.5 million in 2023. The amount of US$3.5 million included a one-time compensation payment
from a contract manufacturer for a preclinical-related outsourcing arrangement.
Net loss attributable to Adagene Inc.'s
shareholders was US$33.4 million for the year ended December 31, 2024, compared to US$18.9 million in 2023.
Ordinary Shares Outstanding:
As of December 31, 2024, there were 58,886,944
ordinary shares issued and outstanding. Each American depository share, or ADS, represents one and one quarter (1.25) ordinary shares
Non-GAAP net loss, which is defined as net loss
attributable to ordinary shareholders for the period after excluding share-based compensation expenses, was US$28.5 million for the year
ended December 31, 2024, compared to US$11.7 million in 2023. 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
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