Full Press Release Details
Adagene Reports Full Year 2022 Financial Results
and Provides Corporate Update
- Clinical data for wholly-owned
anti-CTLA-4 franchise show best-in-class safety profiles for unmasked and masked candidates, unlocking the full therapeutic benefit of
anti-CTLA-4 in combination with anti-PD-1 and beyond -
Roche sponsoring randomized, multi-national phase 1b/2 trial of novel triple combination therapy in first-line liver cancer, leveraging
safety profile of masked, anti-CTLA-4 SAFEbody ADG126 -
- Sanofi and Exelixis collaborations present
multi-billion dollar opportunity for non-dilutive funding via milestones and royalties -
- Cash balance of US$143.8 million supports
streamlined operations into 2025 -
DIEGO, Calif. and SUZHOU, China, March 28, 2023 - 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 full year 2022 and provided corporate updates.
"We are investing in R&D activities to strengthen the differentiation
and impact of our anti-CTLA-4 franchise, while generating non-dilutive funding through collaborations," said Peter Luo, Ph.D.,
Co-Founder, Chief Executive Officer and Chairman of the Board of Adagene. "Through CTLA-4 mediated intra-tumoral Treg depletion,
we are addressing the dose-dependent toxicities of anti-CTLA-4 therapies, thereby unleashing their power as a cornerstone of cancer immunotherapy
across a broad spectrum of tumors. We expect continued momentum with both existing and prospective partners to validate our SAFEbody
technology and pipeline programs."
Anti-CTLA-4 Programs
Additional Clinical & Preclinical Programs
UPDATED MILESTONES & OUTLOOK
initiatives to streamline its operations over the past year, Adagene expects its cash balance to sufficiently fund activities
into 2025, with the following milestones during 2023:
Financial Highlights
Cash and Cash Equivalents:
and cash equivalents were US$143.8 million as of December 31, 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 for
the first two projects from Sanofi, and a milestone payment of US$3.0 million and an additional upfront payment of US$1.1 million from
non-dilutive funding received from business development collaborations increased to US$21.9 million for the year ended December 31,
2022 from US$11.9 million for the year ended December 31, 2021. Total borrowings (denominated in RMB) from commercial banks in China
increased to US$27.8 million as of December 31, 2022 from US$7.5 million as of December 31, 2021.
The associated loan proceeds were primarily used to pay for the company's R&D activities in China, including CMC costs of clinical
and preclinical programs.
Net revenue was US$9.3 million for the year ended
December 31, 2022, compared to US$10.2 million in 2021. Net revenue was recognized due to fulfillment of performance obligations
over time associated with the collaboration and technology licensing agreement with Sanofi to develop antibody-based therapies. Revenue
was also recognized from the material transfer and option agreement with ADC Therapeutics SA as performance obligation was satisfied
Research and Development (R&D) Expenses:
R&D expenses were US$81.3 million for the year
ended December 31, 2022, compared to US$68.1 million in 2021. The rise in R&D expenses was primarily due to increased R&D
activities for the company's clinical programs and preclinical testing for candidates in the IND-enabling phase.
Administrative Expenses:
Administrative expenses were US$11.9 million for
the year ended December 31, 2022, compared to US$14.4 million in 2021. The decrease was primarily due to a reduction in share-based
compensation expenses.
The net loss attributable to Adagene Inc.'s
shareholders was US$80.0 million for the year ended December 31, 2022, compared to US$73.2 million for the year ended December 31,
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 applicable, was US$69.5 million for the year ended December 31,
2022, compared to US$54.5 million for the year ended December 31, 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 from the grant of stock-based awards to employees. The Company believes that the exclusion of share-based compensation expenses
from the net loss in the Reconciliation of GAAP and Non-GAAP Results assists management and investors in making meaningful period-to-period
comparisons in the Company's operating performance or peer group comparisons because (i) the amount of share-based compensation
expenses in any specific period may not directly correlate to the Company's underlying performance, (ii) such expenses can
vary significantly between periods as a result of the timing of grants of new stock-based awards, and (iii) other companies may
use different forms of employee compensation or different valuation methodologies for their share-based compensation.
Please see the "Reconciliation of GAAP and Non-GAAP Results"
included in this press release for a full reconciliation of non-GAAP net loss and non-GAAP net loss per ordinary shares for the year
to net loss attributable to ordinary shareholders for the year/period.
Adagene Inc. (Nasdaq: ADAG) is a platform-driven,
clinical-stage biotechnology company committed to transforming the discovery and development of novel antibody-based cancer immunotherapies. Adagene combines
computational biology and artificial intelligence to design novel antibodies that address unmet patient needs. Powered by its proprietary Dynamic
Precision Library (DPL) platform, composed of NEObody , SAFEbody , and POWERbody technologies, Adagene's
highly differentiated pipeline features novel immunotherapy programs. Adagene has forged strategic collaborations with reputable
global partners that leverage its technology in multiple approaches at the vanguard of science.
For more information,
please visit: https://investor.adagene.com. Follow Adagene on WeChat, LinkedIn and Twitter.
SAFEbody is a registered
trademark in the United States, China, Australia, Japan, Singapore, and the European Union.
Safe Harbor Statement
This press release contains forward-looking statements,
including statements regarding the potential implications of clinical data for patients, and Adagene's advancement of, and anticipated
preclinical activities, clinical development, regulatory milestones, and commercialization of its product candidates. Actual results
may differ materially from those indicated in the forward-looking statements as a result of various important factors, including but
not limited to Adagene's ability to demonstrate the safety and efficacy of its drug candidates; the clinical results for its drug
candidates, which may not support further development or regulatory approval; the content and timing of decisions made by the relevant
regulatory authorities regarding regulatory approval of Adagene's drug candidates; Adagene's ability to achieve commercial
success for its drug candidates, if approved; Adagene's ability to obtain and maintain protection of intellectual property for