Adagene Inc.

Adagene Inc. is a platform-driven, clinical-stage biotechnology company focused on the discovery and development of novel antibody-based cancer immunotherapies ⁸⁵. The company leverages computational biology to design and develop novel antibodies to address unmet patient needs, utilizing its proprietary Dynamic Precision Library (DPL) platform ⁸⁵. This DPL platform fuels three antibody technology platforms: NEObody, SAFEbody, and POWERbody technologies ⁸⁵. The company's core business model involves generating revenue from licensing and collaboration deals, as it has not yet generated revenue from product sales ²⁷. Primary customer segments for its collaborations include global biopharmaceutical companies and academic institutions ⁸⁷. The company's strategy involves both technology licensing agreements and outlicensing of product candidates, allowing it to retain significant future participation in product sales through royalties on net sales ⁸⁷.

The NEObody technology platform is a fully synthetic phage display and yeast display-based antibody discovery technology, designed to generate antibodies with dynamic binding sites that adapt kinetically to unique epitopes, triggering novel mechanisms of action (MOA) ⁸⁶. The SAFEbody technology platform is engineered to mask an antibody binding interface with a masking motif, preventing the antibody from binding to its target in healthy tissues, thereby minimizing on-target, off-tumor toxicities ⁸⁶. This masking motif is designed to activate, or unmask, the antibody in the tumor microenvironment (TME) where certain activation conditions, such as protease upregulation, allow the antibody to bind to its target for tumor killing ⁸⁶. The POWERbody technology platform enables the creation of new versions of antibodies, including bi/multi-specific T-cell engagers (TCEs), Fc-enhanced antibodies, or antibody-drug conjugates (ADCs), designed to enhance therapeutic potency beyond traditional monospecific antibodies ⁸⁶. POWERbody candidates incorporate SAFEbody precision masking technology to improve antitumor activity while maintaining an enhanced safety profile ⁸⁶.

Adagene's lead candidate is ADG126 (muzastotug), an anti-CTLA-4 SAFEbody, which is currently in phase 1b/2 and phase 2 clinical development, initially focusing on metastatic microsatellite-stable (MSS) colorectal cancer (CRC) ⁸⁵. ADG126 applies SAFEbody precision masking technology to its parental unmasked version, ADG116, to enhance safety and efficacy by masking the antibody binding site, which is then conditionally activated in the TME ⁹¹. The company also has earlier stage candidates, including ADG206, a masked, Fc-enhanced anti-CD137 agonistic POWERbody ⁸⁷. Additionally, there are two IND-ready preclinical programs: ADG138, a novel HER2xCD3 POWERbody bispecific TCE masked on both arms, and ADG153, a masked, IgG1 anti-CD47 SAFEbody ⁸⁷. Another preclinical program, ADG152, a CD20xCD3 POWERbody with masking on the CD3 arm, is in the IND-enabling phase ⁸⁷. The company also has two clinical-stage NEObody product candidates, ADG116 and ADG106, with ADG106 having been deprioritized ⁸⁷. Adagene has out-licensed the Greater China rights of ADG104, an anti-PD-L1 mAb in Phase 2, to Sanjin, and ADG125, an anti-CSF-1R mAb in Phase 2, to Dragon Boat Biopharmaceuticals ⁸⁷.

For the fiscal year ended December 31, 2025, Adagene Inc. incurred a net loss of US$17.6 million ²⁷. This compares to net losses of US$18.9 million ²⁷ in 2023 and US$33.4 million ²⁷ in 2024. The net cash used in operating activities was US$15.7 million ²⁸ for the year ended December 31, 2025, a decrease from US$29.7 million ²⁸ in 2024 and US$28.5 million ²⁸ in 2023. As of December 31, 2025, the company had US$74.5 million ²⁸ in cash and cash equivalents.

During 2025, Adagene had a productive Type B (end of phase 1) meeting with the FDA, gaining regulatory alignment on phase 2 and phase 3 trial design elements for ADG126, including dosing regimen, patient population, primary, and secondary endpoints ⁸⁵. The FDA subsequently designated ADG126, in combination with pembrolizumab, as a Fast Track product for adult patients with metastatic MSS CRC without current or active liver metastases ⁸⁵. In February 2025, an investigator-initiated phase 2 neoadjuvant trial of ADG126 for patients with stage II or stage III colorectal cancer was announced ⁸⁵. Sanofi is also sponsoring a phase 1b/2 dose escalation and expansion study of ADG126 in combination with SAR445877 (Sanofi’s PD-1 x IL-15 fusion protein) in adults with advanced solid tumors ⁸⁵. In terms of partnerships, Sanofi exercised its option for a third SAFEbody discovery program in 2025, and Adagene advanced a third masked ADC program with Exelixis ⁸⁷. The company also partnered with Third Arc Bio to develop two masked CD3 T cell engagers and collaborated with ConjugateBio on bispecific ADCs ⁸⁷.

In 2026, Adagene plans to complete enrollment of the ongoing randomized Phase 2 dose optimization study for ADG126 ¹⁰⁰. The company will also provide initial clinical data from a new cohort of patients in the ongoing Phase 1b/2 study of muzastotug + pembrolizumab in combination with standard of care (fruquintinib) in MSS CRC patients ¹⁰⁰. Furthermore, results from the clinical trial collaboration with Roche, evaluating muzastotug in triplet combination with atezolizumab and bevacizumab in first-line treatment of locally advanced or metastatic hepatocellular carcinoma (HCC), will be shared ¹⁰⁰. Preliminary clinical data, including pathological responses, from the investigator-initiated Phase 2 trial for neoadjuvant muzastotug + pembrolizumab in colorectal cancer will also be provided to inform future development ¹⁰⁰.

Adagene intends to continue to rely on additional financing to achieve its business objectives ²⁹. The company's future funding requirements and the period for which it expects increasing capital needs may differ from current plans ²⁸. Monthly spending levels are subject to variation based on new and ongoing research and development activities ²⁸. The company's ability to generate product revenue and achieve profitability depends on completing research and development, initiating and completing clinical trials, obtaining regulatory approvals, developing manufacturing capabilities, launching and commercializing products, establishing sales and marketing teams, identifying additional product candidates, addressing competitive developments, and protecting intellectual property rights [27-28].

The company expects to incur significant expenses and operating losses for the foreseeable future ²⁷. Its drug development costs will increase if regulatory authorities require additional studies or if there are delays in clinical trials or product development ²⁸. If the company is unable to raise capital when needed or on attractive terms, it could be forced to delay, reduce, or cease research and development programs or future commercialization efforts ²⁹. Raising additional capital through equity or convertible debt securities may dilute existing shareholders' beneficial ownership interest ²⁹. Incurring additional indebtedness or issuing certain equity securities could result in increased fixed payment obligations and restrictive covenants ²⁹. If additional funds are raised through partnerships, collaborations, strategic alliances, or licensing arrangements, the company may have to relinquish valuable rights to technologies, product candidates, or future revenue streams, or grant licenses on unfavorable terms ²⁹.

Adagene Inc. faces a multitude of material risks, including uncertainties within the PRC legal system, such as enforcement of laws and sudden changes in policies, which could adversely affect operations ⁹. The PRC government's significant oversight means it can influence business operations at any time, potentially leading to material adverse effects ⁹. There is a risk that the company's ADSs may be prohibited from trading in the United States under the HFCAA if the PCAOB is unable to inspect or investigate its auditor for two consecutive years, which could materially and adversely affect the value of investments ¹⁰. The Accelerating Holding Foreign Companies Accountable Act has reduced the non-inspection period from three years to two, accelerating this risk ¹¹. The company may also be restricted from transferring scientific data abroad due to PRC regulations, potentially hindering research and development ¹¹. Failure to comply with existing or future laws and regulations related to privacy or data security, including China's Cybersecurity Law, Data Security Law, and the Measures on Security Assessment of the Cross-border Data Transfer, could lead to government enforcement actions, fines, and adverse publicity [11-12]. The company has incurred net losses historically, with a net loss of US$17.6 million ²⁷ in 2025, and expects to continue incurring losses, necessitating substantial additional financing that may not be available on acceptable terms [27-28]. Clinical development of product candidates is inherently risky, with potential failures or setbacks in platforms, and the possibility that product candidates may not demonstrate adequate safety and efficacy in trials [31-32]. Delays in clinical trials, difficulties in patient enrollment, or changes in interim data could also adversely affect development [33-36]. Obtaining regulatory approval from the FDA, NMPA, and other authorities is lengthy and unpredictable, with no guarantee of success, and disruptions at government agencies could hinder approval processes [37-38]. Even if approved, products may cause undesirable adverse events, leading to restrictive labels or withdrawal from the market [39-40]. Intense competition and rapid technological changes in the biotechnology industry pose a threat, as competitors may develop more effective or less costly therapies ⁵⁰. The company's lack of in-house manufacturing, sales, marketing, or distribution capabilities means reliance on third parties, which may not be effective ⁵⁰. Coverage and reimbursement for product candidates may be limited or unavailable, and unfavorable pricing regulations could harm the business [50-51]. Geopolitical factors, such as the Russia-Ukraine conflict and U.S.-China tensions, could adversely affect the company's business and financial results, including its ability to raise capital and the market price of its ADSs ⁷³.

Management's message to shareholders emphasizes the company's platform-driven approach to transforming antibody-based cancer immunotherapies, leveraging computational biology and proprietary technologies such as DPL, NEObody, SAFEbody, and POWERbody ⁸⁵. A key strategic priority is the continued clinical development of its lead candidate, ADG126 (muzastotug), an anti-CTLA-4 SAFEbody, which is in phase 1b/2 and phase 2 clinical development, with a focus on metastatic MSS CRC ⁸⁵. Management highlights the regulatory alignment achieved with the FDA on phase 2 and phase 3 trial design elements for ADG126, including dosing regimen, patient population, and endpoints, and the Fast Track designation for ADG126 in combination with pembrolizumab for metastatic MSS CRC without current or active liver metastases ⁸⁵. Another strategic priority is expanding global partnerships and collaborations, as evidenced by Sanofi exercising its option for a third SAFEbody discovery program, advancing a third masked ADC program with Exelixis, partnering with Third Arc Bio for masked CD3 T cell engagers, and collaborating with ConjugateBio on bispecific ADCs in 2025 ⁸⁷. Management also communicates specific forward-looking plans for 2026, including completing enrollment of the ongoing randomized Phase 2 dose optimization study for ADG126, providing initial clinical data from a new cohort of patients in the ongoing Phase 1b/2 study of muzastotug + pembrolizumab in combination with fruquintinib in MSS CRC patients, sharing results of the clinical trial collaboration with Roche for muzastotug in triplet combination with atezolizumab and bevacizumab in first-line HCC, and providing preliminary clinical data from the investigator-initiated Phase 2 trial for neoadjuvant muzastotug + pembrolizumab in colorectal cancer ¹⁰⁰.