Adlai Nortye Ltd.

Adlai Nortye Ltd. is a Cayman Islands holding company with daily operations primarily conducted through its operating subsidiaries in the United States and mainland China. The company, which rebranded in 2016 from its original incorporation in 2004, has strategically transitioned to an R&D-driven pharmaceutical company focused on the discovery and development of innovative cancer therapies. The company's business model is centered on the successful development, regulatory approval, and commercialization of its drug candidates, which are currently in preclinical and clinical development stages. Revenue generation from product sales is anticipated only after regulatory approvals and significant marketing efforts. The company also engages in strategic alliances, collaboration, and licensing arrangements with third parties to complement its development and commercialization efforts, which include both in-licensing and out-licensing of drug candidates.

The company's pipeline is focused on two key areas: RAS-targeting therapies and next-generation cancer immunotherapies. In RAS-targeting therapies, Adlai Nortye is developing AN9025, an oral pan-RAS(ON) inhibitor, which is currently in clinical Phase I study. Preclinical studies for AN9025 have shown potent and durable efficacy in RAS-mutant cancers, comparable or superior to benchmark agents. The second RAS-targeting therapy is AN4035, a proprietary CEACAM5-targeting antibody drug conjugate (ADC) armed with a pan-RAS(ON) inhibitor payload, for which an IND submission is expected in mid-2026. AN4035 has demonstrated potent cytotoxicity and a robust bystander effect in preclinical models.

In next-generation cancer immunotherapies, the company is developing AN8025, a tri-specific antibody fusion protein designed to modulate T cell and antigen-presenting cell (APC) functions. AN8025 is currently in clinical Phase I study, with preclinical data indicating enhanced APC quantity and quality, and robust PD-L1-dependent T cell activation. Another immunotherapy candidate is AN4005, an orally available, small-molecule PD-L1 inhibitor, which is in its Expansion Phase after demonstrating favorable safety and tolerability in a Phase I dose-escalation study. Preliminary efficacy, including one confirmed complete response in MSI-H colorectal cancer, was observed, and proof-of-concept data from the Expansion Phase is expected in the second half of 2026.

The company's in-licensed product, AN0025, an EP4 antagonist, is designed to modulate the tumor microenvironment and is being developed as a chemoradiation modulator. The ARTEMIS randomized Phase II study for AN0025 in combination with radiotherapy/chemoradiotherapy for rectal cancer is ongoing, having passed futility analysis in March 2026, with topline results expected in the first half of 2027. Preliminary efficacy results from a Phase Ib study showed a 20% clinical complete response (cCR) and 16% pathologic complete response (pCR).

For the fiscal year ended December 31, 2025, Adlai Nortye Ltd. reported a net loss of US$35.5 million ¹. This follows net losses of US$109.2 million ² (revised) and US$51.9 million ³ for the years ended December 31, 2023 and 2024, respectively. The company's research and development expenses were US$32.8 million ⁴ for the year ended December 31, 2025, a decrease from US$44.9 million ⁵ in 2024 and US$58.2 million ⁶ in 2023. Net cash outflow from operating activities for the year ended December 31, 2025, was US$33.5 million ⁷, compared to US$51.8 million ⁸ in 2024 and US$56.7 million ⁹ in 2023. The company had net current liabilities of US$14.7 million ¹⁰ as of December 31, 2025, a shift from net current assets of US$18.7 million ¹¹ as of December 31, 2024. Total net liabilities were US$8.3 million ¹² as of December 31, 2025, compared to net assets of US$25.5 million ¹³ in 2024 and US$75.0 million ¹⁴ (revised) in 2023. Financial assets at FVTPL were nil ¹⁵ as of December 31, 2025, down from US$7.0 thousand ¹⁶ in both 2023 and 2024. Share-based payment expenses were US$1.5 million ¹⁷ in 2025, decreasing from US$2.5 million ¹⁸ in 2024 and US$4.3 million ¹⁹ in 2023.

Significant operational developments during the period include the passing of the futility analysis for the ARTEMIS Phase II study of AN0025 in March 2026, with topline results anticipated in the first half of 2027. The AN4005 Phase I trial has advanced to the Expansion Phase, with proof-of-concept data expected in the second half of 2026. The company also entered into a collaboration agreement with ASK Pharm on December 29, 2025, granting ASK Pharm exclusive rights to develop, manufacture, and commercialize AN9025 in mainland China, Hong Kong, and Macao. Adlai Nortye is eligible to receive total consideration of up to RMB 1.6 billion ²⁰ (approximately USD 230 million ²¹), including an upfront payment and near-term milestone payments exceeding USD 20 million ²², plus tiered royalties.

Based on the current operating plan, management believes that current cash and cash equivalents, along with cash expected from potential future NDA and financing activities, will be sufficient to meet working capital requirements and capital expenditures for at least the next 12 months. However, the company anticipates continued net cash outflows from operating activities for the foreseeable future and will require additional cash resources to fund ongoing operations.

A major growth area for Adlai Nortye is the advancement of its RAS-targeting therapies. AN9025, an oral pan-RAS(ON) inhibitor, is currently in clinical Phase I study, with preclinical data demonstrating potent and broad-spectrum anti-tumor activity. The company expects to submit an IND for AN4035, a CEACAM5-targeting ADC delivering a pan-RAS(ON) inhibitor, in mid-2026. These candidates are designed to address RAS-driven cancers, including pancreatic, lung, and colorectal adenocarcinomas, representing a significant market opportunity if successfully developed and commercialized.

Another key growth vector is the development of next-generation cancer immunotherapies. AN8025, a tri-specific antibody fusion protein, is in clinical Phase I study, aiming to enhance immune function through T cell and APC modulation. AN4005, an oral small-molecule PD-L1 inhibitor, has advanced to its Expansion Phase, with proof-of-concept data expected in the second half of 2026. The observed complete response in a patient with MSI-H colorectal cancer highlights the potential of AN4005, particularly as an oral alternative to intravenous anti-PD-(L)1 mAbs.

Operationally, the company expects expenses to increase as it advances the clinical development of its drug candidates, initiates additional clinical trials, and seeks regulatory approvals. Significant commercialization expenses are also anticipated if regulatory approvals are obtained, covering product manufacturing, marketing, sales, distribution, and post-approval commitments. The company primarily relies on third-party contract manufacturing organizations (CMOs) and partners for manufacturing, which may entail substantial costs. The company also plans to create additional infrastructure to support its operations as a public company.

Planned capital allocation will involve substantial additional funding through public or private equity offerings, debt financing, collaborations, or licensing arrangements. The company incurred research and development expenses of US$32.8 million ⁴ in 2025, and these are expected to increase with further exploration of new drug candidates and indication expansion. The company also expects to continue granting share-based compensation to employees, which may cause shareholding dilution and increase operating expenses.

Management has explicitly flagged several structural headwinds and execution risks. The company has a limited operating history and has incurred net losses, expecting to continue doing so for the foreseeable future. There is a risk that additional financing may not be available on acceptable terms, or at all, which could force delays, reductions, or terminations of R&D programs or commercialization efforts. The company also had a working capital deficiency as of December 31, 2025, and cannot assure against future deficiencies or accumulated deficits. The success of drug candidates is highly dependent on successful development, regulatory approvals, and commercialization, which are uncertain and time-consuming processes. The company relies on third parties for manufacturing and clinical development, exposing it to risks related to their performance, compliance, and supply chain issues.

Geographic, regulatory, and macro factors identified as constraints include the complexities of operating in international markets, particularly China, where evolving laws and regulations, such as those from the CSRC and CAC, may impose additional compliance requirements and risks to offshore offerings and data security. The company is also subject to the Holding Foreign Companies Accountable Act (HFCAA), which could lead to delisting of its ADSs if its auditor is not subject to PCAOB inspection for two consecutive years. Changes in U.S. and international policies, including trade restrictions and healthcare reform measures like the Inflation Reduction Act of 2022 (IRA) and the Consolidated Appropriations Act 2026 (CCA), may affect drug pricing, reimbursement, and market access. The company also benefits from certain financial incentives from local governments in China, which are discretionary and subject to change or expiration, potentially impacting results of operations.

Adlai Nortye faces material risks across macroeconomic, competitive, regulatory, geopolitical, and operational dimensions. Macroeconomic risks include disruptions in financial markets and economic conditions, which could impede the company's ability to raise capital, and the long-term effects of expansionary monetary and fiscal policies, as well as global unrest and terrorist threats. Competitively, the biotechnology and pharmaceutical industries are characterized by intense competition and rapid technological change, with many competitors possessing substantially greater financial and technical resources. The company may fail to establish effective sales networks or secure favorable third-party collaborations, and its drug candidates may not achieve sufficient market acceptance or favorable reimbursement. Regulatory risks are significant, including the uncertain and time-consuming approval processes of the FDA, NMPA, and EMA, potential adverse events or side effects from drug candidates leading to delays or denials of approval, and stringent privacy laws and information security policies. The company is also exposed to the risk of product liability claims and the possibility that interim clinical trial data may change. Geopolitical risks are heightened by the company's substantial operations in mainland China, subjecting it to evolving PRC laws and regulations, including potential intervention or influence from the PRC government, uncertainties in the interpretation and enforcement of laws, and increased oversight over data security by the CAC. The Holding Foreign Companies Accountable Act (HFCAA) poses a delisting risk for the company's ADSs if its auditor is not subject to PCAOB inspection for two consecutive years. Furthermore, changes in U.S. and international policies, particularly regarding China, and trade restrictions, economic sanctions, and export controls, could adversely impact the business. Operational risks include a limited operating history with recurring net losses, a working capital deficiency of US$14.7 million ¹⁰ as of December 31, 2025, and the need for additional financing which may dilute shareholder interests or require relinquishing rights to technologies. The company's reliance on third parties for manufacturing and clinical development exposes it to risks of non-compliance, quality control issues, and supply shortages. Intellectual property protection is critical but uncertain, with risks of patent expiration, challenges to validity, and difficulties in protecting trade secrets. The company also faces risks related to retaining key personnel, complying with environmental, health, and safety laws, and potential misconduct by employees or partners.

Management's message to shareholders emphasizes the company's strategic transition to an R&D-driven pharmaceutical company focused on innovative cancer therapies, leveraging its dual R&D presence in the U.S. and China. They highlight the assembly of an experienced management team and strong support from shareholders aligned with their vision. The company acknowledges its limited operating history and ongoing net losses, stating an expectation to continue incurring significant expenses for the foreseeable future as it advances clinical development, seeks regulatory approvals, and prepares for commercialization. Management believes that current cash and cash equivalents, combined with expected cash from potential future NDA and financing activities, will be sufficient to meet working capital and capital expenditure requirements for at least the next 12 months. Key strategic priorities include the continued clinical development of its RAS-targeting therapies (AN9025 and AN4035) and next-generation cancer immunotherapies (AN8025 and AN4005), as well as advancing AN0025 as a chemoradiation modulator. They anticipate proof-of-concept data from the AN4005 Expansion Phase in the second half of 2026 and topline results from the ARTEMIS Phase II study for AN0025 in the first half of 2027. Management also emphasizes the importance of strategic collaborations, citing the recent agreement with ASK Pharm for AN9025, which could yield up to RMB 1.6 billion ²⁰ (approximately USD 230 million ²¹) in total consideration, including upfront and near-term milestone payments exceeding USD 20 million ²², plus tiered royalties.