Adagene (ADAG) AI Stock Analysis

• Market Cap: $80.12M
• Dividend Yield: N/A
• Average Volume (3M): 94.20K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.51
• Revenue Growth: -87.59%
• EPS Growth: 11.53%
• Country: US
• Employees: 138
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -0.23
• Shares Outstanding: 47,109,554
• 10 Day Avg. Volume: 110,564
• 30 Day Avg. Volume: 94,199
• PEG Ratio: -0.03
• Price to Book (P/B): 1.42
• Price to Sales (P/S): 694.63
• P/FCF Ratio: -2.41
• Enterprise Value/Market Cap: 0.45
• Enterprise Value/Revenue: 347.78
• Enterprise Value/Gross Profit: -31.95
• Enterprise Value/Ebitda: -1.01
• 1Y Price Target: $8.25
• Price Target Upside: 289.15% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 52 Neutral
• Price Target: $2.00 ▼(-5.66% Downside)

Adagene's overall stock score is primarily impacted by its poor financial performance, characterized by declining revenues and substantial losses. Technical analysis provides some positive momentum, but the valuation remains weak due to negative earnings. The absence of earnings call data and corporate events means these factors do not influence the score.

Positive Factors

Strategic Partnerships

The partnership with Sanofi provides significant financial resources and extends Adagene's cash runway into 2027, enhancing its ability to fund R&D and clinical trials.

Clinical Program Advancements

Successful trial results improve the potential for regulatory approval and commercialization, strengthening Adagene's product pipeline and market position.

Regulatory Alignment

Alignment with the FDA on trial designs reduces regulatory risks and accelerates the path to market, enhancing the company's competitive advantage.

Negative Factors

Declining Revenue

A significant decline in revenue indicates challenges in product commercialization and market penetration, affecting long-term financial stability.

Negative Cash Flow

Persistent negative cash flow limits the company's ability to invest in growth opportunities and may necessitate additional financing, impacting financial health.

Substantial Losses

Substantial losses reflect operational inefficiencies and challenge profitability, hindering the company's ability to sustain long-term growth without restructuring.

Adagene Business Overview & Revenue Model

Company Description

Adagene Inc., a clinical stage biopharmaceutical company, engages in the research, development, and production of monoclonal antibody drugs for cancers. The company's product candidates include ADG106, a human ligand-blocking agonistic anti-CD137 monoclonal antibodies (mAbs) that is in Phase 1b/2 clinical trials for the treatment advanced solid tumors and non-Hodgkin's lymphoma; ADG126, a fully-human anti-CTLA-4 mAb that is in Phase 1 clinical trial for the treatment advanced/metastatic solid tumors; and ADG116, a human ligand-blocking anti-CTLA-4 mAb, which is in Phase I clinical trial for the treatment of advanced metastatic solid tumors. It also offers ADG104, an anti-PD-L1 mAb that is in Phase 2 clinical development; ADG125, a novel anti-CSF-1R mAb, which is in Phase I clinical trial; ADG206, a masked, Fc engineered anti-CD137 agonistic POWERbody, which is in preclinical; ADG153, a masked anti-CD47 IgG1 SAFEbody, which is in preclinical stage for the treatment hematologic and solid tumors; ADG138, novel HER2xCD3 POWERbody, which is in preclinical for the treatment HER2-expressing solid tumors; and ADG152, a CD20xCD3 POWERbody, which is in preclinical stage for the treatment off-tumor toxicities. The company was incorporated in 2011 and is headquartered in Suzhou, China.

How the Company Makes Money

Adagene generates revenue primarily through the development and commercialization of its antibody therapies. The company's revenue model includes funding from partnerships and collaborations with larger pharmaceutical companies, which often involve upfront payments, milestone payments as products progress through clinical trials, and royalties on future sales. Additionally, Adagene may receive public and private grants to support its research and development efforts. Key partnerships with established players in the biopharmaceutical industry are significant contributors to its revenue, as they provide both financial resources and access to broader distribution channels.

Adagene Financial Statement Overview

Summary

Adagene faces significant financial challenges with declining revenues, substantial losses, and negative cash flows. The debt level is manageable, but equity reduction poses a risk. Profitability and cash generation need improvement.

Income Statement

Adagene's income statement reveals significant challenges. The company has experienced a declining revenue trend from 2023 to 2024 with a revenue decrease of 99.4%. The gross profit margin stands at 100%, indicating that all revenue was retained as gross profit. However, the net profit margin is deeply negative at -32383%, reflecting substantial losses relative to revenue. Both EBIT and EBITDA margins are also negative, highlighting profitability issues.

Balance Sheet

Adagene's balance sheet shows a moderate financial position with some concerns. The debt-to-equity ratio is 0.37, indicating a manageable level of debt. However, stockholders' equity has decreased, reflecting potential risk. The equity ratio stands at 56.6%, suggesting reasonable asset financing through equity, yet the negative trends in equity raise concerns.

Cash Flow

The cash flow statement indicates significant challenges. Operating cash flow is negative and worsening, with a free cash flow growth rate of -4.2% from 2023 to 2024. Operating cash flow to net income and free cash flow to net income ratios are unfavorable, reflecting difficulty in generating cash relative to net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	103.20K	103.20K	18.11M	9.29M	10.18M	480.00K
Gross Profit	-1.12M	-823.04K	18.11M	9.29M	10.18M	480.00K
EBITDA	-35.59M	-31.66M	-14.95M	-77.39M	-69.99M	-41.34M
Net Income	-38.43M	-33.42M	-18.95M	-79.97M	-73.18M	-16.44M
Balance Sheet
Total Assets	66.52M	89.27M	115.73M	152.40M	189.51M	84.26M
Cash, Cash Equivalents and Short-Term Investments	62.83M	85.19M	109.93M	143.76M	174.39M	75.15M
Total Debt	6.85M	18.49M	22.31M	27.97M	7.49M	7.98M
Total Liabilities	28.61M	38.74M	45.17M	69.31M	32.95M	173.65M
Stockholders Equity	37.91M	50.52M	70.56M	83.09M	156.56M	-89.39M
Cash Flow
Free Cash Flow	-34.20M	-29.73M	-28.54M	-49.30M	-45.92M	-29.46M
Operating Cash Flow	-34.17M	-29.70M	-28.45M	-48.61M	-43.41M	-28.53M
Investing Cash Flow	905.09K	1.11M	-77.36K	-686.05K	-2.51M	7.07M
Financing Cash Flow	-6.43M	3.77M	-5.37M	17.82M	145.36M	4.44M

Adagene Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.12
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADAG, the sentiment is Positive. The current price of 2.12 is above the 20-day moving average (MA) of 1.78, above the 50-day MA of 1.86, and above the 200-day MA of 1.87, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 62.58 is Neutral, neither overbought nor oversold. The STOCH value of 82.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ADAG.

Adagene Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ADAG	52 Neutral	$80.12M	-2.64	-63.41%	―	-87.59%	11.53%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
CLNN	50 Neutral	$104.89M	―	―	―	-49.17%	23.37%
IFRX	46 Neutral	$79.89M	―	―	―	―	―
IMA	41 Neutral	$92.14M	-1.08	-33.05%	―	-100.00%	45.48%
ANEB	35 Underperform	$96.14M	―	-145.11%	―	―	23.10%
QNCX	31 Underperform	$192.10M	―	-247.78%	―	―	2.26%

Adagene Corporate Events

Adagene and Third Arc Bio Forge Licensing Agreement for Cancer Therapy Development

On November 13, 2025, Adagene Inc. announced a licensing agreement with Third Arc Bio, allowing the latter to use Adagene’s SAFEbody technology to develop two masked CD3 T cell engagers. This agreement grants Third Arc Bio worldwide rights to research, develop, and commercialize these molecules, while Adagene receives an upfront payment of $5 million and potential milestone payments up to $840 million. The collaboration is expected to enhance Adagene’s industry positioning by expanding the application of its SAFEbody technology, potentially leading to innovative cancer therapies with improved safety profiles.