Adagene (ADAG) AI Stock Analysis

• Market Cap: $89.98M
• Dividend Yield: N/A
• Average Volume (3M): 99.56K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.71
• Revenue Growth: -87.65%
• EPS Growth: 11.76%
• Country: US
• Employees: 138
• Sector: Healthcare
• Sector Strength: 41
• Industry: Biotechnology
• EPS (TTM): -0.29
• Shares Outstanding: 47,109,554
• 10 Day Avg. Volume: 55,441
• 30 Day Avg. Volume: 99,562
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.28
• Enterprise Value/Revenue: 239.86
• Enterprise Value/Gross Profit: -30.08
• Enterprise Value/Ebitda: -0.61
• 1Y Price Target: $4.50
• Price Target Upside: 135.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 44 Neutral
• Price Target: $2.00 ▲(4.71% Upside)

Adagene's overall stock score is primarily impacted by its poor financial performance, characterized by declining revenues and substantial losses. Technical analysis provides some neutral signals, but the negative valuation metrics further weigh down the score. The absence of earnings call insights and corporate events leaves these areas unaddressed.

Positive Factors

Clinical Development

The company's lead program, muzastotug, has demonstrated proof-of-concept efficacy in challenging cancer settings, positioning it for commercial success.

Financial Stability

With approximately $85M in cash and cash equivalents, Adagene is well positioned to support its operations into the second half of 2026.

Regulatory Outlook

Management's intention to meet with the FDA to discuss a regulatory pathway for ADG126 could lead to a favorable update, boosting stock potential.

Negative Factors

Earnings Performance

The company reported a net loss of $0.29 per share, which, although better than estimates, still reflects a financial loss.

Revenue Generation

For the second half of 2024, Adagene reported minimal collaboration revenue of $0.1M, indicating limited revenue streams.

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 makes money primarily through the development and commercialization of its antibody-based therapeutics. The company generates revenue from licensing agreements, where it partners with pharmaceutical companies to co-develop and commercialize its products. These partnerships often involve upfront payments, milestone payments based on the achievement of specific development or regulatory goals, and royalties on product sales. Additionally, Adagene may receive research and development funding as part of its collaborations, contributing to its revenue streams. The company's earnings are significantly influenced by the progress and success of its clinical trials, as well as its ability to establish and maintain strategic partnerships with larger pharmaceutical entities.

Adagene Financial Statement Overview

Summary

Adagene faces significant financial challenges, with declining revenues, substantial losses, and negative cash flows. While the debt level remains manageable, the reduction in equity poses a risk to financial stability.

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

Adagene Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.91
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADAG, the sentiment is Negative. The current price of 1.91 is below the 20-day moving average (MA) of 1.97, below the 50-day MA of 1.94, and below the 200-day MA of 1.95, indicating a bearish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 39.44 is Neutral, neither overbought nor oversold. The STOCH value of 24.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ADAG.

Adagene Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AVTX	56 Neutral	$123.11M	―	-90.25%	―	-45.35%	96.80%
CRBU	52 Neutral	$166.48M	―	-52.76%	―	-72.45%	-28.60%
Sector *	47 Neutral	C$212.69M	-1.55	-24.76%	3.11%	19.75%	0.14%
ADAG	44 Neutral	$89.98M	―	-63.24%	―	-87.65%	11.76%
IGMS	44 Neutral	$80.57M	―	-47.82%	―	4882.82%	75.40%
ADVM	41 Neutral	$51.60M	―	-222.28%	―	―	1.80%
TNYA	36 Underperform	$123.37M	―	-85.21%	―	―	38.94%