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Adagene (ADAG)
NASDAQ:ADAG
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Adagene (ADAG) AI Stock Analysis

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ADAG

Adagene

(NASDAQ:ADAG)

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Neutral 45 (OpenAI - 4o)
Rating:45Neutral
Price Target:
$2.00
▲(2.04% 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 support with mixed signals, but valuation remains a concern due to the negative P/E ratio. The absence of earnings call and corporate events data limits further insights.
Positive Factors
Strategic Partnerships
The amended agreement with Exelixis enhances Adagene's collaborative efforts, leveraging its SAFEbody technology for innovative therapies, potentially increasing market reach and product development success.
Regulatory Alignment
Alignment with the FDA on trial designs for ADG126 indicates regulatory progress, facilitating smoother clinical development and potentially accelerating market entry for new therapies.
Financial Backing
The investment from Sanofi not only extends Adagene's cash runway into 2027 but also underscores confidence in its technology, supporting ongoing R&D and strategic growth initiatives.
Negative Factors
Revenue Decline
A significant decline in revenue poses a challenge to financial stability, impacting Adagene's ability to fund operations and invest in future growth, necessitating strategic pivots or partnerships.
Negative Cash Flow
Negative cash flow indicates difficulties in sustaining operations without external funding, potentially limiting Adagene's capacity to invest in R&D and expand its therapeutic pipeline.
Profitability Issues
Severe profitability issues, as indicated by negative margins, highlight operational inefficiencies and the need for cost management or revenue enhancement strategies to achieve financial sustainability.

Adagene (ADAG) vs. SPDR S&P 500 ETF (SPY)

Adagene Business Overview & Revenue Model

Company DescriptionAdagene (ADAG) is a biotechnology company that operates in the pharmaceutical and life sciences sectors. The company specializes in the development of innovative antibody-based therapies, utilizing its proprietary Dynamic Precision Library (DPL) technology to create novel therapeutics targeting various diseases, including cancer. Adagene's core focus is on advancing its pipeline of products through clinical trials and strategic collaborations to bring effective treatments to market.
How the Company Makes MoneyAdagene 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 is manageable, the reduction in equity poses a potential risk. The company needs to address its profitability and cash generation to improve its financial health.
Income Statement
25
Negative
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
40
Negative
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
35
Negative
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue103.20K103.20K18.11M9.29M10.18M480.00K
Gross Profit-1.12M-823.04K18.11M9.29M10.18M480.00K
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 Assets66.52M89.27M115.73M152.40M189.51M84.26M
Cash, Cash Equivalents and Short-Term Investments62.83M85.19M109.93M143.76M174.39M75.15M
Total Debt6.85M18.49M22.31M27.97M7.49M7.98M
Total Liabilities28.61M38.74M45.17M69.31M32.95M173.65M
Stockholders Equity37.91M50.52M70.56M83.09M156.56M-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 Flow905.09K1.11M-77.36K-686.05K-2.51M7.07M
Financing Cash Flow-6.43M3.77M-5.37M17.82M145.36M4.44M

Adagene Technical Analysis

Technical Analysis Sentiment
Negative
Last Price1.96
Price Trends
50DMA
2.09
Negative
100DMA
1.97
Negative
200DMA
1.89
Positive
Market Momentum
MACD
-0.03
Positive
RSI
42.07
Neutral
STOCH
12.56
Positive
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 1.96 is below the 20-day moving average (MA) of 2.16, below the 50-day MA of 2.09, and above the 200-day MA of 1.89, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 42.07 is Neutral, neither overbought nor oversold. The STOCH value of 12.56 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ADAG.

Adagene Risk Analysis

Adagene disclosed 120 risk factors in its most recent earnings report. Adagene reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Adagene Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
52
Neutral
142.05M-1.15-26.41%-45.35%96.80%
52
Neutral
198.35M-1.19-58.95%-72.45%-28.60%
49
Neutral
94.64M-0.57-185.15%1.80%
45
Neutral
$95.68M-63.24%-87.65%11.76%
36
Underperform
270.54M-1.7338.94%
51
Neutral
$7.86B-0.30-43.30%2.27%22.53%-2.21%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ADAG
Adagene
1.96
-0.26
-11.71%
ADVM
Adverum Biotechnologies
4.51
-2.51
-35.75%
AVTX
Avalo Therapeutics
10.80
1.30
13.68%
IGMS
IGM Biosciences
1.27
-15.27
-92.32%
CRBU
Caribou Biosciences
2.13
0.17
8.67%
TNYA
Tenaya Therapeutics
1.66
-0.27
-13.99%

Adagene Corporate Events

Adagene Announces H1 2025 Financial Results and Strategic Developments
Aug 12, 2025

On August 12, 2025, Adagene Inc. announced its financial results for the first half of 2025, highlighting significant advancements in its clinical programs and strategic partnerships. The company reported promising data from its Phase 1b/2 trial of ADG126 in combination with Merck’s KEYTRUDA® for microsatellite stable colorectal cancer, showing a median overall survival of 19.4 months in the 10 mg/kg dose cohort. Additionally, Adagene has aligned with the FDA on the design elements for upcoming Phase 2 and Phase 3 trials, with plans to begin patient enrollment in the second half of 2025. The company also secured a strategic investment of up to $25 million from Sanofi, extending its cash runway into 2027, and entered into a partnership with ConjugateBio for the development of bispecific ADCs.

Adagene Advances Clinical Plan for ADG126 in Colorectal Cancer After FDA Meeting
Jul 15, 2025

Adagene Inc. announced a regulatory update on its clinical development plan for muzastotug (ADG126) following a productive Type B meeting with the FDA. The company has aligned on Phase 2 trial criteria and expects to begin patient enrollment in the second half of 2025. The trial will evaluate ADG126 in combination with Merck’s KEYTRUDA® for microsatellite stable colorectal cancer. The FDA’s endorsement allows Adagene to explore higher doses of ADG126, which have shown promising efficacy and safety profiles. This advancement is a critical step towards a registrational trial for FDA approval, potentially enhancing Adagene’s positioning in the oncology therapeutics market.

Adagene Secures $25 Million Investment from Sanofi to Advance Cancer Therapies
Jul 1, 2025

Adagene Inc. announced a strategic investment of up to $25 million from Sanofi, with the first closing of $17 million expected on July 2, 2025. The investment will support the development of Adagene’s anti-CTLA-4 SAFEbody, muzastotug, in a phase 2 trial for colorectal cancer. Sanofi also exercised its option for a third SAFEbody discovery program, highlighting the potential of Adagene’s platform. The collaboration is expected to extend Adagene’s cash runway into 2027, with a Sanofi representative joining Adagene’s Scientific Advisory Board.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 24, 2025