Adagene (ADAG) AI Stock Analysis

• Market Cap: $139.51M
• Dividend Yield: N/A
• Average Volume (3M): 94.20K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.41
• 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: 47,131,270
• 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: 0.40
• Enterprise Value/Revenue: 539.01
• Enterprise Value/Gross Profit: -49.52
• Enterprise Value/Ebitda: -1.56
• 1Y Price Target: $8.50
• Price Target Upside: 187.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): -0.73
• Revenue Forecast (FY): N/A

• Rating: 53 Neutral
• Price Target: $3.00 ▲(1.35% Upside)
• Action: Reiterated Date: 01/24/26
• Date: Action: Reiterated 01/24/26

The score is held back primarily by very weak financial performance (sharp revenue decline, large losses, and negative/worsening cash flows). Technicals are a key offset with an established uptrend and positive momentum, while valuation remains constrained by negative earnings and no stated dividend yield.

Positive Factors

Platform monetization via licensing

The Third Arc licensing deal demonstrates the SAFEbody platform can be monetized through non-dilutive upfronts and large milestone upside. Durable partner revenue streams and broad licensing rights expand market reach and validate platform utility for third-party developers.

Multi-year cash runway

A reported cash balance funding operations into late 2027 provides durable near-term financial flexibility to complete planned Phase 2 work and readouts. This reduces immediate financing pressure and allows execution of clinical value-creation milestones and partnership searches.

Clinical progress and regulatory alignment

Fast Track and end-of-Phase 1 alignment reflect regulatory de-risking and stronger development credibility for muzastotug. Ongoing randomized Phase 2 and planned data readouts bolster long-term probability of advancement and partner interest, strengthening strategic positioning in IO.

Negative Factors

Sharp revenue decline

A near-total revenue collapse signals fragile or lumpy collaboration receipts and undermines recurring revenue predictability. Over months this increases reliance on milestone timing, complicates cash planning and heightens execution risk if partnerships or payments delay.

Negative and worsening operating cash flow

Persistently negative operating cash flow and declining free cash flow indicate the business burns cash to fund R&D. Over the medium term this raises dilution and refinancing risk, constraining the company's ability to self-fund trials or expand without new partnership or financing events.

Deep losses and negative margins

Extremely negative margins reflect high R&D and operating spend relative to revenues, causing substantial losses. Structurally, this limits reinvestment capacity, increases dependency on external capital, and weakens the firm's ability to scale operations profitably without major clinical or partnership successes.

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

Income statement and cash flow are weak: revenue fell ~99% from 2023 to 2024, margins are deeply negative, and operating/free cash flow remain negative and worsening. Balance sheet is comparatively steadier with manageable leverage (debt-to-equity ~0.37) and a reasonable equity ratio (~56.6%), but declining equity is a concern.

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	Mar 2022	Mar 2021
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: 2.96
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 2.96 is below the 20-day moving average (MA) of 3.01, above the 50-day MA of 2.37, and above the 200-day MA of 2.05, indicating a neutral trend. The MACD of 0.22 indicates Positive momentum. The RSI at 53.45 is Neutral, neither overbought nor oversold. The STOCH value of 34.32 is Neutral, 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	53 Neutral	$139.51M	-4.59	-63.41%	―	-87.59%	11.53%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
CLNN	45 Neutral	$61.54M	―	―	―	-49.17%	23.37%
IMA	45 Neutral	$78.71M	-0.83	-33.05%	―	-100.00%	45.48%
IFRX	43 Neutral	$61.76M	-0.88	―	―	―	―
ANEB	42 Neutral	$14.68M	-1.85	-145.11%	―	―	23.10%
QNCX	40 Underperform	$7.00M	-0.10	-247.78%	―	―	2.26%

Adagene Corporate Events

Adagene Outlines 2026 Clinical Milestones and Reports $74.5 Million Year-End Cash Runway

On January 23, 2026, Adagene reported unaudited cash and cash equivalents of $74.5 million as of December 31, 2025, which it expects to fund operations into late 2027, and detailed a series of 2025 milestones centered on its lead CTLA-4 antibody muzastotug and its SAFEbody technology platform. Over the past year, the company presented Phase 1b/2 data in microsatellite stable colorectal cancer showing encouraging responses at high doses, secured FDA Fast Track designation and end-of-Phase 1 alignment for muzastotug, initiated a randomized Phase 2 dose-optimization study, and expanded strategic partnerships with Sanofi, Third Arc Bio, Exelixis and ConjugateBio, underscoring growing external validation of its platform and adding non-dilutive support for clinical development. For 2026, Adagene plans multiple data readouts from ongoing muzastotug combination trials in colorectal and liver cancer and aims to complete Phase 2 enrollment and secure additional collaborations, steps that could sharpen its late-stage development path, strengthen its competitive positioning in next-generation immuno-oncology, and provide key catalysts for investors over the next two years.

The most recent analyst rating on (ADAG) stock is a Hold with a $2.00 price target. To see the full list of analyst forecasts on Adagene stock, see the ADAG Stock Forecast page.

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.

The most recent analyst rating on (ADAG) stock is a Sell with a $1.50 price target. To see the full list of analyst forecasts on Adagene stock, see the ADAG Stock Forecast page.