Adagene (ADAG) AI Stock Analysis

• Market Cap: $83.89M
• Dividend Yield: N/A
• Average Volume (3M): 97.66K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.53
• 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: 111,863
• 30 Day Avg. Volume: 97,662
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.43
• Enterprise Value/Revenue: 347.78
• Enterprise Value/Gross Profit: -31.95
• Enterprise Value/Ebitda: -1.01
• 1Y Price Target: $7.67
• Price Target Upside: 335.80% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 45 Neutral
• Price Target: $2.00 ▲(13.64% 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 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. 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

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: Negative
• Last Price: 1.76
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 1.76 is below the 20-day moving average (MA) of 1.95, below the 50-day MA of 2.07, and below the 200-day MA of 1.88, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 31.43 is Neutral, neither overbought nor oversold. The STOCH value of 8.47 is Positive, 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
CLNN	57 Neutral	$83.08M	―	-1738.36%	―	-35.29%	45.18%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
ADAG	45 Neutral	$83.89M	―	-63.41%	―	-87.59%	11.53%
IFRX	44 Neutral	$83.25M	―	-62.38%	―	―	―
IMA	41 Neutral	$84.87M	―	-23.76%	―	-100.00%	55.32%
ANEB	35 Underperform	$103.53M	―	-109.69%	―	―	15.82%
QNCX	31 Underperform	$103.67M	―	-167.04%	―	―	13.49%

Adagene Corporate Events

Adagene Announces H1 2025 Financial Results and Strategic Developments

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.