Adagene (ADAG) AI Stock Analysis

• Market Cap: $100.86M
• Dividend Yield: N/A
• Average Volume (3M): 90.88K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.56
• Revenue Growth: -87.65%
• EPS Growth: 11.76%
• Country: US
• Employees: 138
• Sector: Healthcare
• Sector Strength: 51
• Industry: Biotechnology
• EPS (TTM): -0.23
• Shares Outstanding: 47,109,554
• 10 Day Avg. Volume: 74,384
• 30 Day Avg. Volume: 90,882
• 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: 0.36
• Enterprise Value/Revenue: 347.78
• Enterprise Value/Gross Profit: -31.95
• Enterprise Value/Ebitda: -1.01
• 1Y Price Target: $7.00
• Price Target Upside: 218.18% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 47 Neutral
• Price Target: $2.00 ▼(-9.09% Downside)

Adagene's overall stock score is primarily impacted by its poor financial performance, characterized by significant losses and negative cash flows. While technical analysis shows some positive momentum, the negative valuation metrics due to unprofitability further weigh down the score. The absence of earnings call insights and corporate events means these factors do not influence the score.

Positive Factors

Clinical Development

Adagene presented positive data from its ongoing Phase 1/2 study with ADG126 at the 2025 American Society of Clinical Oncology Gastrointestinal Cancers Symposium, which further solidified ADG126’s therapeutical potential in MSS-CRC.

Regulatory Milestone

FDA alignment on trial design of both Phase 2 and 3 studies with ADG126 is seen as an important regulatory milestone, providing clarity on ADG126’s development path.

Strategic Investment

Adagene announced a strategic investment of up to $25M from Sanofi, which strengthens its balance sheet to advance its proprietary pipeline.

Negative Factors

Financial Performance

For 2H24, the company reported collaboration revenue of $0.1M and a net loss of $0.29 per share, compared to an estimate of no revenue and a net loss of $0.33 per share.

Adagene Business Overview & Revenue Model

Company Description

Adagene (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 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 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: Positive
• Last Price: 2.20
• 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 2.2 is above the 20-day moving average (MA) of 2.11, above the 50-day MA of 2.01, and above the 200-day MA of 1.90, indicating a bullish trend. The MACD of 0.06 indicates Positive momentum. The RSI at 53.56 is Neutral, neither overbought nor oversold. The STOCH value of 20.24 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
AVTX	60 Neutral	$133.63M	―	-90.25%	―	-45.35%	96.80%
CRBU	52 Neutral	$172.28M	―	-68.93%	―	-72.45%	-28.60%
Sector *	51 Neutral	$7.92B	-0.43	-41.67%	2.21%	22.29%	-1.85%
ADAG	47 Neutral	$100.86M	―	-63.24%	―	-87.65%	11.76%
IGMS	44 Neutral		―		―	4882.82%	75.40%
ADVM	41 Neutral	$66.52M	―	-222.28%	―	―	1.80%
TNYA	36 Underperform	$202.09M	―	-85.21%	―	―	38.94%