Adagene (ADAG) AI Stock Analysis

• Market Cap: $67.37M
• Dividend Yield: N/A
• Average Volume (3M): 32.36K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.46
• Revenue Growth: -99.43%
• EPS Growth: -69.40%
• Country: US
• Employees: 138
• Sector: Healthcare
• Sector Strength: 69
• Industry: Biotechnology
• EPS (TTM): -0.74
• Shares Outstanding: 47,109,554
• 10 Day Avg. Volume: 12,602
• 30 Day Avg. Volume: 32,356
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.37
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 239.86
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $8.00
• Price Target Upside: 467.38% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Adagene's stock score is low due to significant financial challenges, including declining revenues and negative cash flows. The technical analysis shows weak momentum, and valuation presents difficulties due to negative earnings. These factors collectively weigh down the stock's overall score.

Positive Factors

Clinical Development

Promising efficacy and favorable safety profiles for ADG126 plus pembrolizumab reinforce the drug's potential in MSS-CRC and other cancer indications approved for anti-CTLA-4 agents.

Financial Position

Adagene had approximately $85M in cash and cash equivalents, which is believed to be sufficient to support operations into 2H26.

Regulatory Pathway

Key opinion leaders believe a drug that delivers a high response rate and maintains repeat dosing and durable efficacy in a high percentage of patients is likely to get FDA approval, potentially via an Accelerated Approval pathway.

Negative Factors

Development Timeline

The launch timeline of ADG126 has been pushed out from 2028 to 2029, reflecting uncertainty in its development plan.

Market Opportunity

Analyst is moving to the sidelines based on a combination of factors including the relatively small market opportunity, regulatory uncertainty, and safety concerns with targeting CTLA-4.

Regulatory Uncertainty

Regulatory uncertainty is a concern as another company is testing a similar immunotherapy combination for a similar treatment.

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 partnerships and collaborations with other biotechnology and pharmaceutical companies. These partnerships often involve milestone payments and royalties based on the successful development and commercialization of antibody-based therapies. Additionally, Adagene may receive funding through licensing agreements for its proprietary technology platforms. The company's revenue model is heavily reliant on these strategic alliances, research and development collaborations, and potential future sales of its own developed therapeutic products.

Adagene Financial Statement Overview

Summary

Adagene's financial performance faces significant challenges. The income statement shows a steep decline in revenue, with deeply negative net profit margins. The balance sheet indicates a moderate financial position but with declining stockholders' equity, posing potential risks. Cash flow is negative, with worsening operating cash flow and free cash flow, indicating difficulty in cash generation.

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
103.20K	18.11M	9.29M	10.18M	480.00K
	EBIT
-35.95M	-23.72M	-83.92M	-72.36M	-19.17M
	EBITDA
-31.65M	-14.95M	-77.39M	-69.99M	-41.34M
	Net Income Common Stockholders
-33.42M	-18.95M	-79.97M	-73.18M	-16.44M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
85.19M	109.93M	143.76M	174.39M	75.15M
	Total Assets
89.27M	115.73M	152.40M	189.51M	84.26M
	Total Debt
18.49M	22.31M	27.97M	7.49M	7.98M
	Net Debt
-66.70M	-87.63M	-115.79M	-166.90M	-67.17M
	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: 1.41
• 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 1.41 is below the 20-day moving average (MA) of 1.52, below the 50-day MA of 1.74, and below the 200-day MA of 2.20, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 39.09 is Neutral, neither overbought nor oversold. The STOCH value of 10.71 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
Sector *	51 Neutral	$5.35B	3.41	-40.83%	2.89%	18.11%	2.60%
ADVM	42 Neutral	$71.35M	―	-144.41%	―	-72.22%	51.40%
ADAG	38 Underperform	$67.37M	―	-55.14%	―	-99.43%	-69.40%
CRBU	38 Underperform	$71.77M	―	-47.99%	―	-71.01%	-14.04%
AVTX	37 Underperform	$57.42M	―	-50.06%	―	-77.09%	63.49%
TNYA	36 Underperform	$78.68M	―	-95.69%	―	―	23.55%
IGMS	34 Underperform	$77.71M	―	-155.76%	―	25.77%	32.56%