Core Insights - Adagene Inc. reported significant advancements in its clinical pipeline, particularly with its lead candidate ADG126, a masked anti-CTLA-4 SAFEbody, demonstrating a best-in-class therapeutic index in metastatic microsatellite-stable colorectal cancer [1][2][26] - The company has initiated a phase 2 dose expansion study for ADG126, increasing patient enrollment to over 50, and introduced a new 20 mg/kg loading dose regimen, with data expected in 2024 [1][3][11] - Financially, Adagene ended 2023 with a cash balance of approximately US$110 million, which is projected to fund operations into 2026, alongside a notable increase in net revenue [1][13][14] Clinical Pipeline Highlights - ADG126 has shown a 30-fold improved therapeutic index and a mechanism for CTLA-4 mediated intratumoral Treg depletion, allowing for higher and more frequent dosing in combination with anti-PD-1 therapy [2][3] - In a phase 1b/2 trial, ADG126 demonstrated a differentiated safety profile with limited dose-dependent toxicities, achieving a 22% overall response rate in a subset of patients without liver metastases [3][4] - The ongoing clinical program for ADG126 includes a loading dose regimen and maintenance doses, with promising preliminary results in progression-free survival [4][11] Financial Performance - For the year ended December 31, 2023, Adagene reported net revenue of US$18.1 million, a 95% increase from US$9.3 million in 2022, primarily due to collaboration agreements [14] - Research and development expenses decreased by approximately 55% to US$36.6 million, reflecting a focused clinical strategy on ADG126 [15] - The net loss attributable to shareholders was US$18.9 million for 2023, significantly reduced from US$80.0 million in 2022, indicating improved financial health [18][20] Collaborations and Partnerships - Adagene has strategic collaborations with Exelixis and Sanofi, focusing on developing novel masked antibody-drug conjugates and bispecific antibodies, with potential milestone payments reaching up to US$2.5 billion [7][8] - The company is also collaborating with Roche on a phase 1b/2 trial evaluating ADG126 in combination with other therapies for hepatocellular carcinoma [8] Board of Directors Changes - Recent changes to the Board of Directors include the appointment of Dr. Ulf Grawunder as an independent director, enhancing the board's expertise in therapeutic antibody development [9][10]

- Global oncology expert brings deep insight in colorectal cancer and role of CTLA-4 therapy as a cornerstone for combination immunotherapy - SAN DIEGO and SUZHOU, China, March 07, 2024 (GLOBE NEWSWIRE) -- Adagene Inc. ("Adagene") (NASDAQ:ADAG), a company transforming the discovery and development of antibody-based therapies, today announced the appointment of Heinz-Josef Lenz, M.D., FACP, to its Scientific and Strategic Advisory Board (the "SAB"). Dr. Lenz is the Associate Director for Clinical Research an ...

- Data from first tranche of MSS CRC patients treated with ADG126 10 mg/kg every three weeks (Q3W) in dose expansion showed clinical benefit including confirmed responses at higher, more frequent and repeat doses of the anti-CTLA-4 therapy - - Preliminary survival analysis of ADG126 10 mg/kg dosing regimens in patients without liver and peritoneal metastases indicates best-in-class median progression-free survival (PFS) of seven months - - Data from additional patients at 10 mg/kg Q3W dosing regimen expecte ...

[Adagene Board of Directors Update (April 28, 2023)](index=1&type=section&id=Adagene%20Announces%20Updates%20to%20its%20Board%20of%20Directors) Adagene announced significant changes to its Board of Directors, including new appointments and resignations, effective April 28, 2023 [New Director Appointments](index=1&type=section&id=New%20Director%20Appointments) Adagene appointed three new members to its Board of Directors: Dr. Mervyn Turner, Dr. Fangyong (Felix) Du, and Ms. Yumeng Wang - Dr. Mervyn Turner was appointed as a director, bringing over 25 years of experience from Merck Research Laboratories, where he served as head of worldwide licensing and later as the first Chief Strategy Officer[1](index=1&type=chunk) - Dr. Fangyong (Felix) Du, Adagene's Chief Technology Officer since May 2019, was appointed as a director, having been with the company since January 2012[2](index=2&type=chunk) - Ms. Yumeng Wang was appointed as a director, designated by General Atlantic, focusing on healthcare and life sciences investments[3](index=3&type=chunk) [Director Resignations and Replacements](index=1&type=section&id=Director%20Resignations%20and%20Replacements) Lefei Sun resigned and was replaced by Yumeng Wang, while Yuwen Liu also resigned following the expiration of her term, with both confirming no disagreements - Yumeng Wang replaces Lefei Sun as a director, leading to Mr. Sun's resignation from the Board[3](index=3&type=chunk)[4](index=4&type=chunk) - Yuwen Liu resigned from the Board and the audit committee due to the expiration of her initial appointment term[4](index=4&type=chunk) - Both Lefei Sun and Yuwen Liu confirmed no disagreements with the Board and no matters related to their resignations requiring shareholder attention[4](index=4&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) CEO Peter Luo welcomed the new directors, highlighting their experience, and expressed gratitude to the departing directors for their contributions - CEO Peter Luo expressed excitement about the new directors, anticipating their help in advancing clinical products, harvesting value from preclinical assets, and leveraging platform technologies for growth[5](index=5&type=chunk) - The CEO acknowledged the contributions of Lefei Sun over his four years of service and Yuwen Liu over the past year[5](index=5&type=chunk) [Company Overview](index=2&type=section&id=About%20Adagene) Adagene is a clinical-stage biotechnology company leveraging computational biology and AI to develop novel antibody-based cancer immunotherapies - Adagene is a platform-driven, clinical-stage biotechnology company focused on discovering and developing novel antibody-based cancer immunotherapies[6](index=6&type=chunk) - The company utilizes its proprietary Dynamic Precision Library (DPL) platform, comprising NEObody™, SAFEbody®, and POWERbody™ technologies, to design novel antibodies[6](index=6&type=chunk) [Safe Harbor Statement](index=2&type=section&id=Safe%20Harbor%20Statement) This statement includes forward-looking information regarding clinical development and commercialization, cautioning that actual results may differ due to various risks - The document contains forward-looking statements regarding clinical data, development activities, regulatory milestones, and commercialization of its product candidates[7](index=7&type=chunk) - Key risks that could cause actual results to differ include the ability to demonstrate drug safety and efficacy, unfavorable clinical results, regulatory approval decisions, and reliance on third parties for development and manufacturing[7](index=7&type=chunk)

Table of Contents | --- | --- | |-------|------------------------------------------------------------------------| | | Adagene Inc. | | | (Exact name of Registrant as specified in its charter) | | | N/A | | | (Translation of Registrant's name into English) | | | Cayman Islands | UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 1 ...

Financial Status and Collaborations - Adagene's cash position was $174 million as of December 31, 2021[6], and the company received $17.5 million upfront from Sanofi and a $3 million milestone payment from Exelixis in early 2022[6, 107] - Adagene has a technology licensing agreement with Sanofi potentially worth $2.5 billion[6, 101, 104, 105], including a $17.5 million upfront payment[6, 101, 105] - Adagene has a technology licensing agreement with Exelixis, including $11 million upfront and a $3 million milestone achieved[6, 101] Pipeline and Clinical Programs - Adagene has 3 wholly-owned clinical assets and 5 programs in IND-enabling studies[6] - Adagene plans to submit IND or equivalent filings for two new candidates in 2022[6, 7, 46, 50, 51] - Adagene has >50 programs in discovery phase[7, 10, 46, 48] - Adagene's ADG116 monotherapy dose escalation completed at 10 mg/kg, with dose expansion ongoing and escalation initiated at 15 mg/kg[17, 22] - Adagene's ADG126 has enrolled 25 patients in Phase 1b/2 trial as of May 26, 2022, with no DLTs up to 10 mg/kg[17, 27] Anti-CTLA-4 Programs - The global market for CTLA-4 inhibitors is estimated to reach $11.9 billion by 2035[11] - Ipilimumab monotherapy had 36% Grade 3/4 treatment-related adverse events (AEs) in the 10 mg/kg group versus 20% in the 3 mg/kg group[14] - ADG126 showed durable reductions in target lesions (>20%) in 2 heavily pretreated patients with cold tumors[29] ADG106 Program - ADG106 showed a 2-fold synergistic effect with toripalimab for immune activation in clinical PD biomarker analysis[39]

Financial Performance - The company reported net losses of US$16.4 million, US$42.4 million, and US$73.2 million for the years ended December 31, 2019, 2020, and 2021, respectively, with an accumulated deficit of US$178.8 million as of December 31, 2021[875]. - Net loss attributable to Adagene Inc.'s shareholders increased by 72.6% from US$42.4 million in 2020 to US$73.2 million in 2021, largely due to increased clinical and operating activities[943]. - Non-GAAP net loss for 2021 was US$54.5 million, compared to US$32.3 million in 2020, with a non-GAAP net loss per ordinary share of US$1.09[945]. - GAAP net loss attributable to ordinary shareholders increased from US$16.7 million in 2019 to US$73.2 million in 2021[950]. - Net cash used in operating activities was US$43.4 million in 2021, up from US$28.5 million in 2020[958][960]. - Cash and cash equivalents at the end of 2021 were US$174.4 million, a significant increase from US$75.2 million in 2020[957]. - Net cash generated from financing activities was US$145.4 million in 2021, primarily from the initial public offering[964]. - The company expects to incur additional operating losses and increased expenses as it expands research and development capabilities[951]. Research and Development - Research and development expenses increased from US$16.2 million in 2019 to US$68.1 million in 2021, primarily due to higher personnel costs and increased clinical activities[881]. - The clinical-stage pipeline includes three candidates: ADG116, ADG126, and ADG106, all currently in Phase 1b/2 clinical evaluation[873]. - The company has a robust preclinical pipeline with five programs in IND-enabling studies and over 50 programs in various stages of discovery[873]. - Research and development expenses rose by 103.1% from US$33.5 million in 2020 to US$68.1 million in 2021, driven by increased personnel costs and greater clinical activities[935]. - Research and development expenses include payroll, pre-clinical testing, and costs related to product candidates, with no accrued expenses for contract cancellations as of December 31, 2020, or 2021[919]. - Research and development expenses are charged as incurred, with preclinical and clinical trial costs being a significant component[979][980]. Revenue and Income - The company has not generated any revenue from product sales and does not expect to do so in the near future[879]. - The company recognizes revenue from out-licensing agreements when control of the licensed product is transferred to the customer[911]. - Licensing and collaboration revenue increased from US$0.7 million in 2020 to US$10.2 million in 2021, primarily due to US$8.5 million from a collaboration with Exelixis, Inc.[934]. - Other income increased from US$1.0 million in 2020 to US$1.8 million in 2021, due to government subsidies and R&D tax incentives[940]. Expenses - Administrative expenses increased by 40.0% from US$10.3 million in 2020 to US$14.4 million in 2021, mainly due to higher personnel and professional fees[936]. - The company incurred administrative expenses that are expected to increase as it operates as a public company and advances its product candidates[887]. - The company anticipates significant increases in expenses related to the advancement of its proprietary Dynamic Precision Library platform and ongoing clinical trials[875]. Taxation - The company is subject to a 25% enterprise income tax rate in China, with a preferential rate of 15% for qualified Technology Advanced Service Enterprises[893]. - If classified as a PRC resident enterprise, the company would face a 25% enterprise income tax on worldwide income[896]. - As of December 31, 2021, the company incurred an income tax expense of $1.7 million due to taxable profits generated by its U.S. subsidiary[924]. - Income tax expense for 2021 was US$1.7 million, compared to nil in 2020, primarily due to current tax expenses from Adagene Incorporated[942]. Corporate Governance - The executive team includes Peter Luo as CEO, Fangyong Du as CTO, and JC Xu as Chief Scientific Officer, among others[986][989]. - The Chief Financial Officer, Man Kin Tam, has over 20 years of experience in finance and banking across the Asia-Pacific region[994]. - The company’s Chief Strategy and Corporate Development Officer, Yu Ren, has tendered his resignation effective early June 2022[995]. - The board of directors consists of six members, including three independent directors, complying with Nasdaq's corporate governance rules[1041]. - The audit committee is chaired by Andy (Yiu Leung) Cheung, who is recognized as an "audit committee financial expert"[1044]. - The compensation committee, chaired by Peter Luo, is responsible for reviewing and approving compensation structures for executive officers[1046]. - The nominating and corporate governance committee, also chaired by Peter Luo, evaluates board composition and recommends nominees for election[1048]. - Directors owe fiduciary duties to the company, including a duty of loyalty and a duty to act in good faith[1049]. Employee Compensation and Benefits - The company paid an aggregate of US$3.4 million in cash to executive officers for the fiscal year ended December 31, 2021[1010]. - An aggregate of US$179 thousand in cash was paid to independent directors for the same fiscal year[1010]. - The company did not set aside or accrue expenses related to pension, retirement, or similar benefits for executive officers and directors for the fiscal year ended December 31, 2021[1010]. - The company participates in various employee social security plans, including pension and medical insurance, as required by Chinese regulations[1058]. - The company plans to continue granting share-based incentive awards to employees to incentivize their contributions[1058]. Shareholder Information - The beneficial ownership of ordinary shares as of March 31, 2022, shows Peter Luo's act-in-concert group owning 11,547,539 shares, representing 21.1%[1065]. - The total number of ordinary shares issued and outstanding as of March 31, 2022, was 54,742,598[1061]. - The total number of shares beneficially owned by all directors and executive officers as a group is 11,599,039, representing 21.2%[1065]. Miscellaneous - The COVID-19 pandemic has the potential to delay clinical trials and impact business operations, with ongoing monitoring of its effects[876]. - The company has a history of strategic partnerships and collaborations, enhancing its business development efforts[989]. - The company has not experienced any material labor disputes and maintains a good working relationship with its employees[1059].