Adagene Inc. (“Adagene”) (Nasdaq: ADAG), a platform-driven,
clinical-stage biotechnology company transforming the discovery and
development of novel antibody-based therapies, today reported
financial results for the six months ended June 30, 2023 and
provided corporate updates.
“Our anti-CTLA-4 clinical programs demonstrate that an enhanced
therapeutic index is capable of unleashing the clinical potential
of CTLA-4 treatment, with the right dosing regimens, as a
cornerstone in combination with PD-1 and beyond,” said Peter Luo,
Ph.D., Chairman, CEO and President of R&D at Adagene. “We have
observed impressive clinical responses in the initial basket trial
for ADG126 plus PD-1 therapy in patients where CTLA-4-mediated Treg
depletion is essential for efficacy, including cold tumors such as
MSS CRC, PD-L1 low expressing and PD-1 resistant warm tumors,
enabled by our safety profile for higher, more frequent and repeat
dosing.”
He continued, “This safety and efficacy profile allows us to
evaluate ADG126 plus pembrolizumab in a homogenous patient group
for the first time in advanced/metastatic MSS CRC patients,
following Simon’s two-stage statistical design for a single arm
phase 2 trial. We are very excited to observe a strong efficacy
signal in the first stage and we are now enrolling patients in the
second stage with the active dose of ADG126 10 mg/kg every three
weeks. We are optimistic about our ability to push the boundaries
of CTLA-4 therapy to improve cancer care.”
ANTI-CTLA-4 HIGHLIGHTS
- Phase 1b/2 data for ADG116, an unmasked anti-CTLA-4
NEObody™ targeting a unique epitope, showed a favorable safety
profile and clinical responses, both in monotherapy and in
combination with anti-PD-1:
- ADG116 monotherapy has demonstrated a favorable safety profile
at doses up to 15 mg/kg (N=59).
- In heavily pre-treated patients across tumors, ADG116
monotherapy resulted in an overall response rate (ORR) of 13% (3/23
evaluable), including confirmed partial responses (PR) in renal
cell carcinoma (RCC) and MSI-H endometrial cancer, as well as an
initial PR in Kaposi’s sarcoma.
- ADG116 (3 mg/kg Q6W) in combination with anti-PD-1 therapy
(N=22) showed a manageable safety profile and an encouraging
efficacy profile in dose escalation. Clinical responses from the
ongoing combination cohorts include a sustained complete response
(CR) for greater than one year in a head and neck squamous cell
carcinoma (HNSCC) patient dosed with repeat cycles of ADG116 3
mg/kg (initially every three weeks, then every six weeks) plus
toripalimab (ORR = 20%; 1/5 evaluable).
- Additionally, an initial PR was observed in a patient with MSS
CRC dosed with repeat cycles of ADG116 3 mg/kg every six weeks plus
toripalimab (ORR = 14%; 1/7 evaluable).
- ADG116 is clinically active and ready to advance into
randomized phase 2 studies as resources allow, while combination
dose expansion is evaluating ADG116 with anti-PD-1 therapy.
- Phase 1b/2 data for ADG126,
a masked anti-CTLA-4 SAFEbody targeting a unique epitope, showed
compelling safety and promising efficacy profiles at high dose
levels with repeat dosing both in monotherapy and in combination
with anti-PD-1:
- Data presented at the American Association for Cancer Research
(AACR) annual meeting 2023 showed ADG126 monotherapy was well
tolerated in dose escalation with no dose-limiting toxicities or
Grade 3 or higher TRAEs observed (N=30) in patients with
advanced/metastatic solid tumors. ADG126 was administered up to 20
mg/kg every three weeks with repeat dosing.
- The safety profile of ADG126 in combination with anti-PD-1
therapy (N=31) also showed best-in-class potential, including
repeat dosing beyond four cycles at 10 mg/kg every three or six
weeks, potentially enabling triple combination with other agents on
top of ADG126 plus anti-PD-1 backbone therapy.
- Data presented at AACR showed a strong efficacy profile for
ADG126 10 mg/kg in combination with the anti-PD-1 therapy
toripalimab, including two confirmed PRs in patients with anal SCC
and penile SCC, as well as significant tumor shrinkage (≥20%
reduction in target lesion) and prolonged stable disease observed
in patients with cold tumors, including MSS CRC with liver
metastases.
- At the 2023 AACR annual meeting, an additional confirmed PR was
reported in a patient with MSI-H endometrial cancer who received
ADG126 10 mg/kg in combination with the anti-PD-1 inhibitor
pembrolizumab.
- Following the AACR annual meeting, two additional confirmed
responses were observed in patients treated with ADG126 10 mg/kg
plus pembrolizumab outside of the MSS CRC dose expansion cohort:
- A confirmed PR in a cervical cancer patient who had progressed
after two lines of prior therapy, including nine cycles of
pembrolizumab monotherapy, meeting criteria for PD-1
resistance.
- A confirmed PR with complete reduction in target lesions
in a patient with HNSCC. The patient was IO-naïve with a low CPS
score.
- In dose escalation, among the evaluable patients dosed at 10
mg/kg every three weeks in combination with anti-PD-1 therapy, a
40% overall response rate (4/10) was observed, with 10% Grade 3
TRAEs reported, no TRAEs greater than Grade 3 reported, and no dose
limiting toxicities. Activity has also been observed at 10 mg/kg
every six weeks and at 6 mg/kg every three weeks.
- Adagene has dosed two different arms in its dose expansion
cohort of patients with MSS CRC without liver metastases treated
with ADG126 in combination with pembrolizumab: ADG126 10 mg/kg
every six weeks plus pembrolizumab (10 patients) and ADG126 10
mg/kg every three weeks plus pembrolizumab (13 patients). Based on
the strong efficacy signal observed in the ADG126 10 mg/kg
three-week cohort, the company is enrolling an additional 10
patients treated with this active dosing regimen, following Simon’s
two-stage statistical design for a single-arm phase 2 trial.
- Preliminary evaluation and analysis of efficacy data from this
tumor type-specific cohort in MSS CRC is expected later this year
or early 2024.
ADDITIONAL UPDATES
- Roche: Under a clinical trial collaboration
agreement entered in December 2022, Roche has initiated a phase
1b/2 multi-national trial to evaluate the efficacy and safety
profiles of ADG126 in a triple combination with atezolizumab and
bevacizumab, versus the approved combination of atezolizumab and
bevacizumab alone in first-line hepatocellular carcinoma (HCC). The
randomized trial in up to 60 patients has opened for enrollment,
leveraging Roche’s global clinical trial network for the MORPHEUS
program. Roche is sponsoring and conducting the trial while
Adagene retains global development and commercialization
rights to ADG126.
- Exelixis: Adagene has received a US$3.0
million milestone payment in June 2023 from Exelixis for the
successful nomination of lead SAFEbody candidates for the second
collaboration program under a technology licensing agreement to
develop novel masked antibody-drug conjugate candidates.
- Sanofi: Adagene and Sanofi continue working
together in their collaboration entered in March 2022 to develop
both bispecific and monoclonal SAFEbody antibody candidates,
preparing preclinical candidates using Adagene’s technology for
future development and commercialization by Sanofi.
- ADC Therapeutics: As of this announcement, the
material transfer and collaboration agreement dated April 2019
between ADCT and Adagene has expired, and ADCT elected not to
exercise its option for the related license agreement. The parties
remain open to explore opportunities for collaboration on the
discovery and development of innovative antibody therapeutics in
the future.
- ADG153 (a masked anti-CD47 IgG1
SAFEbody): At the AACR annual meeting,
Adagene presented preclinical data that showed the best-in-class
profile for ADG153, an IND-ready candidate in IgG1 format which
applies SAFEbody precision masking technology to optimize safety.
The poster presentation summarized data demonstrating strong in
vivo anti-tumor activities in solid tumor models and a robust
safety profile due to preferential CD47 target engagement in the
tumor microenvironment. ADG153 is differentiated by its strong
antibody-dependent cellular cytotoxicity (ADCC) and
antibody-dependent cellular phagocytosis (ADCP) activity designed
to realize the full potential of anti-CD47 therapy for both
hematologic and solid tumor indications.
- Board of Directors Updates: In August, Adagene
appointed Li Zhu, Ph.D. to its board of directors. Dr. Zhu has
served as director at GenScript and Legend Biotech since 2020 and
is currently Chief Strategy Officer at GenScript Biotech
Corporation. Dr. Zhu brings deep experience in corporate strategy,
strategic collaborations and alliance management, especially his
experience in negotiations and deal-making between Legend (a
subsidiary of GenScript) and multinational pharmaceutical
companies.Additionally, Fangyong (Felix) Du, Ph.D, Chief Technology
Officer at Adagene since 2020, is stepping down from the board for
personal reasons. The company also appointed Yan Li, one of the
founding members and Senior Vice President of Bioinformatics and
Information Technology at Adagene, as director.Earlier this year,
Adagene also announced the following updates to its board: Mervyn
Turner, Ph.D., former head of worldwide licensing and external
research at Merck Research Laboratories appointed director; Yumeng
Wang replaced Lefei Sun as a director designated
by General Atlantic Singapore AI Pte. Ltd; and Yuwen Liu
resigned from the Board and audit committee due to expiration of
her initial appointment.
- Scientific and Strategic Advisory Board (SAB):
In March, Professor Aurélien Marabelle, MD, PhD was appointed to
the company’s SAB. Professor Marabelle is a physician-scientist
with expertise in oncology and immunology working within the Drug
Development Department (DITEP) of Gustave Roussy Cancer Center in
France. Professor Marabelle brings deep insight in tumor-specific
Treg depletion for anti-CTLA-4 therapies delivered intratumorally
to overcome dose dependent toxicities through systemic delivery of
anti-CTLA-4 therapies.
FINANCIAL HIGHLIGHTS
Cash and Cash Equivalents:Cash
and cash equivalents were US$128.8 million as of June 30, 2023,
compared to US$143.8 million as of December 31, 2022.
Total borrowings from commercial banks in China
(denominated in RMB) decreased to US$24.9 million as of June 30,
2023 from US$27.8 million as of December 31, 2022. The associated
loan proceeds were primarily used to pay for the company’s R&D
activities in China, including CMC costs of clinical and
preclinical programs.
Net Revenue:Net revenue was
US$17.3 million for the six months ended June 30, 2023, compared to
US$3.9 million for the same period in 2022. The increase of
approximately 341% reflects net revenue recognized upon fulfillment
of certain performance obligations associated with the
collaboration and technology licensing agreements with Sanofi and
Exelixis, respectively. Net revenue also included a milestone
payment of US$3.0 million from Exelixis received in June 2023.
Research and Development (R&D)
Expenses: R&D expenses were US$21.3 million for the
six months ended June 30, 2023, compared to US$45.1 million for the
same period in 2022. The decrease of approximately 53% in R&D
expenses reflects a reduction in preclinical spending and winding
down of the ADG106 clinical program, offset by investment in the
anti-CTLA-4 franchise. The Company prioritized its high value
clinical projects and implemented a series of cost control
measures, including a reduction in personnel.
Administrative
Expenses:Administrative expenses were US$4.5 million for
the six months ended June 30, 2023, compared to US$6.8 million for
the same period in 2022. The decrease was due to reduction in both
personnel and office related expenses as a result of cost-control
measures.
Other Operating income,
Net:Other operating income, net was US$3.4 million for the
six months ended June 30, 2023. Other operating income, net
included a one-time compensation payment from a contract
manufacturer in relation to company losses for a
preclinical-related outsourcing arrangement.
Net Loss:Net loss attributable
to Adagene Inc.’s shareholders was US$4.1 million for the six
months ended June 30, 2023, compared to US$47.6 million for the
same period in 2022.
Ordinary Shares Outstanding:As
of June 30, 2023, there were 54,793,339 ordinary shares issued and
outstanding. Each American depository share, or ADS, represents one
and one quarter (1.25) ordinary shares of the company.
Non-GAAP Net LossNon-GAAP net
loss, which is defined as net loss attributable to ordinary
shareholders for the period after excluding share-based
compensation expenses, was US$0.1 million for the six months ended
June 30, 2023, compared to US$41.9 million for the same period in
2022. Please refer to the section in this press release titled
“Reconciliation of GAAP and Non-GAAP Results” for details.
Non-GAAP Financial MeasuresThe
company uses non-GAAP net loss and non-GAAP net loss per ordinary
shares for the period, which are non-GAAP financial measures, in
evaluating its operating results and for financial and operational
decision-making purposes. The company believes that non-GAAP net
loss and non-GAAP net loss per ordinary shares for the period help
identify underlying trends in the company’s business that could
otherwise be distorted by the effect of certain expenses that the
company includes in its loss for the period. The company believes
that non-GAAP net loss and non-GAAP net loss per ordinary shares
for the period provide useful information about its results of
operations, enhances the overall understanding of its past
performance and future prospects and allows for greater visibility
with respect to key metrics used by its management in its financial
and operational decision-making.
Non-GAAP net loss and non-GAAP net loss per ordinary shares for
the period should not be considered in isolation or construed as an
alternative to operating profit, loss for the period or any other
measure of performance or as an indicator of its operating
performance. Investors are encouraged to review non-GAAP net loss
and non-GAAP net loss per ordinary shares for the period and the
reconciliation to their most directly comparable GAAP measures.
Non-GAAP net loss and non-GAAP net loss per ordinary shares for the
period here may not be comparable to similarly titled measures
presented by other companies. Other companies may calculate
similarly titled measures differently, limiting their usefulness as
comparative measures to the company’s data. The company encourages
investors and others to review its financial information in its
entirety and not rely on a single financial measure.
Non-GAAP net loss and non-GAAP net loss per ordinary shares for
the period represent net loss attributable to ordinary shareholders
for the period excluding share-based compensation expenses.
Share-based compensation expense is a non-cash expense arising from
the grant of stock-based awards to employees. The company believes
that the exclusion of share-based compensation expenses from the
net loss in the Reconciliation of GAAP and Non-GAAP Results assists
management and investors in making meaningful period-to-period
comparisons in the company's operating performance or peer group
comparisons because (i) the amount of share-based compensation
expenses in any specific period may not directly correlate to the
company’s underlying performance, (ii) such expenses can vary
significantly between periods as a result of the timing of grants
of new stock-based awards, and (iii) other companies may use
different forms of employee compensation or different valuation
methodologies for their share-based compensation.
Please see the “Reconciliation of GAAP and Non-GAAP Results”
included in this press release for a full reconciliation of
non-GAAP net loss and non-GAAP net loss per ordinary shares for the
period to net loss attributable to ordinary shareholders for the
period.
About AdageneAdagene Inc. (Nasdaq:
ADAG) is a platform-driven, clinical-stage biotechnology company
committed to transforming the discovery and development of novel
antibody-based cancer immunotherapies. Adagene combines
computational biology and artificial intelligence to design novel
antibodies that address unmet patient needs. Powered by its
proprietary Dynamic Precision Library (DPL) platform,
composed of NEObody™, SAFEbody®, and POWERbody™ technologies,
Adagene’s highly differentiated pipeline features novel
immunotherapy programs. Adagene has forged strategic
collaborations with reputable global partners that leverage its
technology in multiple approaches at the vanguard of science.
For more information, please
visit: https://investor.adagene.com.
Follow Adagene on WeChat, LinkedIn and Twitter.
SAFEbody® is a registered trademark in the United
States, China, Australia, Japan, Singapore, and
the European Union.
Safe Harbor Statement
This press release contains forward-looking
statements, including statements regarding the potential
implications of clinical data for patients, and Adagene’s
advancement of, and anticipated preclinical activities, clinical
development, regulatory milestones, and commercialization of its
product candidates. Actual results may differ materially from those
indicated in the forward-looking statements as a result of various
important factors, including but not limited to Adagene’s ability
to demonstrate the safety and efficacy of its drug candidates; the
clinical results for its drug candidates, which may not support
further development or regulatory approval; the content and timing
of decisions made by the relevant regulatory authorities regarding
regulatory approval of Adagene’s drug candidates; Adagene’s ability
to achieve commercial success for its drug candidates, if approved;
Adagene’s ability to obtain and maintain protection of intellectual
property for its technology and drugs; Adagene’s reliance on third
parties to conduct drug development, manufacturing and other
services; Adagene’s limited operating history and Adagene’s ability
to obtain additional funding for operations and to complete the
development and commercialization of its drug candidates; Adagene’s
ability to enter into additional collaboration agreements beyond
its existing strategic partnerships or collaborations, and the
impact of the COVID-19 pandemic on Adagene’s clinical development,
commercial and other operations, as well as those risks more fully
discussed in the “Risk Factors” section in Adagene’s annual report
for the year of 2022 on Form 20-F filed with the U.S. Securities
and Exchange Commission. All forward-looking statements are based
on information currently available to Adagene, and Adagene
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by law.
FINANCIAL TABLES FOLLOW
Unaudited Consolidated Balance Sheets
|
|
|
|
December 31,2022 |
|
June 30,2023 |
|
US$ |
|
US$ |
ASSETS |
|
|
Current
assets: |
|
|
Cash and cash equivalents |
143,758,678 |
|
|
128,759,962 |
|
Amounts due from related parties |
619,432 |
|
|
393,969 |
|
Prepayments and other current assets |
4,937,323 |
|
|
3,524,688 |
|
Total current
assets |
149,315,433 |
|
|
132,678,619 |
|
Property, equipment and software, net |
2,782,963 |
|
|
2,222,200 |
|
Operating lease right-of-use assets |
191,877 |
|
|
292,523 |
|
Other non-current assets |
109,572 |
|
|
108,922 |
|
TOTAL
ASSETS |
152,399,845 |
|
|
135,302,264 |
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
Current
liabilities: |
|
|
Accounts payable |
3,666,124 |
|
|
4,483,776 |
|
Contract liabilities |
15,107,276 |
|
|
812,916 |
|
Amounts due to related parties |
19,323,337 |
|
|
17,216,032 |
|
Accruals and other current liabilities |
3,212,809 |
|
|
2,834,565 |
|
Income tax payable |
— |
|
|
1,895,063 |
|
Short-term borrowings |
10,768,745 |
|
|
8,995,544 |
|
Current portion of long-term borrowings |
2,850,128 |
|
|
2,594,868 |
|
Current portion of operating lease liabilities |
151,983 |
|
|
158,859 |
|
Total current
liabilities |
55,080,402 |
|
|
38,991,623 |
|
Long-term borrowings |
14,146,541 |
|
|
13,348,003 |
|
Operating lease liabilities |
53,834 |
|
|
141,431 |
|
Other non-current liabilities |
28,718 |
|
|
27,679 |
|
TOTAL
LIABILITIES |
69,309,495 |
|
|
52,508,736 |
|
Commitments and
contingencies |
|
|
Shareholders’
equity: |
|
|
Ordinary shares (par value of US$0.0001 per share; 640,000,000
shares authorized, and 54,278,981 shares issued and outstanding as
of December 31, 2022; and 640,000,000 shares authorized, and
54,793,339 shares issued and outstanding as of June 30, 2023) |
5,497 |
|
|
5,556 |
|
Treasury shares (1 share as of December 31, 2022 and June 30,
2023) |
(4 |
) |
|
(4 |
) |
Additional paid-in capital |
342,739,268 |
|
|
346,958,523 |
|
Accumulated other comprehensive income (loss) |
(849,305 |
) |
|
(1,256,635 |
) |
Accumulated deficit |
(258,805,106 |
) |
|
(262,913,912 |
) |
Total shareholders’
equity |
83,090,350 |
|
|
82,793,528 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
152,399,845 |
|
|
135,302,264 |
|
|
|
|
|
|
|
Unaudited Consolidated Statements of
Comprehensive Loss
|
For the Six MonthsEnded June 30, 2022 |
|
For the Six MonthsEnded June 30, 2023 |
|
US$ |
|
US$ |
Revenues |
|
|
Licensing and collaboration revenue |
3,923,174 |
|
|
17,295,745 |
|
Expenses |
|
|
Research and development expenses |
(45,148,357 |
) |
|
(21,289,434 |
) |
Administrative expenses |
(6,848,925 |
) |
|
(4,470,520 |
) |
Total
expenses |
(51,997,282 |
) |
|
(25,759,954 |
) |
Other operating income, net |
— |
|
|
3,415,230 |
|
Loss from
operations |
(48,074,108 |
) |
|
(5,048,979 |
) |
Interest income |
14,931 |
|
|
1,918,971 |
|
Interest expense |
(211,434 |
) |
|
(573,507 |
) |
Other income, net |
430,671 |
|
|
287,430 |
|
Foreign exchange gain (loss), net |
756,085 |
|
|
1,620,415 |
|
Loss before income
tax |
(47,083,855 |
) |
|
(1,795,670 |
) |
Income tax expense |
(558,944 |
) |
|
(2,313,136 |
) |
Net loss attributable
to Adagene Inc.’s shareholders |
(47,642,799 |
) |
|
(4,108,806 |
) |
Other comprehensive
income (loss) |
|
|
Foreign currency translation adjustments, net of nil tax |
284,148 |
|
|
(407,330 |
) |
Total comprehensive
loss attributable to Adagene Inc.’s shareholders |
(47,358,651 |
) |
|
(4,516,136 |
) |
Net loss attributable
to Adagene Inc.’s shareholders |
(47,642,799 |
) |
|
(4,108,806 |
) |
Net loss attributable
to ordinary shareholders |
(47,642,799 |
) |
|
(4,108,806 |
) |
Weighted average
number of ordinary shares used in per share
calculation: |
|
|
—Basic |
54,533,161 |
|
|
54,604,787 |
|
—Diluted |
54,533,161 |
|
|
54,604,787 |
|
Net loss per ordinary
share |
|
|
—Basic |
(0.87 |
) |
|
(0.08 |
) |
—Diluted |
(0.87 |
) |
|
(0.08 |
) |
|
|
|
|
|
|
Reconciliation of GAAP and Non-GAAP
Results
|
For the Six Months Ended June 30, 2022 |
|
For the Six Months Ended June 30, 2023 |
|
US$ |
US$ |
GAAP net loss attributable to ordinary
shareholders |
(47,642,799 |
) |
|
(4,108,806 |
) |
Add back: |
|
|
Share-based compensation expenses |
5,725,868 |
|
|
4,030,214 |
|
Non-GAAP net
loss |
(41,916,931 |
) |
|
(78,592 |
) |
Weighted average number of
ordinary shares used in per share calculation: |
|
|
—Basic |
54,533,161 |
|
|
54,604,787 |
|
—Diluted |
54,533,161 |
|
|
54,604,787 |
|
Non-GAAP net loss per
ordinary share |
|
|
—Basic |
(0.77 |
) |
|
(0.00 |
) |
—Diluted |
(0.77 |
) |
|
(0.00 |
) |
Investor & Media Contact:
Ami Knoefler
650-739-9952
ir@adagene.com
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