Adagene (ADAG) AI Stock Analysis

• Market Cap: $82.95M
• Dividend Yield: N/A
• Average Volume (3M): 94.20K
• 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: 110,564
• 30 Day Avg. Volume: 94,199
• 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: 328.49% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 40 Underperform
• Price Target: $1.50 ▼(-16.20% Downside)

Adagene's overall stock score is primarily impacted by its poor financial performance and unfavorable valuation metrics. Technical analysis indicates bearish momentum, further contributing to a low score. The absence of earnings call data and corporate events leaves these areas unaddressed.

Positive Factors

Strategic Partnerships

Aligning with the FDA on trial designs enhances Adagene's regulatory pathway, potentially accelerating drug development and approval.

Clinical Advancements

Positive trial results with KEYTRUDA® suggest potential efficacy, supporting future product development and marketability.

Financial Backing

The investment from Sanofi extends Adagene's cash runway into 2027, providing financial stability for ongoing R&D efforts.

Negative Factors

Revenue Decline

A significant revenue decline indicates challenges in product commercialization and market penetration, impacting long-term growth.

Profitability Issues

Severe profitability issues highlight operational inefficiencies and the need for cost management to achieve sustainable growth.

Negative Cash Flow

Negative cash flow reflects difficulties in generating sufficient cash from operations, affecting liquidity and investment capacity.

Adagene Business Overview & Revenue Model

Company Description

Adagene Inc. is a biopharmaceutical company focused on developing innovative antibody-based therapies for the treatment of cancer. The company specializes in its proprietary technology platform, which allows for the creation of next-generation monoclonal antibodies that are designed to improve efficacy and safety in targeting various cancer types. Adagene's core products include a pipeline of antibodies that are in various stages of clinical development, aimed at addressing unmet medical needs in oncology.

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: 1.79
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 1.79 is below the 20-day moving average (MA) of 1.91, below the 50-day MA of 2.06, and below the 200-day MA of 1.88, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 39.97 is Neutral, neither overbought nor oversold. The STOCH value of 33.46 is Neutral, 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	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
CLNN	49 Neutral	$80.26M	―	―	―	-35.29%	45.18%
IFRX	44 Neutral	$85.26M	-1.16	―	―	―	―
IMA	41 Neutral	$84.31M	―	-23.76%	―	-100.00%	55.32%
ADAG	40 Underperform	$82.95M	―	-63.41%	―	-87.59%	11.53%
ANEB	35 Underperform	$112.98M	―	-109.69%	―	―	15.82%
QNCX	31 Underperform	$97.76M	―	-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.