Adagene (ADAG) AI Stock Analysis

• Market Cap: $90.92M
• Dividend Yield: N/A
• Average Volume (3M): 56.58K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.59
• Revenue Growth: -99.43%
• EPS Growth: -69.40%
• Country: US
• Employees: 138
• Sector: Healthcare
• Sector Strength: 53
• Industry: Biotechnology
• EPS (TTM): -0.29
• Shares Outstanding: 47,109,554
• 10 Day Avg. Volume: 125,747
• 30 Day Avg. Volume: 56,579
• PEG Ratio: -0.66
• Price to Book (P/B): 0.69
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -1.16
• Enterprise Value/Market Cap: -0.64
• Enterprise Value/Revenue: -2.05
• Enterprise Value/Gross Profit: 70.96
• Enterprise Value/Ebitda: 0.45
• 1Y Price Target: $8.00
• Price Target Upside: 316.67% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 49 Neutral
• Price Target: $2.00 ▲(4.17%Upside)

Adagene's overall stock score is significantly impacted by its poor financial performance, which remains the most critical factor. While technical analysis suggests some positive momentum, the lack of profitability and negative valuation metrics weigh heavily on the overall score. Investors should be cautious due to these financial challenges.

Positive Factors

Clinical Development

Adagene remains focused on advancing ADG126 in clinical development and expects to report its durability data on efficacy as well as a regulatory update.

Efficacy and Safety

The 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.

Therapeutic Potential

Positive data from the ongoing Phase 1/2 study with ADG126 presented at the American Society of Clinical Oncology Gastrointestinal Cancers Symposium solidifies its therapeutic potential in metastatic microsatellite stable colorectal cancer.

Negative Factors

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 Concerns

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

Treatment Challenges

Analyst notes that the target population for the treatment is relatively small and there are challenges with diagnosing peritoneal metastasis, which further complicate the treatment paradigm.

Adagene Business Overview & Revenue Model

Company Description

Adagene (ADAG) is a biotechnology company that operates in the immunotherapy sector, focusing on the discovery and development of novel antibody-based therapies for the treatment of cancer. The company leverages its proprietary Dynamic Precision Library (DPL) technology platform to design and optimize antibodies with enhanced therapeutic efficacy and safety profiles. Adagene's core products include a pipeline of monoclonal and bispecific antibodies aimed at addressing unmet medical needs in oncology.

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 faces significant financial challenges with declining revenue, substantial losses, and negative cash flows. The company has a very low net profit margin and negative operating cash flow, indicating severe profitability issues. Despite a manageable debt level, the reduction in equity poses additional risks.

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
-823.04K	18.11M	9.29M	10.18M	480.00K
	EBIT
-35.95M	-23.72M	-83.92M	-72.36M	-19.17M
	EBITDA
-31.66M	-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: Positive
• Last Price: 1.92
• 50DMA: Positive
• 100DMA: Positive
• 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 Positive. The current price of 1.92 is above the 20-day moving average (MA) of 1.89, above the 50-day MA of 1.69, and below the 200-day MA of 2.07, indicating a neutral trend. The MACD of 0.07 indicates Positive momentum. The RSI at 54.17 is Neutral, neither overbought nor oversold. The STOCH value of 54.91 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
Sector *	54 Neutral	$5.34B	3.36	-45.10%	3.39%	16.81%	-0.03%
AVTX	50 Neutral	$49.92M	―	678.24%	―	-69.59%	―
ADAG	49 Neutral	$90.92M	―	-55.14%	―	-99.43%	-69.40%
CRBU	46 Neutral	$104.17M	―	-52.76%	―	-70.31%	-11.68%
IGMS	40 Neutral	$73.34M	―	-245.59%	―	27.36%	23.82%
ADVM	40 Underperform	$51.60M	―	-127.99%	―	―	37.54%
TNYA	36 Underperform	$101.23M	―	-76.21%	―	―	23.55%