– 2022 clinical data readouts on track to show potential best-in-class safety profile for anti-CTLA-4 programs (ADG116, ADG126) with PD-1 for proven and new indications, thereby enabling greater efficacy through higher and more frequent dosing –
– Advanced three wholly-owned clinical programs both in single agent and combination trials –
– Advanced five IND-enabling programs, including two on track for IND or equivalent filing in 2022 –
– Established Sanofi technology licensing collaboration with potential value over US$2.5 billion, endorsing both SAFEbody® platform and pipeline, while advancing collaboration with Exelixis –
– Strong cash position and efficient operations support expected milestones –
SAN DIEGO and SUZHOU, China, March 31, 2022 (GLOBE NEWSWIRE) — Adagene Inc. (“Adagene”) (Nasdaq: ADAG), a company transforming the discovery and development of novel antibody-based therapies, today reported financial results for the full-year ended December 31, 2021, and provided corporate updates.
“We are committed to delivering on our promise to transform cancer immunotherapy, concentrating on overcoming the known safety issues linked to promising yet challenging targets,” said Peter Luo, Ph.D., Co-founder, Chief Executive Officer and Chairman of Adagene. “On the clinical front, we are focused on revitalizing anti-CTLA-4 as a safe and efficacious backbone therapy, which remains a huge market opportunity and the only checkpoint inhibitor approved as both monotherapy and combination therapy with anti-PD-1. We are developing potential best-in-class molecules to unleash the full potential of this target for strong Treg depletion in the tumor microenvironment (TME) and superior safety profiles.”
Dr. Luo continued, “We are also leveraging our SAFEbody technology to overcome challenges of bispecific T-cell engagers (TCEs), particularly for solid tumors, and to address safety issues of widely expressed targets like CD47. We have made wonderful progress to de-risk our clinical pipeline, grow our transformative preclinical assets, and validate our AI-powered, scalable antibody technology platform with global partnerships. With a solid cash position, we are well-positioned to achieve our expected milestones while continuing to enhance value of our pipeline.”
PIPELINE GROWTH & HIGHLIGHTS
During 2021, Adagene advanced its wholly-owned, differentiated pipeline of antibody-based therapeutics, including three clinical programs in single and combination phase 1b/2 trials, five programs in IND-enabling studies and over 50 more across stages of discovery.
Clinical candidates include multiple modalities of antibody therapeutics against established targets such as CTLA-4 with ADG116 (NEObody™) and ADG126 (SAFEbody), challenging targets such as CD137 with ADG106 (NEObody) and ADG206 (the masked anti-CD137 POWERbody™), and targets with known safety issues such as CD47 with ADG153 (SAFEbody). The company’s expanding preclinical portfolio further applies the company’s AI-powered technology platform to create transformative antibody-based therapeutics across targets with different MOAs.
A summary of pipeline progress and recent corporate highlights is below:
ADG116: This NEObody program, targeting a unique epitope of CTLA-4, is being evaluated in patients with advanced/metastatic solid tumors. ADG116 is designed to provide an enhanced efficacy profile by potent Treg depletion in the TME and to maintain its physiological function by soft ligand blocking to address safety concerns associated with existing CTLA-4 therapeutics.
ADG126: This SAFEbody program applies precision masking technology to ADG116 for conditional activation in the TME to expand the therapeutic index and to further address safety concerns with existing CTLA-4 therapies. ADG126 is designed to provide enhanced safety and efficacy profiles due to the combination of the potent Treg depletion in the TME and soft ligand blocking.
Preclinical Discovery Programs: The company continues to expand its preclinical pipeline by applying its three-body technology platforms – NEObody, SAFEbody and POWERbody – across modalities. New POWERbody candidates are designed to unleash the efficacy of a therapeutic through Fc-engineering, drug conjugation, or T-cell engagement, while securing safety by precision masking with SAFEbody technology. Thus, POWERbody candidates incorporate SAFEbody precision masking technology.
Collaborations:
Corporate Updates:
EXPECTED 2022 MILESTONES & OUTLOOK
Adagene has previously provided its outlook for 2022, including planned advancement of both its clinical product candidates and preclinical portfolio. The company recently achieved its goal to complete a major collaboration following the Sanofi licensing agreement, and it continues to work towards strategic development collaborations for its pipeline. Additional milestones and expected progress during 2022 include:
FULL-YEAR 2021 FINANCIAL HIGHLIGHTS
Cash and Cash Equivalents:
Cash and cash equivalents were US$174.4 million as of December 31, 2021, compared to US$75.2 million as of December 31, 2020. The increase was mainly due to net proceeds of US$145.9 million from the company’s Initial Public Offering in February 2021. Further, the year-end 2021 cash balance does not include the US$3 million milestone payment from Exelixis received in January 2022, or the expected US$17.5 million upfront payment from Sanofi for the recently announced technology licensing collaboration.
Net Revenue:
Net revenue in 2021 was US$10.2 million compared to US$0.7 million in 2020. The increase was due to recognition of US$8.5 million from the collaboration and technology license agreement with Exelixis and a payment of US$1.2 million from Dragon Boat Biopharmaceuticals, a subsidiary of Sanjin, related to the companies’ collaboration to develop antibody-based therapies. Due to the Exelixis collaboration, contract liabilities were US$5.5 million as of December 31, 2021, compared to US$0.7 million as of December 31, 2020.
Research and Development (R&D) Expenses:
R&D expenses were US$68.1 million for the year ended December 31, 2021, compared to US$33.5 million for the same period in 2020. The increase in R&D was primarily due to an increase in personnel, including non-cash share-based compensation of US$13.6 million, and greater preclinical testing, clinical activities and CMC activities (provided by related parties and third parties) associated with the company’s three clinical candidates and five preclinical programs in the IND-enabling phase.
General and Administrative (G&A) Expenses:
G&A expenses were US$14.4 million for the year ended December 31, 2021, compared to US$10.3 million for the same period in 2020. The increase was primarily due to an increase in personnel, professional fees and office-related expenses.
Net Loss:
The Company reported a net loss of US$73.2 million and US$42.4 million for the full year ended December 31, 2021, and 2020, or (US$1.46) and (US$2.67) per ordinary share on diluted basis, respectively. The 2021 net loss was higher largely due to increases in clinical, operating and CMC activities.
Non-GAAP Net Loss:
Non-GAAP net loss, which is defined as net loss attributable to ordinary shareholders for the period after excluding (i) share-based compensation expenses and (ii) accretion of convertible redeemable preferred shares to redemption value. The Non-GAAP net loss was US$54.5 million for the year ended December 31, 2021, compared to US$32.3 million for the same period in 2020. Please refer to the section in this press release titled “Reconciliation of GAAP and Non-GAAP Results” for details.
Non-GAAP Financial Measures
The Company uses non-GAAP net loss and non-GAAP net loss per ordinary shares for the year, 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 year 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 year. The Company believes that non-GAAP net loss and non-GAAP net loss per ordinary shares for the year 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 year should not be considered in isolation or construed as an alternative to operating profit, loss for the year 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 year and the reconciliation to their most directly comparable GAAP measures. Non-GAAP net loss and non-GAAP net loss per ordinary shares for the year 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 year represent net loss attributable to ordinary shareholders for the year excluding (i) share-based compensation expenses, and (ii) accretion of convertible redeemable preferred shares to redemption value. 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 year to net loss attributable to ordinary shareholders for the year/period.
About Adagene
Adagene Inc. (Nasdaq: ADAG) is a platform-driven, clinical-stage biopharmaceutical 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 filings 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.
Investor & Media Contact:
Ami Knoefler
Adagene
650-739-9952
ir@adagene.com
FINANCIAL TABLES FOLLOW
Consolidated Balance Sheets
December 31, 2020 (audited) |
December 31, 2021 (unaudited) |
||||
US$ |
US$ | ||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | 75,150,998 | 174,391,243 | |||
Accounts receivable, net | — | 3,000,000 | |||
Amounts due from related parties | 132,396 | 4,506,670 | |||
Prepayments and other current assets | 3,813,984 | 4,055,921 | |||
Total current assets | 79,097,378 | 185,953,834 | |||
Property, equipment and software, net | 2,067,125 | 3,487,617 | |||
Other non-current assets | 3,098,234 | 69,275 | |||
TOTAL ASSETS | 84,262,737 | 189,510,726 | |||
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT | |||||
Current liabilities: | |||||
Accounts payable | 1,809,975 | 3,321,615 | |||
Contract liabilities | 725,536 | 5,500,000 | |||
Amounts due to related parties | 2,535,358 | 10,466,061 | |||
Accruals and other current liabilities | 6,059,497 | 4,379,243 | |||
Income tax payable | — | 1,657,450 | |||
Short-term borrowings | 3,831,476 | 3,121,226 | |||
Current portion of long-term borrowings | 1,183,926 | 1,376,319 | |||
Total current liabilities | 16,145,768 | 29,821,914 | |||
Long-term borrowings | 2,965,563 | 2,991,829 | |||
Deferred tax liabilities | — | 44,163 | |||
Other non-current liabilities | 91,955 | 94,107 | |||
TOTAL LIABILITIES | 19,203,286 | 32,952,013 | |||
Commitments and contingencies | |||||
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT (CONTINUED) | |||||
Mezzanine equity: | |||||
Series A-1 convertible redeemable preferred shares | 5,473,957 | — | |||
Series A-2 convertible redeemable preferred shares | 3,000,000 | — | |||
Series B convertible redeemable preferred shares | 27,999,995 | — | |||
Series C-1 convertible redeemable preferred shares | 48,975,456 | — | |||
Series C-2 convertible redeemable preferred shares | 18,999,999 | — | |||
Series C-3 convertible redeemable preferred shares | 50,000,000 | — | |||
Total mezzanine equity | 154,449,407 | — | |||
Shareholders’ deficit: | |||||
Ordinary shares | 1,889 | 5,627 | |||
Treasury shares | — | (619,605 | ) | ||
Subscriptions receivable from shareholders | (7,172,192 | ) | — | ||
Additional paid-in capital | 23,786,652 | 336,099,931 | |||
Accumulated other comprehensive income (loss) | (350,981 | ) | (93,981 | ) | |
Accumulated deficit | (105,655,324 | ) | (178,833,259 | ) | |
Total shareholders’ equity (deficit) | (89,389,956 | ) | 156,558,713 | ||
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY (DEFICIT) | 84,262,737 | 189,510,726 |
Consolidated Statements of Comprehensive Loss
For the Year Ended December 31, 2020 (audited) |
For the Year Ended December 31, 2021 (unaudited) |
||||
US$ |
US$ |
||||
Revenues | |||||
Licensing and collaboration revenue | 700,913 | 10,175,258 | |||
Expenses | |||||
Research and development expenses | (33,538,035 | ) | (68,099,385 | ) | |
Third parties | (23,645,740 | ) | (55,020,367 | ) | |
Related parties | (9,892,295 | ) | (13,079,018 | ) | |
Administrative expenses | (10,314,536 | ) | (14,439,962 | ) | |
Loss from operations | (43,151,658 | ) | (72,364,089 | ) | |
Interest income | 629,288 | 76,166 | |||
Interest expense | (202,165 | ) | (363,762 | ) | |
Other income, net | 971,949 | 1,778,822 | |||
Foreign exchange gain (loss), net | (644,693 | ) | (603,459 | ) | |
Loss before income tax | (42,397,279 | ) | (71,476,322 | ) | |
Income tax expense | — | (1,701,613 | ) | ||
Net loss attributable to Adagene Inc.’s shareholders | (42,397,279 | ) | (73,177,935 | ) | |
Other comprehensive income (loss) | |||||
Foreign currency translation adjustments, net of nil tax | (6,087 | ) | 257,000 | ||
Total comprehensive loss attributable to Adagene Inc.’s shareholders | (42,403,366 | ) | (72,920,935 | ) | |
Net loss attributable to Adagene Inc.’s shareholders | (42,397,279 | ) | (73,177,935 | ) | |
Accretion of convertible redeemable preferred shares to redemption value | (248,113 | ) | (28,553 | ) | |
Net loss attributable to ordinary shareholders | (42,645,392 | ) | (73,206,488 | ) | |
Weighted average number of ordinary shares used in per share calculation: | |||||
—Basic | 15,950,698 | 50,032,009 | |||
—Diluted | 15,950,698 | 50,032,009 | |||
Net loss per ordinary share | |||||
—Basic | (2.67 | ) | (1.46 | ) | |
—Diluted | (2.67 | ) | (1.46 | ) |
Reconciliation of GAAP and Non-GAAP Results
For the Year Ended December 31, 2020 |
For the Year Ended December 31, 2021 |
||||
US$ | US$ | ||||
GAAP net loss attributable to ordinary shareholders | (42,645,392 | ) | (73,206,488 | ) | |
Add back: | |||||
Share-based compensation expenses | 10,129,541 | 18,679,658 | |||
Accretion of convertible redeemable preferred shares to redemption value | 248,113 | 28,553 | |||
Non-GAAP net loss | (32,267,738 | ) | (54,498,277 | ) | |
Weighted average number of ordinary shares used in per share calculation: | |||||
—Basic | 15,950,698 | 50,032,009 | |||
—Diluted | 15,950,698 | 50,032,009 | |||
Non-GAAP net loss per ordinary share | |||||
—Basic | (2.02 | ) | (1.09 | ) | |
—Diluted | (2.02 | ) | (1.09 | ) |
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