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 full year 2022 and provided corporate
updates.
“We are investing in R&D activities to
strengthen the differentiation and impact of our anti-CTLA-4
franchise, while generating non-dilutive funding through
collaborations,” said Peter Luo, Ph.D., Co-Founder, Chief Executive
Officer and Chairman of the Board of Adagene. “Through
CTLA-4-mediated intra-tumoral Treg depletion, we are addressing the
dose-dependent toxicities of anti-CTLA-4 therapies, thereby
unleashing their power as a cornerstone of cancer immunotherapy
across a broad spectrum of tumors. We expect continued momentum
with both existing and prospective partners to validate our
SAFEbody technology and pipeline programs.”
PIPELINE & BUSINESS
HIGHLIGHTS
Anti-CTLA-4 Programs
- Phase 1b/2 data for ADG116, an unmasked anti-CTLA-4
NEObody™ targeting a unique epitope showed a differentiated safety
profile and anti-tumor activity, both in monotherapy and in
combination with anti-PD-1:
- In monotherapy studies of 50
patients with advanced/metastatic tumors, ADG116 was administered
up to 15 mg/kg every three weeks with repeat dosing.
- No Grade 3 or higher
treatment-related adverse events (TRAEs) were reported at the 15
mg/kg dose level, while Grade 3 or higher TRAEs at 10 mg/kg (13%)
were lower than the reported rate (36%) for a currently approved
anti-CTLA-4 therapy, ipilimumab, at 10 mg/kg in first-line
monotherapy in melanoma patients in a non-head-to-head
comparison.
- ADG116 monotherapy in heavily
pre-treated patients with difficult-to-treat tumors resulted in two
partial responses in Kaposi’s sarcoma and renal cell carcinoma. In
February 2023, a third partial response with monotherapy was
reported in a patient with MSI-H endometrial cancer. The patient
had received five cycles of ADG116 at 10 mg/kg with only Grade 1
TRAEs reported.
- ADG116 in combination with
anti-PD-1 therapies also demonstrated a differentiated safety
profile and anti-tumor activity at 3 mg/kg with repeat dosing.
Results were presented at the Society for Immunotherapy of
Cancer’s (SITC) annual meeting, including one confirmed,
durable complete response observed after six cycles in a patient
with platinum-refractory recurrent head and neck squamous cell
carcinoma who remains on therapy (n=5; ORR = 20%; DCR =
100%). Additionally, a significant reduction in a
tumor-related biomarker (carcinoembryonic antigen levels) was
observed in two patients with metastatic microsatellite-stable
(MSS) colorectal cancer (CRC); both patients had either liver or
lung metastases.
- Combination dose expansion of
ADG116 in combination with anti-PD-1 is ongoing for dose
optimization.
- 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:
- In dose escalation, ADG126 monotherapy was well tolerated with
no dose-limiting toxicities or Grade 3 or higher TRAEs observed
when administered up to 20 mg/kg every three weeks with repeat
dosing in 26 patients with advanced/metastatic solid tumors.
- Clinical evaluation with anti-PD-1 therapies is ongoing with
interim data from dose escalation portions of phase 1b/2 trials in
combination with toripalimab and pembrolizumab to be presented at
the upcoming American Association for Cancer Research annual
meeting April 14 – 18, 2023 in Orlando, Florida.
- Interim results announced in January 2023 from ongoing phase
1b/2 trials of ADG126 in combination with anti-PD-1 therapy
include:
- No dose-limiting toxicities observed when ADG126 combined up to
10 mg/kg with repeat cycles, highlighting the potential of SAFEbody
anti-CTLA-4 therapy. SAFEbody ADG126 provides systemic delivery of
CTLA-4 treatment similar to intra-tumoral delivery to reach a
higher concentration at the tumor site, enabling
concentration-dependent, intra-tumoral Treg depletion for effective
immunotherapy.
- Multiple partial responses were confirmed in several tumor
types during combination dose escalation.
- Continuous tumor shrinkage in cold tumors and anti-PD-1
resistant patients.
- Efficacy results consistent with data for parental antibody
(ADG116) in warm and cold tumors due to its strong intra-tumoral
depletion of regulatory T cells in the tumor microenvironment
(TME).
- Dose expansion for ADG126 in combination with anti-PD-1 is
ongoing with multiple dosing regimens being evaluated, in alignment
with the Food & Drug Administration’s Project Optimus for dose
optimization of cancer drugs.
Additional Clinical & Preclinical
Programs
- Initiated dosing of the
first patient in a phase 1 trial evaluating safety, efficacy and
tolerability profiles for ADG206, a masked, IgG1
FC-enhanced anti-CD137 POWERbody™
in patients with advanced/metastatic tumors. This next
generation anti-CD137 candidate is the first POWERbody candidate to
advance into clinic, combining precision masking, Fc-engineering
and targeting of a unique epitope to solve the safety and efficacy
challenges of anti-CD137 therapies.
- Continued
investigator-initiated trials (IITs) for ADG106, an anti-CD137
agonist NEObody, in selected combination settings,
including advanced non-small cell lung cancer (NSCLC) and
early-stage, HER2-negative breast cancer.
- Presented best-in-class
profiles for multiple preclinical product candidates in
IND-enabling studies, including ADG153
(anti-CD47 IgG1 SAFEbody) and
ADG138 (HER2xCD3
POWERbody), which apply SAFEbody precision masking
technology. The robust preclinical profiles for these and
other product candidates are published here.
- Proprietary bispecific
T-cell engager (TCE) capability with CD28 designed to mitigate the
serious safety concerns of CD28 activation. CD28
bispecific POWERbody TCEs in preclinical evaluation exhibit
enormous potential to fulfill the promise of safe and durable T
cell-mediated synergistic immunotherapies when combined with CD3
bispecific TCEs and/or checkpoint inhibitors. The full poster
presentation may be viewed here.
Collaborations
- Roche: Established
a clinical trial collaboration in December 2022 where Roche will
sponsor and conduct a randomized phase 1b/2 multi-national trial to
evaluate the efficacy, safety and pharmacokinetic profiles of
ADG126 in a triple combination with bevacizumab and atezolizumab,
versus the approved combination of atezolizumab and bevacizumab
alone in first-line hepatocellular carcinoma (HCC). Each company is
supplying its respective anti-cancer agent(s) to support the trial,
which will be initially conducted in 60 patients. The trial
reflects Roche’s leadership and commitment to HCC, where they
pioneered the established standard-of-care doublet combination, and
validates Adagene’s differentiated ADG126 anti-CTLA-4 clinical
program. Adagene will retain global development and
commercialization rights to ADG126.
- Sanofi:
Established a technology licensing agreement with Sanofi in March
2022 to generate masked versions of antibodies provided by Sanofi,
including monoclonal and bispecific candidate antibodies, with a
potential transaction value of US$2.5 billion. The collaboration
included an upfront payment of US$17.5 million received in April
2022 for the initial two programs (US$8.75 million per program), an
option fee for two additional programs, potential milestone
payments of up to US$2.5 billion (US$625 million per program), and
tiered royalties.
- Exelixis:
Received a US$3.0 million milestone payment from Exelixis in
January 2022 for the successful nomination of lead SAFEbody
candidates for one of the collaboration programs and an additional
$1.1 million upfront payment for an expanded collaboration in
SAFEbody discovery in June 2022, based on a technology licensing
agreement to develop novel masked antibody-drug conjugate
candidates. Terms of the agreement, which was executed in February
2021, include an upfront payment of US$11 million for two programs,
potential milestones and tiered royalties.
- China: Advanced
global partnerships and collaboration with Sanjin and Dragon Boat
Biopharmaceutical for two antibodies out-licensed in Greater China,
including an anti-PD-L1 (ADG104) in phase 2 and a novel anti-CSF-1R
(ADG125/BC006) in phase 1 development.
CORPORATE UPDATES
-
In March 2023, appointed Professor Aurélien Marabelle, MD, PhD, to
the company’s Scientific and Strategic Advisory Board. 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 intra-tumorally to overcome dose
dependent toxicities through systemic delivery of anti-CTLA-4
therapies.
-
In November 2022, appointed Cuong Do, MBA, to the company’s board
of directors as an independent director. He also serves as an audit
committee member and will be chairing a strategy committee of the
board. Mr. Do is President and CEO of BioVie Inc., a clinical-stage
company developing innovative drug therapies. He was previously the
Chief Strategy Officer for Merck, a leading global pharmaceuticals
company, where he played a key role in defining the company’s
strategy, including the focus on oncology and creating its leading
position with the anti-PD-1 therapy, pembrolizumab.
UPDATED MILESTONES & OUTLOOK
Following initiatives to streamline its
operations over the past year, Adagene expects its cash
balance to sufficiently fund activities into 2025, with the
following milestones during 2023:
-
Establish registration path and strategy (e.g., recommended phase 2
dose, indication and design) for phase 2/3 pivotal trial of
anti-CTLA-4 in combination with anti-PD-1 therapy in targeted
tumors
- ADG126 phase 2
proof-of-concept data from combination dose expansion cohorts
- Advance ADG116 phase
2 combination dose expansion cohorts
-
Providing the path to a potential registrational trial for triple
combination with Roche’s atezolizumab/bevacizumab, advance ADG126
randomized phase 1b/2 trial in first-line hepatocellular carcinoma
(HCC) conducted by Roche; provide update on trial status.
-
Advance ADG206 phase 1 trial (masked, FC enhanced, IgG1 anti-CD137)
and advance IND-enabling programs as resources allow.
-
Additional collaborations and/or technology licensing
agreements.
FINANCIAL HIGHLIGHTS
Cash and Cash Equivalents:Cash
and cash equivalents were US$143.8 million as of December 31, 2022,
compared to US$174.4 million as of December 31, 2021. The 2022 cash
balance includes an upfront payment of US$17.5 million for the
first two projects from Sanofi, and a milestone payment of US$3.0
million and an additional upfront payment of US$1.1 million from
Exelixis.
Total non-dilutive funding received from
business development collaborations increased to US$21.9 million
for the year ended December 31, 2022 from US$11.9 million for the
year ended December 31, 2021. Total borrowings (denominated in RMB)
from commercial banks in China increased to US$27.8 million as of
December 31, 2022 from US$7.5 million as of December 31, 2021. 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$9.3 million for the year ended December 31, 2022, compared to
US$10.2 million in 2021. Net revenue was recognized due to
fulfillment of performance obligations over time associated with
the collaboration and technology licensing agreement with Sanofi to
develop antibody-based therapies. Revenue was also recognized from
the material transfer and option agreement with ADC Therapeutics SA
as performance obligation was satisfied at a point in time.
Research and Development (R&D)
Expenses: R&D expenses were US$81.3 million for the
year ended December 31, 2022, compared to US$68.1 million in 2021.
The rise in R&D expenses was primarily due to increased R&D
activities for the company’s clinical programs and preclinical
testing for candidates in the IND-enabling phase.
Administrative
Expenses:Administrative expenses were US$11.9 million for
the year ended December 31, 2022, compared to US$14.4 million in
2021. The decrease was primarily due to a reduction in share-based
compensation expenses.
Net Loss:The net loss
attributable to Adagene Inc.’s shareholders was US$80.0 million for
the year ended December 31, 2022, compared to US$73.2 million for
the year ended December 31, 2021.
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, as applicable, was US$69.5
million for the year ended December 31, 2022, compared to US$54.5
million for the year ended December 31, 2021. 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 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 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 2021 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 31,2021 |
December 31,2022 |
|
US$ |
US$ |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash
equivalents |
174,391,243 |
|
143,758,678 |
|
Accounts receivable,
net |
3,000,000 |
|
— |
|
Amounts due from related
parties |
4,506,670 |
|
619,432 |
|
Prepayments and other current
assets |
4,055,921 |
|
4,937,323 |
|
Total current
assets |
185,953,834 |
|
149,315,433 |
|
Property, equipment and software,
net |
3,487,617 |
|
2,782,963 |
|
Operating lease right-of-use
assets |
— |
|
191,877 |
|
Other non-current
assets |
69,275 |
|
109,572 |
|
TOTAL
ASSETS |
189,510,726 |
|
152,399,845 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
Current liabilities: |
|
|
Accounts
payable |
3,321,615 |
|
3,666,124 |
|
Contract
liabilities |
5,500,000 |
|
15,107,276 |
|
Amounts due to related
parties |
10,466,061 |
|
19,323,337 |
|
Accruals and other current
liabilities |
4,379,243 |
|
3,212,809 |
|
Income tax
payable |
1,657,450 |
|
— |
|
Short-term
borrowings |
3,121,226 |
|
10,768,745 |
|
Current portion of long-term
borrowings |
1,376,319 |
|
2,850,128 |
|
Current portion of operating lease
liabilities |
— |
|
151,983 |
|
Total current
liabilities |
29,821,914 |
|
55,080,402 |
|
Long-term
borrowings |
2,991,829 |
|
14,146,541 |
|
Operating lease
liabilities |
— |
|
53,834 |
|
Deferred tax
liabilities |
44,163 |
|
— |
|
Other non-current
liabilities |
94,107 |
|
28,718 |
|
TOTAL
LIABILITIES |
32,952,013 |
|
69,309,495 |
|
Commitments and
contingencies |
|
|
Shareholders’ equity: |
|
|
Ordinary
shares |
5,627 |
|
5,497 |
|
Treasury
shares |
(619,605 |
) |
(4 |
) |
Additional paid-in
capital |
336,099,931 |
|
342,739,268 |
|
Accumulated other comprehensive income
(loss) |
(93,981 |
) |
(849,305 |
) |
Accumulated
deficit |
(178,833,259 |
) |
(258,805,106 |
) |
Total shareholders’
equity |
156,558,713 |
|
83,090,350 |
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
189,510,726 |
|
152,399,845 |
|
Unaudited Consolidated Statements of
Comprehensive Loss
|
For the Year Ended December 31, 2021 |
For the Year Ended December 31, 2022 |
|
US$ |
US$ |
Revenues |
|
|
Licensing and collaboration
revenue |
10,175,258 |
|
9,292,724 |
|
Expenses |
|
|
Research and development
expenses |
(68,099,385 |
) |
(81,339,540 |
) |
Third parties |
(55,020,367 |
) |
(46,212,077 |
) |
Related
parties |
(13,079,018 |
) |
(35,127,463 |
) |
Administrative
expenses |
(14,439,962 |
) |
(11,873,867 |
) |
Loss from
operations |
(72,364,089 |
) |
(83,920,683 |
) |
Interest
income |
76,166 |
|
377,501 |
|
Interest
expense |
(363,762 |
) |
(693,323 |
) |
Other income,
net |
1,778,822 |
|
2,168,388 |
|
Foreign exchange gain (loss),
net |
(603,459 |
) |
2,555,325 |
|
Loss before income
tax |
(71,476,322 |
) |
(79,512,792 |
) |
Income tax
expense |
(1,701,613 |
) |
(459,055 |
) |
Net loss attributable to Adagene Inc.’s
shareholders |
(73,177,935 |
) |
(79,971,847 |
) |
Other comprehensive income (loss) |
|
|
Foreign currency translation adjustments, net of nil
tax |
257,000 |
|
(755,324 |
) |
Total comprehensive loss attributable to
Adagene Inc.’s
shareholders |
(72,920,935 |
) |
(80,727,171 |
) |
Net loss attributable to Adagene Inc.’s
shareholders |
(73,177,935 |
) |
(79,971,847 |
) |
Accretion of convertible redeemable preferred shares to redemption
value |
(28,553 |
) |
— |
|
Net loss attributable to ordinary
shareholders |
(73,206,488 |
) |
(79,971,847 |
) |
Weighted average number of ordinary shares used in per
share calculation: |
|
|
—Basic |
50,032,009 |
|
54,135,084 |
|
—Diluted |
50,032,009 |
|
54,135,084 |
|
Net loss per ordinary share |
|
|
—Basic |
(1.46 |
) |
(1.48 |
) |
—Diluted |
(1.46 |
) |
(1.48 |
) |
Reconciliation of GAAP and Non-GAAP
Results
|
For the Year Ended December 31, 2021 |
For the Year Ended December 31, 2022 |
|
US$ |
US$ |
GAAP net loss attributable to ordinary
shareholders |
(73,206,488 |
) |
(79,971,847 |
) |
Add
back: |
|
|
Share-based compensation
expenses |
18,679,658 |
|
10,520,282 |
|
Accretion of convertible redeemable preferred shares to redemption
value |
28,553 |
|
— |
|
Non-GAAP net
loss |
(54,498,277 |
) |
(69,451,565 |
) |
Weighted average number of ordinary shares used in per share
calculation: |
|
|
—Basic |
50,032,009 |
|
54,135,084 |
|
—Diluted |
50,032,009 |
|
54,135,084 |
|
Non-GAAP net loss per ordinary share |
|
|
—Basic |
(1.09 |
) |
(1.28 |
) |
—Diluted |
(1.09 |
) |
(1.28 |
) |
Investor & Media Contact:
Ami Knoefler
650-739-9952
ir@adagene.com
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