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Adagene Inc.

Adagene Inc.ADAG财报

Nasdaq · 医疗保健 · 药物制剂

Adagene Inc. is a global clinical-stage biotechnology company specializing in the research, development, and commercialization of innovative antibody-based cancer immunotherapies. Leveraging its proprietary next-generation antibody technology platforms, it develops targeted oncology treatments for patients across global markets, with core R&D bases in China and clinical programs covering North America, Asia, and Europe.

What changed in Adagene Inc.'s 20-F — 2024 vs 2025

Top changes in Adagene Inc.'s 2025 20-F

478 paragraphs added · 437 removed · 375 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

89 edited+21 added−15 removed972 unchanged
If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information.
If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information.
We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful.
We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful.
The success of our product candidates, including ADG126, ADG206 and others, will depend on several factors, including: ● successful enrollment in, and completion of, preclinical studies and clinical trials; ● receipt of regulatory approvals from the FDA, NMPA and other comparable regulatory authorities for our product candidates; ● establishing commercial manufacturing capabilities, either by building facilities ourselves or making arrangements with third-party manufacturers that meet the FDA Good Manufacturing Requirements as well as NMPA requirements for manufacturing; ● relying on third parties to conduct our clinical trials safely and efficiently; ● obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity; ● protecting our rights in our intellectual property; ● ensuring we do not infringe, misappropriate or otherwise violate the patent, trade secret or other intellectual property rights of third parties; ● launching commercial sales of our product candidates, if and when approved; ● competition with other product candidates and drugs; and ● continued acceptable safety profile for our product candidates following final regulatory approval, if and when received.
The success of our product candidates, including ADG126 and others, will depend on several factors, including: ● successful enrollment in, and completion of, preclinical studies and clinical trials; ● receipt of regulatory approvals from the FDA, NMPA and other comparable regulatory authorities for our product candidates; ● establishing commercial manufacturing capabilities, either by building facilities ourselves or making arrangements with third-party manufacturers that meet the FDA Good Manufacturing Requirements as well as NMPA requirements for manufacturing; ● relying on third parties to conduct our clinical trials safely and efficiently; ● obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity; ● protecting our rights in our intellectual property; ● ensuring we do not infringe, misappropriate or otherwise violate the patent, trade secret or other intellectual property rights of third parties; ● launching commercial sales of our product candidates, if and when approved; ● competition with other product candidates and drugs; and ● continued acceptable safety profile for our product candidates following final regulatory approval, if and when received.
Moreover, international business relationships subject us to additional risks that may materially adversely affect our ability to attain or sustain profitable operations, including: ● efforts to enter into collaboration or licensing arrangements with third parties in connection with our international sales, marketing and distribution efforts may increase our expenses or divert our management’s attention from the acquisition or development of product candidates; ● changes in a specific country’s or region’s political and cultural climate or economic condition; ● differing regulatory requirements for drug approvals and marketing internationally; ● difficulty of effective enforcement of contractual provisions in local jurisdictions; ● potentially reduced protection for intellectual property rights; ● potential third-party patent rights; ● unexpected changes in tariffs, trade barriers and regulatory requirements; ● economic weakness, including inflation or political instability; ● compliance with tax, employment, immigration and labor laws for employees traveling abroad; ● the effects of applicable tax structures and potentially adverse tax consequences; ● currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incidental to doing business in another country; ● workforce uncertainty and labor unrest and failure to comply with the applicable laws and regulations in relation to management of the employment of foreigners within the PRC; ● the potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices, opts to import goods from an international market with low or lower prices rather than buying them locally; ● failure of our employees and contracted third parties to comply with Office of Foreign Assets Control rules and regulations and the Foreign Corrupt Practices Act of the United States, and other applicable rules and regulations; ● production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and 52 Table of Contents ● business interruptions resulting from geo-political actions, including war and terrorism, or natural disasters, including earthquakes, volcanoes, typhoons, floods, hurricanes and fires.
Moreover, international business relationships subject us to additional risks that may materially adversely affect our ability to attain or sustain profitable operations, including: ● efforts to enter into collaboration or licensing arrangements with third parties in connection with our international sales, marketing and distribution efforts may increase our expenses or divert our management’s attention from the acquisition or development of product candidates; ● changes in a specific country’s or region’s political and cultural climate or economic condition; ● differing regulatory requirements for drug approvals and marketing internationally; ● difficulty of effective enforcement of contractual provisions in local jurisdictions; ● potentially reduced protection for intellectual property rights; ● potential third-party patent rights; ● unexpected changes in tariffs, trade barriers and regulatory requirements; ● economic weakness, including inflation or political instability; ● compliance with tax, employment, immigration and labor laws for employees traveling abroad; ● the effects of applicable tax structures and potentially adverse tax consequences; ● currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incidental to doing business in another country; ● workforce uncertainty and labor unrest and failure to comply with the applicable laws and regulations in relation to management of the employment of foreigners within the PRC; ● the potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices, opts to import goods from an international market with low or lower prices rather than buying them locally; ● failure of our employees and contracted third parties to comply with Office of Foreign Assets Control rules and regulations and the Foreign Corrupt Practices Act of the United States, and other applicable rules and regulations; ● production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and ● business interruptions resulting from geo-political actions, including war and terrorism, or natural disasters, including earthquakes, volcanoes, typhoons, floods, hurricanes and fires.
Our business and the ability to generate revenue related to product sales, if ever, will depend on the successful development, regulatory approval and commercialization of our antibody product candidates for the treatment of patients with cancer, particularly our lead product candidate ADG126, which is still in clinical stage.
Our business and the ability to generate revenue related to product sales, if ever, will depend on the successful development, regulatory approval and commercialization of our antibody product candidates for the treatment of patients with cancer, particularly our lead product candidate ADG126 (muzastotug), which is still in clinical stage.
On August 16, 2022, President Biden signed into law the Inflation Reduction Act that includes a provision that is intended to lower certain prescription drug costs under Medicare. The law permits the Medicare program to negotiate Medicare payments for a limited number of drugs.
On August 16, 2022, the former President Biden signed into law the Inflation Reduction Act that includes a provision that is intended to lower certain prescription drug costs under Medicare. The law permits the Medicare program to negotiate Medicare payments for a limited number of drugs.
Even if ADG126, ADG206 or one of our other proprietary product candidates obtains regulatory approval, we may determine that commercializing such product candidate ourselves would not be the most effective way to create value for our shareholders or holders of ADSs.
Even if ADG126 or one of our other proprietary product candidates obtains regulatory approval, we may determine that commercializing such product candidate ourselves would not be the most effective way to create value for our shareholders or holders of ADSs.
We may not realize the anticipated benefits of any such transaction or arrangement. 53 Table of Contents Furthermore, partners, collaborators, or other parties to such transactions or arrangements may fail to fully perform their obligations or meet our expectations or cooperate with us satisfactorily for various reasons and subject us to potential risks, including the following: ● partners, collaborators, or other parties have significant discretion in determining the efforts and resources that they will apply to a transaction or arrangement; ● partners, collaborators, or other parties could independently develop, or develop with third parties, services and products that compete directly or indirectly with our product candidates; ● partners, collaborators, or other parties may stop, delay or discontinue clinical trials as well as repeat clinical trials or conduct new clinical trials by using our intellectual property or proprietary information; ● partners, collaborators, or other parties may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liabilities; ● disputes may arise between us and partners, collaborators, or other parties that cause the delay or termination of the research, development or commercialization of our product candidates, or that result in costly litigation or arbitration that diverts management’s attention and resources; ● partners, collaborators, or other parties may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable services and products; and ● partners, collaborators, or other parties may own or co-own intellectual properties covering our product candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual properties.
Furthermore, partners, collaborators, or other parties to such transactions or arrangements may fail to fully perform their obligations or meet our expectations or cooperate with us satisfactorily for various reasons and subject us to potential risks, including the following: ● partners, collaborators, or other parties have significant discretion in determining the efforts and resources that they will apply to a transaction or arrangement; 53 Table of Contents ● partners, collaborators, or other parties could independently develop, or develop with third parties, services and products that compete directly or indirectly with our product candidates; ● partners, collaborators, or other parties may stop, delay or discontinue clinical trials as well as repeat clinical trials or conduct new clinical trials by using our intellectual property or proprietary information; ● partners, collaborators, or other parties may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liabilities; ● disputes may arise between us and partners, collaborators, or other parties that cause the delay or termination of the research, development or commercialization of our product candidates, or that result in costly litigation or arbitration that diverts management’s attention and resources; ● partners, collaborators, or other parties may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable services and products; and ● partners, collaborators, or other parties may own or co-own intellectual properties covering our product candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual properties.
These investors and our founder, Peter Luo, also have certain rights, such as board representation right and registration right that our other shareholders do not have. 29 Table of Contents For instance, our current effective memorandum and articles of association provides that JSR Limited shall have the right to designate, appoint, remove and replace and reappoint one director so long it holds at least five percent of the shares outstanding on a fully-diluted basis and an as-converted basis, although JSR Limited currently does not have representation at our board; as long as Wuxi Pharmatech Healthcare Fund I L.P., which is controlled by the ultimate controlling party of our sole supplier, holds at least five percent of the shares outstanding on a fully-diluted basis, it shall have the right to nominate one independent non-executive director and such one director shall be appointed and agreed by the board; as long as Peter Luo holds or beneficially owns any shares or is employed by us or any of our subsidiaries, he will serve as one of our directors and the Chairman of the Board of Directors; in addition, during the period commencing upon February 2021 and ending on the earlier of (i) the date upon which Peter Luo beneficially owns less than five percent of the shares outstanding on a fully diluted basis, (ii) the death or legal determination of Peter Luo’s incapacity or (iii) the termination of Peter Luo as an executive officer or principal scientific advisor to us or any of our subsidiaries or for cause (as determined under his related employment or consulting arrangements and subject to all related cure provisions), Peter Luo shall have the right to designate, appoint, remove and replace and reappoint one additional director; and as long as General Atlantic Singapore AI Pte.
These investors and our founder, Peter Luo, also have certain rights, such as board representation right and registration right that our other shareholders do not have. 29 Table of Contents For instance, our current effective memorandum and articles of association provides that JSR Limited shall have the right to designate, appoint, remove and replace and reappoint one director so long it holds at least five percent of the shares outstanding on a fully-diluted basis and an as-converted basis, although JSR Limited currently does not have representation at our board; as long as Wuxi Pharmatech Healthcare Fund I L.P., which is controlled by the ultimate controlling party of our sole supplier, holds at least five percent of the shares outstanding on a fully-diluted basis, it shall have the right to nominate one independent non-executive director and such one director shall be appointed and agreed by the board; as long as Peter Luo holds or beneficially owns any shares or is employed by us or any of our subsidiaries, he will serve as one of our directors and the Chairman of the Board of Directors; in addition, during the period commencing upon February 2021 and ending on the earlier of (i) the date upon which Peter Luo beneficially owns less than five percent of the shares outstanding on a fully diluted basis, (ii) the death or legal determination of Peter Luo’s incapacity or (iii) the termination of Peter Luo as an executive officer or principal scientific advisor to us or any of our subsidiaries or for cause (as determined under his related employment or consulting arrangements and subject to all related cure provisions), Peter Luo shall have the right to designate, appoint, remove and replace and reappoint one additional director.
For details, see page 74 of this annual report; 8 Table of Contents ● We were likely a passive foreign investment company, or PFIC, for 2024, and there is a significant risk that we will be a PFIC for 2025 and possibly subsequent taxable years, in which case U.S. investors will generally be subject to adverse U.S. federal income tax consequences.
For details, see page 74 of this annual report; and 8 Table of Contents ● We were likely a passive foreign investment company, or PFIC, for 2025, and there is a significant risk that we will be a PFIC for 2026 and possibly subsequent taxable years, in which case U.S. investors will generally be subject to adverse U.S. federal income tax consequences.
We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons, including: ● severity of the disease under investigation; 35 Table of Contents ● the size and nature of the patient population; ● the patient eligibility criteria defined in the protocol; ● the size of the study population required for analysis of the trial’s primary endpoints; ● perceived risks and benefits of our pipeline products; ● our resources to facilitate timely enrollment in clinical trials; ● patient referral practices of physicians; ● the proximity of patients to trial sites; ● th e design of the trial; ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● our ability to obtain and maintain patients’ consent; and ● the risk that patients enrolled in clinical trials will not complete a clinical trial.
We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons, including: ● severity of the disease under investigation; ● the size and nature of the patient population; ● the patient eligibility criteria defined in the protocol; ● the size of the study population required for analysis of the trial’s primary endpoints; ● perceived risks and benefits of our pipeline products; ● our resources to facilitate timely enrollment in clinical trials; ● patient referral practices of physicians; ● the proximity of patients to trial sites; ● th e design of the trial; ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● our ability to obtain and maintain patients’ consent; and ● the risk that patients enrolled in clinical trials will not complete a clinical trial.
We did not receive any of our revenues in Renminbi in cash in the years ended December 31, 2022, 2023 and 2024. Under our current corporate structure, our Cayman Islands holding company primarily relies on proceeds from previous equity financing activities to fund any cash and financing requirements we may have.
We did not receive any of our revenues in Renminbi in cash in the years ended December 31, 2023, 2024 and 2025. Under our current corporate structure, our Cayman Islands holding company primarily relies on proceeds from previous equity financing activities to fund any cash and financing requirements we may have.
Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the National Intellectual Property Administration of China, or NIPA, or the applicable foreign counterpart, or made a misleading statement, during prosecution.
Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the China National Intellectual Property Administration, or CNIPA, or the applicable foreign counterpart, or made a misleading statement, during prosecution.
Our failure to comply with these regulations may require us to repeat or suspend clinical trials, which would delay the regulatory approval process. 54 Table of Contents Further, these investigators and CROs are not our employees and we will not be able to control, other than by contract, the amount of resources, including time, which they devote to our product candidates and clinical trials.
Our failure to comply with these regulations may require us to repeat or suspend clinical trials, which would delay the regulatory approval process. Further, these investigators and CROs are not our employees and we will not be able to control, other than by contract, the amount of resources, including time, which they devote to our product candidates and clinical trials.
Furthermore, our shareholders whose jurisdictions of residence have tax treaties or arrangements with China may not qualify for, or able to obtain in practice, the benefits under these tax treaties or arrangements. 19 Table of Contents The biopharmaceutical industry in China is highly regulated and such regulations are subject to changes which may affect approval and commercialization of our product candidates.
Furthermore, our shareholders whose jurisdictions of residence have tax treaties or arrangements with China may not qualify for, or able to obtain in practice, the benefits under these tax treaties or arrangements. The biopharmaceutical industry in China is highly regulated and such regulations are subject to changes which may affect approval and commercialization of our product candidates.
Periodic maintenance fees, renewal fees, annuity fees, and various other governmental fees on patents and/or applications will be due to be paid to the NIPA and various other governmental patent agencies outside of China in several stages over the lifetime of the patents and/or applications.
Periodic maintenance fees, renewal fees, annuity fees, and various other governmental fees on patents and/or applications will be due to be paid to the CNIPA and various other governmental patent agencies outside of China in several stages over the lifetime of the patents and/or applications.
The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change. We are currently aware of various existing therapies and development candidates that may compete with our wholly owned clinical candidates as they engage similar targets, such as agents targeting CTLA-4 and CD137, and bispecifics targeting both.
The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change. We are currently aware of various existing therapies and development candidates that may compete with our wholly owned clinical candidates as they engage similar targets, such as agents targeting CTLA-4 and CD137, and bispecifics targeting CTLA-4 and PD-1.
Results of our trials could reveal a high and unacceptable severity or prevalence of adverse events. We may seek Orphan Drug Designation for some of our product candidates, and we may be unsuccessful. Regulatory authorities in some jurisdictions, including the United States, may designate drugs for relatively small patient populations as orphan drugs.
Results of our trials could reveal a high and unacceptable severity or prevalence of adverse events. 40 Table of Contents We may seek Orphan Drug Designation for some of our product candidates, and we may be unsuccessful. Regulatory authorities in some jurisdictions, including the United States, may designate drugs for relatively small patient populations as orphan drugs.
The NIPA, and various foreign governmental patent agencies including the USPTO, JPO, and EPO require compliance with a number of procedural, documentary, fee payment and other provisions during the patent application and prosecution process.
The CNIPA, and various foreign governmental patent agencies including the USPTO, JPO, and EPO require compliance with a number of procedural, documentary, fee payment and other provisions during the patent application and prosecution process.
For details, see page 31 of this annual report; and ● We depend substantially on the success of our product candidates, particularly our lead product candidate, ADG126, which is in phase 1b/2 clinical development, and our ability to advance and identify additional product candidates. Clinical trials of our product candidates may not be successful.
For details, see page 31 of this annual report; and ● We depend substantially on the success of our product candidates, particularly our lead product candidate, ADG126 (muzastotug), which is in phase 1b/2 and phase 2 clinical studies, and our ability to advance and identify additional product candidates. Clinical trials of our product candidates may not be successful.
Any loans to our wholly foreign-owned subsidiary in China, which are treated as foreign-invested enterprises under PRC law, are subject to foreign exchange loan registrations. In addition, a foreign-invested enterprise, or FIE, shall use its capital pursuant to the principle of authenticity and self-use within its business scope.
Any loans to our wholly foreign-owned subsidiary in China, which are treated as foreign-invested enterprises under PRC law, are subject to foreign debt registrations. In addition, a foreign-invested enterprise, or FIE, shall use its capital pursuant to the principle of authenticity and self-use within its business scope.
Changes in pricing regulation could restrict the amount that we are able to charge for our future approved drugs, which would adversely affect our revenue, profitability and results of operations. 51 Table of Contents We intend to seek approval to market our product candidates in the United States, China and in other jurisdictions.
Changes in pricing regulation could restrict the amount that we are able to charge for our future approved drugs, which would adversely affect our revenue, profitability and results of operations. We intend to seek approval to market our product candidates in the United States, China and in other jurisdictions.
In addition, the use of third-party service providers may require us to disclose our proprietary information to these parties, which could increase the risk that this information will be misappropriated. Our CROs have the right to terminate their agreements with us in the event of an uncured material breach.
In addition, the use of third-party service providers may require us to disclose our proprietary information to these parties, which could increase the risk that this information will be misappropriated. 54 Table of Contents Our CROs have the right to terminate their agreements with us in the event of an uncured material breach.
In February 2025, the CAC promulgated the Measures for the Management of Compliance Audits on Personal Information Protection, which will come into effect in May 2025, stipulating that personal information processors handling the personal information of more than 10 million individuals should conduct a compliance audit on personal information protection at least once every two years.
In February 2025, the CAC promulgated the Measures for the Management of Compliance Audits on Personal Information Protection, which came into effect in May 2025, stipulating that personal information processors handling the personal information of more than 10 million individuals should conduct a compliance audit on personal information protection at least once every two years.
Our management conducted an evaluation of the effectiveness of our internal control over financial reporting and concluded that our internal control over financial reporting was effective as of December 31, 2024. For details, see “Item 15.
Our management conducted an evaluation of the effectiveness of our internal control over financial reporting and concluded that our internal control over financial reporting was effective as of December 31, 2025. For details, see “Item 15.
We were likely a passive foreign investment company, or PFIC, for 2024, if the value of our goodwill is determined by reference to the average of our quarterly market capitalization, and there is a significant risk that we will be a PFIC for 2025 and possibly subsequent taxable years, in which case U.S. investors will generally be subject to adverse U.S. federal income tax consequences.
We were likely a passive foreign investment company, or PFIC, for 2025 and certain prior taxable years, if the value of our goodwill is determined by reference to the average of our quarterly market capitalization, and there is a significant risk that we will be a PFIC for 2026 and possibly subsequent taxable years, in which case U.S. investors will generally be subject to adverse U.S. federal income tax consequences.
The Measures for the Management of Compliance Audits on Personal Information Protection, which will come into effect in May 2025, stipulating that personal information processors handling the personal information of more than 10 million individuals should conduct a compliance audit on personal information protection at least once every two years.
The Measures for the Management of Compliance Audits on Personal Information Protection, which came into effect in May 2025, stipulating that personal information processors handling the personal information of more than 10 million individuals should conduct a compliance audit on personal information protection at least once every two years.
We depend substantially on the success of our product candidates, particularly our lead product candidate, ADG126, which is in phase 1b/2 clinical development, and our ability to advance and identify additional product candidates. Clinical trials of our product candidates may not be successful.
We depend substantially on the success of our product candidates, particularly our lead product candidate, ADG126 (muzastotug), which is in phase 1b/2 and phase 2 clinical studies, and our ability to advance and identify additional product candidates. Clinical trials of our product candidates may not be successful.
We will need to grow our organization, and we may experience difficulties in managing this growth, which could disrupt our operations. As of December 31, 2024, we had 138 full-time employees. As our development and commercialization plans and strategies develop, we expect to expand our employee base for managerial, operational, financial and other resources.
We will need to grow our organization, and we may experience difficulties in managing this growth, which could disrupt our operations. As of December 31, 2025, we had 128 full-time employees. As our development and commercialization plans and strategies develop, we expect to expand our employee base for managerial, operational, financial and other resources.
These and other risks may materially adversely affect our ability to attain or sustain revenue from international markets. Building our commercialization capabilities will require significant investment of time and money.
These and other risks may materially adversely affect our ability to attain or sustain revenue from international markets. 52 Table of Contents Building our commercialization capabilities will require significant investment of time and money.
Such regulation requires, among other things, the MOFCOM be notified in advance or its approval be obtained in certain situations, such as any change-of-control transaction in which a foreign investor acquires control of a PRC domestic enterprise of Undertakings, issued by the State Council in 2008 and amended in 2018, were triggered.
Such regulation requires, among other things, the MOFCOM be notified in advance or its approval be obtained in certain situations, such as any change-of-control transaction in which a foreign investor acquires control of a PRC domestic enterprise and the filing thresholds for concentration of undertakings are triggered, issued by the State Council in 2008 and amended in 2018, were triggered.
Our product candidates could fail to receive regulatory approval from the FDA, NMPA or a comparable regulatory authority for many reasons, including: ● disagreement with the design or implementation of our clinical trials; ● failure to demonstrate that a product candidate is safe and effective or safe, pure, and potent for its proposed indication; ● failure of clinical trial results to meet the level of statistical significance required for approval; ● failure to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; ● disagreement with our interpretation of data from preclinical trials or clinical trials; ● the insufficiency of data collected from clinical trials of our product candidates to support the submission and filing of a BLA or other submission or to obtain regulatory approval; ● the FDA, NMPA or comparable regulatory authority’s finding of deficiencies related to the manufacturing processes; ● failure of our product candidates to ensure compliance with current Good Manufacturing Practice, or cGMP, following inspections during the regulatory review process or across the production cycle of our product; and ● changes in approval policies, guidances or regulations that render our preclinical and clinical data insufficient for approval. 37 Table of Contents The FDA and other regulatory authorities have substantial discretion in the approval process, and determining when or whether regulatory approval will be obtained for any of our product candidates.
Our product candidates could fail to receive regulatory approval from the FDA, NMPA or a comparable regulatory authority for many reasons, including: ● disagreement with the design or implementation of our clinical trials; ● failure to demonstrate that a product candidate is safe and effective or safe, pure, and potent for its proposed indication; ● failure of clinical trial results to meet the level of statistical significance required for approval; ● failure to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; ● disagreement with our interpretation of data from preclinical trials or clinical trials; ● the insufficiency of data collected from clinical trials of our product candidates to support the submission and filing of a BLA or other submission or to obtain regulatory approval; 37 Table of Contents ● the FDA, NMPA or comparable regulatory authority’s finding of deficiencies related to the manufacturing processes; ● failure of our product candidates to ensure compliance with current Good Manufacturing Practice, or cGMP, following inspections during the regulatory review process or across the production cycle of our product; and ● changes in approval policies, guidances or regulations that render our preclinical and clinical data insufficient for approval.
Although we believe that we have conducted our patent prosecution in accordance with all applicable duty of candor and in good faith, the outcome following legal assertions of invalidity and unenforceability during patent litigation is unpredictable.
Although we believe that we have conducted our patent prosecution in accordance with all applicable disclosure obligations and in good faith, the outcome following legal assertions of invalidity and unenforceability during patent litigation is unpredictable.
While we have generated revenues from licensing and collaboration deals, we have not generated any revenue from commercial product sales to date, and we have had significant operating losses since our inception. For the years ended December 31, 2022, 2023 and 2024, we incurred net losses of US$80.0 million, US$18.9 million and US$33.4 million, respectively.
While we have generated revenues from licensing and collaboration deals, we have not generated any revenue from commercial product sales to date, and we have had significant operating losses since our inception. For the years ended December 31, 2023, 2024 and 2025, we incurred net losses of US$18.9 million, US$33.4 million and US$17.6 million, respectively.
Other potential consequences include, among other things: ● restrictions on the marketing or manufacturing of our drugs, withdrawal of the product from the market, or voluntary or mandatory product recalls; ● fines, untitled or warning letters, or holds on clinical trials; ● refusal by the FDA, NMPA or comparable regulatory authorities to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals; ● product seizure or detention, or refusal to permit the import or export of our product candidates; and ● injunctions or the imposition of civil or criminal penalties. 42 Table of Contents The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market.
Other potential consequences include, among other things: ● restrictions on the marketing or manufacturing of our drugs, withdrawal of the product from the market, or voluntary or mandatory product recalls; ● fines, untitled or warning letters, or holds on clinical trials; ● refusal by the FDA, NMPA or comparable regulatory authorities to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals; 42 Table of Contents ● product seizure or detention, or refusal to permit the import or export of our product candidates; and ● injunctions or the imposition of civil or criminal penalties.
For example, according to the Patent Law of the PRC which was latest amended in June 2021, in order to make up the time taken up by review and approval for marketing of new drugs, the patent administrative department under the State Council shall, at the request of the relevant patentee, make up the patent right duration for invention patents pertaining to new drugs that obtain the marketing authorization in China.
For example, according to the Patent Law of the PRC which was latest amended in 2020 and effective in June 2021, in order to make up the time taken up by review and approval for marketing of new drugs, the patent administrative department under the State Council shall, at the request of the relevant patentee, grant patent term compensation for invention patents pertaining to new drugs that obtain the marketing authorization in China.
We may in the future make loans or provide guarantee to our PRC subsidiary subject to the approval or registration from governmental authorities and limitation of amount, or we may make additional capital contributions to our wholly foreign-owned subsidiary in China.
We may in the future make loans or provide guarantee to our PRC subsidiary subject to the applicable registration procedures and regulatory limits from governmental authorities and limitation of amount, or we may make additional capital contributions to our wholly foreign-owned subsidiary in China.
For details, see page 81 of this annual report. ​ Risks Related to Doing Business in the PRC Uncertainties with respect to the PRC legal system, including uncertainties regarding the enforcement of laws, and sudden or unexpected changes in policies, laws and regulations in China could adversely affect us.
For details, see page 80 of this annual report. Risks Related to Doing Business in the PRC Uncertainties with respect to the PRC legal system, including uncertainties regarding the enforcement of laws, and sudden or unexpected changes in policies, laws and regulations in China could adversely affect us. Our operations in China are governed by the PRC laws and regulations.
A total of 2,994,000 of our ordinary shares was authorized for issuance with respect to awards granted under the 2021 Plan. As of February 28, 2025, the aggregate number of our ordinary shares underlying our outstanding awards under the 2019 Plan was 1,922,960.
A total of 2,994,000 of our ordinary shares was authorized for issuance with respect to awards granted under the 2021 Plan. As of February 28, 2026, the aggregate number of our ordinary shares underlying our outstanding awards under the 2019 Plan was 1,529,460.
In China, the Ministry of Human Resources and Social Security of China or provincial or local human resources and social security authorities, together with other government authorities, review the inclusion or removal of drugs from China’s National Drug Catalog for Basic Medical Insurance, Work-related Injury Insurance and Maternity Insurance, or the National Reimbursement Drug List, or the NRDL, or provincial or local medical insurance catalogues for the National Medical Insurance Program regularly, and the tier under which a drug will be classified, both of which affect the amounts reimbursable to program participants for their purchases of those drugs.
In China, the National Healthcare Security Administration or provincial or local healthcare security authorities and human resources and social security authorities, together with other government authorities, review the inclusion or removal of drugs from the National Reimbursement Drug List, or the NRDL, or provincial or local medical insurance catalogues for the National Medical Insurance Program regularly, and the tier under which a drug will be classified, both of which affect the amounts reimbursable to program participants for their purchases of those drugs.
Due to the volatility of our market capitalization, there is a significant risk that we will also be a PFIC for 2025 and possibly future taxable years. In addition, the extent to which our goodwill and other intangible assets should be characterized as a non-passive asset is not entirely clear.
For similar reasons, there is a significant risk that we will also be a PFIC for 2026 and possibly future taxable years. In addition, the extent to which our goodwill and other intangible assets should be characterized as a non-passive asset is not entirely clear.
Following issuance of the Draft Overseas Listing Regulations, on February 17, 2023, the CSRC issued the Notice on Filing Arrangements for Overseas Securities Offering and Listing by Domestic Companies (the “CSRC Filing Notice”), stating that the CSRC has published the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”) and supporting guidelines (the “Listing Guidelines”), collectively the Trial Measures and Listing Guidelines, which came into effect on March 31, 2023. 16 Table of Contents The Trial Measures provide that an overseas listing or offering securities (which, for the purposes of the Trial Measures, are defined thereunder as equity shares, depository receipts, corporate bonds convertible to equity shares, and other equity securities that are offered and listed overseas, either directly or indirectly, by PRC domestic companies) is explicitly prohibited under any of the following circumstances: (i) such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state rules of the PRC; (ii) the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) the domestic company, its controlling shareholder(s) or the actual controller have committed relevant crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (iv) the domestic company is currently under investigations for suspicion of criminal offenses or major violations of laws and regulations, and no conclusion has yet been made thereof; or (v) there are material ownership disputes over equity held by the domestic company’s controlling shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller.
The Trial Measures provide that an overseas listing or offering securities (which, for the purposes of the Trial Measures, are defined thereunder as equity shares, depository receipts, corporate bonds convertible to equity shares, and other equity securities that are offered and listed overseas, either directly or indirectly, by PRC domestic companies) is explicitly prohibited under any of the following circumstances: (i) such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state rules of the PRC; (ii) the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) the domestic company, its controlling shareholder(s) or the actual controller have committed relevant crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (iv) the domestic company is currently under investigations for suspicion of criminal offenses or major violations of laws and regulations, and no conclusion has yet been made thereof; or (v) there are material ownership disputes over equity held by the domestic company’s controlling shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller.
Management and integration of a licensing arrangement, collaboration, joint venture or other strategic arrangement may disrupt our current operations, decrease our profitability, result in significant expenses, or divert management resources that otherwise would be available for our existing business.
Management and integration of a licensing arrangement, collaboration, joint venture or other strategic arrangement may disrupt our current operations, decrease our profitability, result in significant expenses, or divert management resources that otherwise would be available for our existing business. We may not realize the anticipated benefits of any such transaction or arrangement.
Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label. The FDA, NMPA and other regulatory authorities actively enforce the laws and regulations prohibiting the promotion or advertising of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.
The FDA, NMPA and other regulatory authorities actively enforce the laws and regulations prohibiting the promotion or advertising of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.
Although we have substantial business operations in China, it is unclear whether the dividends we pay with respect to our shares or ADSs, or the gains realized from the transfer of our shares or ADSs, would be treated as income derived from sources within China and as a result be subject to PRC income tax if we were considered a PRC resident enterprise.
Any such PRC tax liability may be reduced by the provisions of an applicable tax treaty. 19 Table of Contents Although we have substantial business operations in China, it is unclear whether the dividends we pay with respect to our shares or ADSs, or the gains realized from the transfer of our shares or ADSs, would be treated as income derived from sources within China and as a result be subject to PRC income tax if we were considered a PRC resident enterprise.
As a result, we need to obtain SAFE approval to use the cash generated from the operations of our PRC subsidiary to pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi.
As a result, we need to complete applicable foreign exchange registration or bank procedures to use the cash generated from the operations of our PRC subsidiary to pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi.
We have terminated the authority to grant additional awards under the 2019 Plan and all future awards will be granted under the 2021 Plan. Therefore, the effective maximum number of shares issuable under the 2019 Plan and 2021 Plan is 9,423,435 and 9,707,945, respectively.
We have terminated the authority to grant additional awards under the 2019 Plan and all future awards will be granted under the 2021 Plan. Therefore, the effective maximum number of shares issuable under the 2019 Plan and 2021 Plan is 9,050,935 and 15,740,360, respectively.
Regardless of the merits or eventual outcome, liability claims may result in significant negative consequences to our business and prospects, including, but not limited to: ● decreased demand for our product candidates or any resulting products; ● damage to our reputation; ● withdrawal of other clinical trial participants; ● costs to defend the related litigation; ● a diversion of our management’s time and resources; ● substantial monetary awards to trial participants or patients; ● inability to commercialize our product candidates; and ● a decline in the market price of our ADSs. 58 Table of Contents We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of noncompliance.
Regardless of the merits or eventual outcome, liability claims may result in significant negative consequences to our business and prospects, including, but not limited to: ● decreased demand for our product candidates or any resulting products; ● damage to our reputation; ● withdrawal of other clinical trial participants; ● costs to defend the related litigation; ● a diversion of our management’s time and resources; 58 Table of Contents ● substantial monetary awards to trial participants or patients; ● inability to commercialize our product candidates; and ● a decline in the market price of our ADSs.
This will generally continue to be the case even if we ceased to be a PFIC in a later taxable year, unless certain elections are made. See “Item 10 Additional Information—Taxation—Material U.S.
This will generally continue to be the case even if we ceased to be a PFIC in a later taxable year, unless certain elections are made. See “Item 10 Additional Information—Taxation—Material U.S. Federal Income Tax Consequences—Passive Foreign Investment Company Rules.”
We may face adverse actions or sanctions by the CSRC or other PRC regulatory agencies if we are unable to comply with such requirements, which may result in fines and penalties, restrictions on our operations, having to delist from a stock exchange outside of China, the halting of securities offerings to foreign investors and other actions that could materially and adversely affect our operations and the interest of our investors and cause a significant depreciation in the price of our ordinary shares and ADSs. 18 Table of Contents If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.
We may face adverse actions or sanctions by the CSRC or other PRC regulatory agencies if we are unable to comply with such requirements, which may result in fines and penalties, restrictions on our operations, having to delist from a stock exchange outside of China, the halting of securities offerings to foreign investors and other actions that could materially and adversely affect our operations and the interest of our investors and cause a significant depreciation in the price of our ordinary shares and ADSs.
We also expect to incur significant costs associated with operating as a public company. ● To date, we have funded our operations primarily through capital contributions from our shareholders via private placements and proceeds from our initial public offering and subsequent at-the-market offering. Our operations have consumed substantial amounts of cash since inception.
We also expect to incur significant costs associated with operating as a public company. ● To date, we have funded our operations primarily through capital contributions from our shareholders via private placements and proceeds from our initial public offering , subsequent at-the-market offering and payment from collaboration agreement with third parties .
If granted, accelerated approval is usually contingent on the sponsor’s agreement to conduct, in a diligent manner, additional post- approval confirmatory studies to verify and describe the drug’s clinical benefit. If such post-approval studies fail to confirm the drug’s clinical benefit, the FDA may withdraw its approval of the drug.
If granted, accelerated approval is usually contingent on the sponsor’s agreement to conduct, in a diligent manner, additional post- approval confirmatory studies to verify and describe the drug’s clinical benefit.
As of February 28, 2025, we have granted 8,795,907 shares awards under the 2021 Plan, excluding awards that were forfeited, cancelled or exercised after the relevant grant dates.
As of February 28, 2026, we have granted 14,712,707 shares awards under the 2021 Plan, excluding awards that were forfeited, cancelled or exercised after the relevant grant dates.
Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions, or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general.
Further, disclosure of interim data by us or by our competitors could result in volatility in the price of our common stock. 36 Table of Contents Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions, or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general.
The FDA and NMPA may impose consent decrees or withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the drug reaches the market.
The FDA may impose consent decrees or withdraw approval, and NMPA may impose administrative measures including suspension, rectification orders or withdrawal of approvals, if compliance with regulatory requirements and standards is not maintained or if problems occur after the drug reaches the market.
Because our market capitalization has declined substantially in recent years, if the value of our goodwill is determined by reference to the average of our quarterly market capitalization, then it is our belief that we were likely a PFIC for our 2024 taxable year.
Because our market capitalization has declined substantially in recent years, if the value of our goodwill and other intangible assets is determined by reference to the average of our quarterly market capitalization, then we were likely a PFIC for our 2025 taxable year and certain prior taxable years.
Our operations in China are governed by the PRC laws and regulations. The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value.
The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value.
The determination as to whether or not an overseas offering and listing by PRC domestic companies is indirect shall be made on a “substance over form” basis; the Listing Guidelines further stipulate that if an issuer not satisfying Condition I submits an application for issuance and listing in overseas markets in accordance with relevant non-PRC issuance regulations requiring such issuer to disclose risk factors mainly related to the PRC, the securities firm(s) and the issuer’s PRC counsel should follow the principle of “substance over form” in order to identify and argue whether the issuer should complete a filing under the Trial Measures.
The determination as to whether or not an overseas offering and listing by PRC domestic companies is indirect shall be made on a “substance over form” basis; the Listing Guidelines further stipulate that if an issuer not satisfying Condition I submits an application for issuance and listing in overseas markets in accordance with relevant non-PRC issuance regulations requiring such issuer to disclose risk factors mainly related to the PRC, the securities firm(s) and the issuer’s PRC counsel should follow the principle of “substance over form” in order to identify and argue whether the issuer should complete a filing under the Trial Measures. 17 Table of Contents Subsequent securities offerings of an issuer in (i) the same overseas market where it has previously offered and listed securities, and (ii) an overseas market other than one where the issuer has previously offered and listed securities shall be filed with the CSRC within three working days after offerings are completed.
There can be no assurance that our drugs and any approved product candidates will be included in the NRDL or provincial reimbursements lists. Products included in the NRDL have been typically generic and essential drugs.
There can be no assurance that our drugs and any approved product candidates will be included in the NRDL or provincial reimbursements lists. Products included in the NRDL have historically included generic and essential drugs, while innovative drugs have increasingly been included through annual NRDL negotiations in recent years.
Passive income generally includes interest, dividends, gains from certain property transactions, rents and royalties (other than certain rents or royalties derived in the active conduct of a trade or business). Cash is generally a passive asset for PFIC purposes. Goodwill and other intangible assets are active under the PFIC rules to the extent attributable to activities that produce active income.
Passive income generally includes interest, dividends, gains from certain property transactions, rents and royalties (other than certain rents or royalties derived in the active conduct of a trade or business). Cash is generally a passive asset for PFIC purposes.
The assets shown on our balance sheet are expected to consist primarily of cash and cash equivalents for the foreseeable future. Therefore, whether we will satisfy the asset test for any taxable year will depend largely on the value of our goodwill and other intangible assets and on how quickly we utilize the cash in our business.
Therefore, whether we will satisfy the asset test for any taxable year will depend largely on the value of our goodwill and other intangible assets and on how quickly we utilize the cash in our business.
In addition, we can give no assurance that we will not be a PFIC under the income test for any taxable year, particularly prior to the commercialization of any of our drug candidates.
In addition, we can give no assurance that we will not be a PFIC under the income test for any taxable year, particularly prior to the commercialization of any of our drug candidates (since certain items of active income that we may earn for any taxable year prior to the commercialization of any drug candidate may be non-occuring or conditional).
The government regulate prices mainly by establishing a consolidated procurement mechanism, revising the NRDL and strengthening regulation of medical and pricing practices. We cannot predict the extent to which our business may be affected by potential future legislative or regulatory developments.
According to currently effective PRC laws and regulations, the prices of approved drugs are determined by market competition. The government regulates prices mainly by establishing a consolidated procurement mechanism, revising the NRDL and strengthening regulation of medical and pricing practices. We cannot predict the extent to which our business may be affected by potential future legislative or regulatory developments.
We are conducting clinical trials and may in the future conduct additional clinical trials for our product candidates outside the United States, including in Australia, Europe or other foreign jurisdictions. The acceptance of trial data from clinical trials conducted outside the United States by the FDA will likely be subject to certain conditions.
We are conducting clinical trials in several jurisdictions such as the United States, China, South Korea and Singapore. We may in the future conduct additional clinical trials for our product candidates outside these jurisdictions. The acceptance of trial data from clinical trials conducted outside the United States by the FDA will likely be subject to certain conditions.
Under the Orphan Drug Act of 1983, the FDA may designate a drug as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a disease with a patient population of fewer than 200,000 individuals in the United States, or a patient population of greater than 200,000 individuals in the United States, but for which there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. 40 Table of Contents Generally, if a drug with an Orphan Drug Designation subsequently receives the first FDA approval for the disease for which it has such designation, the drug is entitled to a period of marketing exclusivity, which precludes the FDA from approving another marketing application for the same drug for the same indication during the period of exclusivity.
Under the Orphan Drug Act of 1983, the FDA may designate a drug as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a disease with a patient population of fewer than 200,000 individuals in the United States, or a patient population of greater than 200,000 individuals in the United States, but for which there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States.
The Foreign Investment Law also sets forth necessary mechanisms to facilitate, protect and manage foreign investments and proposes to establish a foreign investment information reporting system, through which foreign investors or foreign-invested enterprises are required to submit initial report, report of changes, report of deregistration and annual report relating to their investments to the Ministry of Commerce, or MOFCOM, or its local branches.
The Foreign Investment Law also sets forth necessary mechanisms to facilitate, protect and manage foreign investments and proposes to establish a foreign investment information reporting system, through which foreign investors or foreign-invested enterprises are required to submit initial report, report of changes, report of deregistration and annual report relating to their investments to the Ministry of Commerce, or MOFCOM, or its local branches. 20 Table of Contents Our business may be negatively affected by the potential obligations to make additional social insurance and housing fund contributions.
If (i) we mistakenly conclude that certain regulatory filings, permissions and approvals are not required or (ii) applicable laws, regulations, or interpretations change and (iii) we are required to obtain such filings, permissions or approvals in the future, we may be unable to obtain them in a timely manner, or at all, and such filings, permissions or approvals may be denied or rescinded even if obtained.
As the Confidentiality Provisions were recently promulgated and are yet to take effect, their interpretation and implementation remain substantially uncertain. 18 Table of Contents If (i) we mistakenly conclude that certain regulatory filings, permissions and approvals are not required or (ii) applicable laws, regulations, or interpretations change and (iii) we are required to obtain such filings, permissions or approvals in the future, we may be unable to obtain them in a timely manner, or at all, and such filings, permissions or approvals may be denied or rescinded even if obtained.
For instance, in September 2019, the FDA placed a clinical hold on our Phase 1 trial of ADG116 (ADG116-1001) in the United States after we reported to the FDA the death of the only patient dosed in the trial.
Moreover, such events may require us to amend our trials, including reducing the dosage in our clinical trials. 39 Table of Contents For instance, in September 2019, the FDA placed a clinical hold on our Phase 1 trial of ADG116 (ADG116-1001) in the United States after we reported to the FDA the death of the only patient dosed in the trial.
Patients who fail to respond positively to the standard of care treatment will be eligible for clinical trials of unapproved product candidates. However, these prior treatment regimens may render our therapies less effective in clinical trials. Additionally, patients who have failed with prior approved therapies will typically have more advanced cancer and a poorer long-term prognosis.
Patients who fail to respond positively to the standard of care treatment will be eligible for clinical trials of unapproved product candidates. However, these prior treatment regimens may render our therapies less effective in clinical trials.
Drug-related adverse events could affect patient recruitment or the ability of enrolled subjects to complete the trial, and could result in potential product liability claims. Moreover, such events may require us to amend our trials, including reducing the dosage in our clinical trials.
Drug-related adverse events could affect patient recruitment or the ability of enrolled subjects to complete the trial, and could result in potential product liability claims.
If the relevant PRC authorities determine that we shall make supplemental social insurance and housing fund contributions or that we are subject to fines and legal sanctions in relation to our failure to make social insurance and housing fund contributions in full for our employees, our business, financial condition and results of operations may be adversely affected. 20 Table of Contents The lease agreements of our leased properties have not been registered with the relevant PRC government authorities as required by PRC law, which may expose us to potential fines.
If the relevant PRC authorities determine that we shall make supplemental social insurance and housing fund contributions or that we are subject to fines and legal sanctions in relation to our failure to make social insurance and housing fund contributions in full for our employees, our business, financial condition and results of operations may be adversely affected.
As of December 31, 2024, we had US$85.2 million in cash and cash equivalents. The net cash used in our operating activities was US$48.6 million, US$28.5 million and US$29.7 million for the years ended December 31, 2022, 2023 and 2024, respectively.
Our operations have consumed substantial amounts of cash since inception. As of December 31, 2025, we had US$74.5 million in cash and cash equivalents. The net cash used in our operating activities was US$28.5 million, US$29.7 million and US$15.7 million for the years ended December 31, 2023, 2024 and 2025, respectively.
PRC domestic companies shall also provide a written statement of the specific sensitive information provided when providing materials to securities service providers, and such written statements shall be retained for inspection. As the Confidentiality Provisions were recently promulgated and are yet to take effect, their interpretation and implementation remain substantially uncertain.
PRC domestic companies shall also provide a written statement of the specific sensitive information provided when providing materials to securities service providers, and such written statements shall be retained for inspection.
If the interim, topline, or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects, or financial condition. 36 Table of Contents Risks Related to Obtaining Regulatory Approval of Our Drug Candidates The regulatory approval processes of the FDA, NMPA and other comparable regulatory authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approvals for our product candidates, our business will be substantially harmed.
If the interim, topline, or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects, or financial condition.
Because the number of qualified clinical investigators and clinical trial sites is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials at such clinical trial sites.
Additionally, patients who have failed with prior approved therapies will typically have more advanced cancer and a poorer long-term prognosis. 35 Table of Contents Because the number of qualified clinical investigators and clinical trial sites is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials at such clinical trial sites.
In addition, if other global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
In addition, if other global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business. 38 Table of Contents Even if we obtain FDA approval of any of our product candidates, we may never obtain approval or commercialize such products outside of the United States, which would limit our ability to realize their full market potential.
Prior to seeking accelerated approval for any of our product candidates, we intend to obtain a meeting and meet with the FDA and will otherwise evaluate our ability to seek and receive accelerated approval.
If such post-approval studies fail to confirm the drug’s clinical benefit, the FDA may withdraw its approval of the drug. 41 Table of Contents Prior to seeking accelerated approval for any of our product candidates, we intend to obtain a meeting and meet with the FDA and will otherwise evaluate our ability to seek and receive accelerated approval.
Jurisdictions in addition to the United States have established abbreviated pathways for regulatory approval of biological products that are biosimilar to earlier approved reference products. For example, the European Union has had an established regulatory pathway for biosimilars since 2005. 31 Table of Contents The increased likelihood of biosimilar competition has increased the risk of loss of innovators’ market exclusivity.
For example, the European Union has had an established regulatory pathway for biosimilars since 2005. ​ 31 Table of Contents The increased likelihood of biosimilar competition has increased the risk of loss of innovators’ market exclusivity.
As we engage in collaboration worldwide, we may be exposed to specific risks of conducting our business and operations in international markets. We are a biotechnology company with global footprints. We are currently building our clinical and technology infrastructures to support our future global operations and prepare to serve global markets.
We are a biotechnology company with global footprints. We are currently building our clinical and technology infrastructures to support our future global operations and prepare to serve global markets.
For example, regulatory authorities in various jurisdictions have in the past had, and may in the future have, differing requirements for, interpretations of and opinions on our preclinical and clinical data.
The FDA and other regulatory authorities have substantial discretion in the approval process, and determining when or whether regulatory approval will be obtained for any of our product candidates. For example, regulatory authorities in various jurisdictions have in the past had, and may in the future have, differing requirements for, interpretations of and opinions on our preclinical and clinical data.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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It is currently under Phase 1b/2 clinical evaluation in multiple trials in the U.S., China and APAC, in combination with anti-PD-1 therapy. ADG126 is designed to address the toxicity issues of the approved CTLA-4 immuno-oncology therapy and achieve enhance anti-tumor efficacy to expand the potential of CTLA-4 as a target for the treatment of cancer.
It is currently under phase 1b and phase 2 clinical evaluation in multiple trials in the U.S., China and APAC, in combination with anti-PD-1 therapy. ADG126 is designed to address the toxicity issues of the approved CTLA-4 immuno-oncology therapy and achieve enhance anti-tumor efficacy to expand the potential of CTLA-4 as a target for the treatment of cancer.
Such laws include, without limitation: ● the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, to induce, or in return for, either the referral of an individual, or the purchase or recommendation of an item or service for which payment may be made under any federal healthcare program; ● federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment to the federal government, including federal healthcare programs, that are false or fraudulent; 132 Table of Contents ● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes which prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters, and which, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, also imposes certain requirements on HIPAA covered entities and their business associates relating to the privacy, security and transmission of individually identifiable health information; ● the U.S. federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to the federal government, information related to payments or other transfers of value made to physicians, as defined by such law, certain other health care providers beginning in 2022, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and ● United States state and foreign law equivalents of each of the above federal laws, which, in some cases, differ from each other in significant ways, and may not have the same effect, thus complicating compliance efforts, including laws governing the privacy and security of personal data, such as the GDPR, which imposes obligations and restrictions on the collection and use of personal data relating to individuals located in the EU and EEA (including with regard to health data).
Such laws include, without limitation: ● the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, to induce, or in return for, either the referral of an individual, or the purchase or recommendation of an item or service for which payment may be made under any federal healthcare program; ● federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment to the federal government, including federal healthcare programs, that are false or fraudulent; 131 Table of Contents ● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes which prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters, and which, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, also imposes certain requirements on HIPAA covered entities and their business associates relating to the privacy, security and transmission of individually identifiable health information; ● the U.S. federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to the federal government, information related to payments or other transfers of value made to physicians, as defined by such law, certain other health care providers beginning in 2022, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and ● United States state and foreign law equivalents of each of the above federal laws, which, in some cases, differ from each other in significant ways, and may not have the same effect, thus complicating compliance efforts, including laws governing the privacy and security of personal data, such as the GDPR, which imposes obligations and restrictions on the collection and use of personal data relating to individuals located in the EU and EEA (including with regard to health data).
These sanctions could include the FDA’s refusal to approve pending applications, suspension or revocation of approved applications, warning letters, product recalls, product seizures, total or partial suspensions of manufacturing or distribution, injunctions, fines, civil penalties or criminal prosecution. 126 Table of Contents The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following: ● completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s GLP regulations; ● submission to the FDA of an IND, which must become effective before clinical trials may begin and must be updated annually or when significant changes are made; ● approval by an independent Institutional Review Board, or IRB, or ethics committee at each clinical site before the trial is commenced; ● performance of adequate and well-controlled human clinical trials to establish the safety and effectiveness of the proposed biologic product candidate for its intended indications; ● preparation of and submission to the FDA of a BLA when adequate data are obtained from pivotal clinical trials; ● a determination by the FDA within 60 days of its receipt of a BLA to accept the application for review; ● satisfactory completion of an FDA Advisory Committee review, if applicable; ● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMP and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices, or GCP regulations; and ● FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
These sanctions could include the FDA’s refusal to approve pending applications, suspension or revocation of approved applications, warning letters, product recalls, product seizures, total or partial suspensions of manufacturing or distribution, injunctions, fines, civil penalties or criminal prosecution. 125 Table of Contents The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following: ● completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s GLP regulations; ● submission to the FDA of an IND, which must become effective before clinical trials may begin and must be updated annually or when significant changes are made; ● approval by an independent Institutional Review Board, or IRB, or ethics committee at each clinical site before the trial is commenced; ● performance of adequate and well-controlled human clinical trials to establish the safety and effectiveness of the proposed biologic product candidate for its intended indications; ● preparation of and submission to the FDA of a BLA when adequate data are obtained from pivotal clinical trials; ● a determination by the FDA within 60 days of its receipt of a BLA to accept the application for review; ● satisfactory completion of an FDA Advisory Committee review, if applicable; ● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMP and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices, or GCP regulations; and ● FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
Subsequently, in January 2024 at the ASCO Gastrointestinal (GI) Symposium, September 2024 at the ESMO Congress, November 2024 at the SITC annual meeting and in January 2025 at the ASCO GI Symposium, we presented detailed results from both the ADG126/pembrolizumab combination dose escalation and dose expansion cohorts in MSS CRC and improved therapeutic index of ADG126 monotherapy over its unmasked parental antibody ADG116, which are summarized below.
Subsequently, in January 2024 at the ASCO Gastrointestinal (GI) Symposium, September 2024 at the ESMO Congress, November 2024 at the SITC annual meeting, January 2025 at the ASCO GI Symposium and in June 2025 at the ASCO meeting, we presented detailed results from both the ADG126/pembrolizumab combination dose escalation and dose expansion cohorts in MSS CRC and improved therapeutic index of ADG126 monotherapy over its unmasked parental antibody ADG116, which are summarized below.
The determination as to whether or not an overseas offering and listing by PRC domestic companies is indirect shall be made on a “substance over form” basis; the Listing Guidelines further stipulate that if an issuer not satisfying Condition I submits an application for issuance and listing in overseas markets in accordance with relevant non-PRC issuance regulations requiring such issuer to disclose risk factors mainly related to the PRC, the securities firm(s) and the issuer’s PRC counsel should follow the principle of “substance over form” in order to identify and argue whether the issuer should complete a filing under the Trial Measures. 149 Table of Contents Subsequent securities offerings of an issuer in (i) the same overseas market where it has previously offered and listed securities, and (ii) an overseas market other than one where the issuer has previously offered and listed securities shall be filed with the CSRC within three working days after offerings are completed.
The determination as to whether or not an overseas offering and listing by PRC domestic companies is indirect shall be made on a “substance over form” basis; the Listing Guidelines further stipulate that if an issuer not satisfying Condition I submits an application for issuance and listing in overseas markets in accordance with relevant non-PRC issuance regulations requiring such issuer to disclose risk factors mainly related to the PRC, the securities firm(s) and the issuer’s PRC counsel should follow the principle of “substance over form” in order to identify and argue whether the issuer should complete a filing under the Trial Measures. 148 Table of Contents Subsequent securities offerings of an issuer in (i) the same overseas market where it has previously offered and listed securities, and (ii) an overseas market other than one where the issuer has previously offered and listed securities shall be filed with the CSRC within three working days after offerings are completed.
The SFDA promulgated the Administrative Provisions on Special Examination and Approval of Registration of New Drugs in January 2009, according to which, the SFDA conducts special examination and approval for new drug registration applications when: (1) the effective constituent of drug extracted from plants, animals, minerals, etc., as well as the preparations thereof have never been marketed in China, and the material medicines and the preparations thereof are newly discovered; (2) the chemical raw material medicines as well as the preparations thereof and the biological product have not been approved for marketing at home and abroad; (3) the new drugs have obvious clinical treatment advantages for such diseases as AIDS, malignant tumors and orphan diseases, etc. or (4) the new drugs treat diseases currently with no effective methods of treatment. 138 Table of Contents The Special Examination and Approval of Registration of New Drugs provides that the applicant may file for special examination and approval at the clinical trial application stage if the product candidate falls within items (1) or (2).
The SFDA promulgated the Administrative Provisions on Special Examination and Approval of Registration of New Drugs in January 2009, according to which, the SFDA conducts special examination and approval for new drug registration applications when: (1) the effective constituent of drug extracted from plants, animals, minerals, etc., as well as the preparations thereof have never been marketed in China, and the material medicines and the preparations thereof are newly discovered; (2) the chemical raw material medicines as well as the preparations thereof and the biological product have not been approved for marketing at home and abroad; (3) the new drugs have obvious clinical treatment advantages for such diseases as AIDS, malignant tumors and orphan diseases, etc. or (4) the new drugs treat diseases currently with no effective methods of treatment. 137 Table of Contents The Special Examination and Approval of Registration of New Drugs provides that the applicant may file for special examination and approval at the clinical trial application stage if the product candidate falls within items (1) or (2).
The Registration Measures and relevant laws and regulations shall be complied with for registration application; ● With respect to applications for clinical trial and marketing of the imported innovative chemical drugs and therapeutic biological products, the marketing authorization in the country or region where the foreign drug manufacturer is located will not be required; and ● With respect to drug applications that have been accepted before the release of this Decision, if relevant requirements are met, importation permission can be granted if such applications request exemption of clinical trials for the imported drugs based on the data generated from the IMCCT. 142 Table of Contents Approval of Human Genetic Resources The Interim Administrative Measures on Human Genetic Resources, promulgated by the Ministry of Science and Technology and the MOH in June 1998, aimed at protecting and fairly utilizing human genetic resources in the PRC.
The Registration Measures and relevant laws and regulations shall be complied with for registration application; ● With respect to applications for clinical trial and marketing of the imported innovative chemical drugs and therapeutic biological products, the marketing authorization in the country or region where the foreign drug manufacturer is located will not be required; and ● With respect to drug applications that have been accepted before the release of this Decision, if relevant requirements are met, importation permission can be granted if such applications request exemption of clinical trials for the imported drugs based on the data generated from the IMCCT. 141 Table of Contents Approval of Human Genetic Resources The Interim Administrative Measures on Human Genetic Resources, promulgated by the Ministry of Science and Technology and the MOH in June 1998, aimed at protecting and fairly utilizing human genetic resources in the PRC.
Our Robust, Transformative Pipeline By leveraging our proprietary DPL and three platform technologies, we have developed a robust pipeline of innovative product candidates in various stages of development, including our lead candidate, ADG126 SAFEbody which is currently in phase 1b/2 clinical development. 87 Table of Contents ADG126 (muzastotug) is a fully human anti-CTLA-4 SAFEbody Ò , which applies SAFEbody precision masking technology to its parental unmasked version, ADG116, to further enhance safety and efficacy profiles by masking the antibody binding site which is then conditionally activated in the TME to limit on target, off tumor toxicity.
Our Robust, Transformative Pipeline By leveraging our proprietary DPL and three platform technologies, we have developed a robust pipeline of innovative product candidates in various stages of development, including our lead candidate, ADG126 SAFEbody which is currently in phase 1b/2 and phase 2 clinical development. 86 Table of Contents ADG126 (muzastotug) is a fully human anti-CTLA-4 SAFEbody Ò , which applies SAFEbody precision masking technology to its parental unmasked version, ADG116, to further enhance safety and efficacy profiles by masking the antibody binding site which is then conditionally activated in the TME to limit on target, off tumor toxicity.
Risk Factors—Risks Related to Doing Business in the PRC,” “—Risks Related to Clinical Development of Our Product Candidates,” and “—Risks Related to Obtaining Regulatory Approval of Our Drug Candidates.” 84 Table of Contents Furthermore, in connection with our historical issuance of securities to foreign investors, under currently effective PRC laws, regulations and regulatory rules, as of the date of this annual report, we are not currently required to obtain permissions from the China Securities Regulatory Commission (the “CSRC”), and we have not received any formal notice from any PRC authority indicating that we should apply for or are otherwise subject to cybersecurity review or security assessment.
Risk Factors—Risks Related to Doing Business in the PRC,” “—Risks Related to Clinical Development of Our Product Candidates,” and “—Risks Related to Obtaining Regulatory Approval of Our Drug Candidates.” 83 Table of Contents Furthermore, in connection with our historical issuance of securities to foreign investors, under currently effective PRC laws, regulations and regulatory rules, as of the date of this annual report, we are not currently required to obtain permissions from the China Securities Regulatory Commission (the “CSRC”), and we have not received any formal notice from any PRC authority indicating that we should apply for or are otherwise subject to cybersecurity review or security assessment.
Type III meetings refer to meetings not classified as Type I or Type II. 140 Table of Contents Drug Clinical Trial Registration According to the Registration Measures, upon obtaining the approval of its IND applications and before conducting a clinical trial, an applicant shall file a registration form with the SFDA containing various details, including the clinical trial protocol, the name of the principal researcher of the leading institution, the names of participating institutions and researchers, an approval letter from the ethics committee, and a sample of the informed consent form, with a copy sent to the competent provincial administration departments where the trial institutions will be located.
Type III meetings refer to meetings not classified as Type I or Type II. 139 Table of Contents Drug Clinical Trial Registration According to the Registration Measures, upon obtaining the approval of its IND applications and before conducting a clinical trial, an applicant shall file a registration form with the SFDA containing various details, including the clinical trial protocol, the name of the principal researcher of the leading institution, the names of participating institutions and researchers, an approval letter from the ethics committee, and a sample of the informed consent form, with a copy sent to the competent provincial administration departments where the trial institutions will be located.
Other construction projects shall be subject to the filing and selective examination systems. 148 Table of Contents According to the Eight Measures for the Public Security Fire Department to Deepen Reform and Serve Economic and Social Development promulgated by the Ministry of Public Security of the PRC in August 2015, the fire protection design and completion acceptance fire protection record of construction projects with an investment of less than RMB300,000 or a building area of less than 300 square meters (or below the limit set by the housing and urban construction department of the provincial people’s government) was no longer required.
Other construction projects shall be subject to the filing and selective examination systems. 147 Table of Contents According to the Eight Measures for the Public Security Fire Department to Deepen Reform and Serve Economic and Social Development promulgated by the Ministry of Public Security of the PRC in August 2015, the fire protection design and completion acceptance fire protection record of construction projects with an investment of less than RMB300,000 or a building area of less than 300 square meters (or below the limit set by the housing and urban construction department of the provincial people’s government) was no longer required.
For example, we believe our clinical stage anti-CTLA-4 and anti-CD137 candidates bind to different epitopes and exhibit dramatic differences in their respective clinical safety and efficacy results, underscoring the importance of finding suitable species cross-reactive antibodies like those we have utilized for comprehensive preclinical evaluation before entering clinical trials. 115 Table of Contents Our DPL is a large physical phage library (~10 12 ) that contain our synthetic designer antibodies with flexible antibody binding interface.
For example, we believe our clinical stage anti-CTLA-4 and anti-CD137 candidates bind to different epitopes and exhibit dramatic differences in their respective clinical safety and efficacy results, underscoring the importance of finding suitable species cross-reactive antibodies like those we have utilized for comprehensive preclinical evaluation before entering clinical trials. 113 Table of Contents Our DPL is a large physical phage library (~10 12 ) that contain our synthetic designer antibodies with flexible antibody binding interface.
Violation of Data Security Law may subject the relevant entities or individuals to warning, fines, business suspension, revocation of permits or business licenses, or even criminal liabilities. 146 Table of Contents On December 28, 2021, the Cybersecurity Review Measures was promulgated by Cyberspace Administration of China, State Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, Ministry of State Security, Ministry of Finance, Ministry of Commerce, People’s Bank of China, SAMR, National Radio and Television Administration, CSRC, National Administration of State Secrets Protection and State Cryptography Administration and came into effect in February 2022.
Violation of Data Security Law may subject the relevant entities or individuals to warning, fines, business suspension, revocation of permits or business licenses, or even criminal liabilities. 145 Table of Contents On December 28, 2021, the Cybersecurity Review Measures was promulgated by Cyberspace Administration of China, State Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, Ministry of State Security, Ministry of Finance, Ministry of Commerce, People’s Bank of China, SAMR, National Radio and Television Administration, CSRC, National Administration of State Secrets Protection and State Cryptography Administration and came into effect in February 2022.
We have conducted Phase 1b/2 clinical trials of ADG116 in the U.S., China and Asia Pacific (APAC), both as monotherapy and in combination with other therapies to demonstrate the differentiated safety and efficacy profile of ADG116 and to support our evaluation of our anti-CTLA-4 ADG126 SAFEbody, for which ADG116 is the parental antibody. 108 Table of Contents Although ADG116 and ipilimumab bind to human CTLA-4 with comparable affinity, ADG116 features a softer CTLA-4 ligand blocking and stronger ADCC for depleting regulatory T-cells than ipilimumab.
We have conducted Phase 1b/2 clinical trials of ADG116 in the U.S., China and Asia Pacific (APAC), both as monotherapy and in combination with other therapies to demonstrate the differentiated safety and efficacy profile of ADG116 and to support our evaluation of our anti-CTLA-4 ADG126 SAFEbody, for which ADG116 is the parental antibody. 105 Table of Contents Although ADG116 and ipilimumab bind to human CTLA-4 with comparable affinity, ADG116 features a softer CTLA-4 ligand blocking and stronger ADCC for depleting regulatory T-cells than ipilimumab.
Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. 134 Table of Contents In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted.
Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. 133 Table of Contents In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted.
A fast track product may also be eligible for rolling review, in which case the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA. 129 Table of Contents A product intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy designation to expedite its development and review.
A fast track product may also be eligible for rolling review, in which case the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA. 128 Table of Contents A product intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy designation to expedite its development and review.
The Standing Committee of the NPC promulgated the Decision of Extending the Pilot Period of Authorizing the State Council to Carry Out the Pilot Plan for the Drug Marketing Authorization Holder Mechanism in Certain Places in October 2018, which extended the term of the MAH system to November 4, 2019. 141 Table of Contents According to the 2019 Amendment, which came into effect on December 1, 2019, the MAH system will be applicable throughout the country and the legal representative and the key person-in-charge of a drug MAH shall be fully responsible for the quality of drugs.
The Standing Committee of the NPC promulgated the Decision of Extending the Pilot Period of Authorizing the State Council to Carry Out the Pilot Plan for the Drug Marketing Authorization Holder Mechanism in Certain Places in October 2018, which extended the term of the MAH system to November 4, 2019. 140 Table of Contents According to the 2019 Amendment, which came into effect on December 1, 2019, the MAH system will be applicable throughout the country and the legal representative and the key person-in-charge of a drug MAH shall be fully responsible for the quality of drugs.
Drug Distribution According to the Drug Administration Law, its implementing regulations and the Measures for the Supervision and Administration of Circulation of Pharmaceuticals, which was approved by the SFDA in December 2006 and came into effect in May 2007, pharmaceutical enterprises shall be responsible for the quality of the pharmaceuticals that they manufacture, operate, use, purchase, sell, transport, or store. 143 Table of Contents According to the Measures for the Administration of Pharmaceutical Operation Certificate, which was promulgated in February 2004 and amended in November 2017 by the CFDA, a Medicine Operation Certificate is valid for five years.
Drug Distribution According to the Drug Administration Law, its implementing regulations and the Measures for the Supervision and Administration of Circulation of Pharmaceuticals, which was approved by the SFDA in December 2006 and came into effect in May 2007, pharmaceutical enterprises shall be responsible for the quality of the pharmaceuticals that they manufacture, operate, use, purchase, sell, transport, or store. 142 Table of Contents According to the Measures for the Administration of Pharmaceutical Operation Certificate, which was promulgated in February 2004 and amended in November 2017 by the CFDA, a Medicine Operation Certificate is valid for five years.
Both confirmed PRs were sustained after more than 55 weeks (over 14 cycles) of treatment, as of the ASCO GI data cut off. 96 Table of Contents We believe the well-tolerated safety profile of our masked anti-CTLA-4 SAFEbody Ò ADG126 enables continuous dosing in combination with anti-PD-1 to drive the efficacy in patients with cold tumors such as MSS CRC, and in patients with PD-L1 low expressing or PD-1 resistant warm tumors.
Both confirmed PRs were sustained after more than 55 weeks (over 14 cycles) of treatment, as of the ASCO GI data cut off. 94 Table of Contents We believe the well-tolerated safety profile of our masked anti-CTLA-4 SAFEbody Ò ADG126 enables continuous dosing in combination with anti-PD-1 to drive the efficacy in patients with cold tumors such as MSS CRC, and in patients with PD-L1 low expressing or PD-1 resistant warm tumors.
The orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review or approval process. 130 Table of Contents If a product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan drug exclusive approval (or exclusivity), which means that the FDA may not approve any other applications, including a full BLA, to market the same biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity.
The orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review or approval process. 129 Table of Contents If a product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan drug exclusive approval (or exclusivity), which means that the FDA may not approve any other applications, including a full BLA, to market the same biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity.
These results are shown in the Swimmer and Spider plots below. 97 Table of Contents Clinical Efficacy of Patients with MSS CRC (Free of Liver Mets) in Dose Expansion Of particular interest was the confirmed PR in a patient who presented initially without active liver metastases but later experienced tumor shrinkage in new liver lesions, suggesting the potency of the ADG126 and pembrolizumab combination once the steady state cleaved ADG126 in the TME is achieved with repeat cycles of therapy.
These results are shown in the Swimmer and Spider plots below. ​ 95 Table of Contents Clinical Efficacy of Patients with MSS CRC (Free of Liver Mets) in Dose Expansion Of particular interest was the confirmed PR in a patient who presented initially without active liver metastases but later experienced tumor shrinkage in new liver lesions, suggesting the potency of the ADG126 and pembrolizumab combination once the steady state cleaved ADG126 in the TME is achieved with repeat cycles of therapy.
Other potential consequences include, among other things: ● restrictions on the marketing or manufacturing of a product, complete withdrawal of the product from the market or product recalls; ● fines, warning letters or holds on post-approval clinical trials; ● refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing product approvals; ● product seizure or detention, or refusal of the FDA to permit the import or export of products; or ● injunctions or the imposition of civil or criminal penalties. 131 Table of Contents The FDA closely regulates the marketing, labeling, advertising and promotion of biologics.
Other potential consequences include, among other things: ● restrictions on the marketing or manufacturing of a product, complete withdrawal of the product from the market or product recalls; ● fines, warning letters or holds on post-approval clinical trials; ● refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing product approvals; ● product seizure or detention, or refusal of the FDA to permit the import or export of products; or ● injunctions or the imposition of civil or criminal penalties. 130 Table of Contents The FDA closely regulates the marketing, labeling, advertising and promotion of biologics.
The responsibilities of the NHC include coordinating the formulation of national drug policies, the national essential medicine system and the National Essential Medicines List and drafting the administrative rules for the procurement, distribution and use of national essential medicines. 137 Table of Contents According to the Decision of the CFDA on Adjusting the Approval Procedures under the Administrative Approval Items for Certain Drugs, which was promulgated by the CFDA in March 2017 and came into effect in May 2017, the Investigational New Drug Application, or the IND, approval should be issued by the Center for Drug Evaluation, or the CDE, on behalf of the CFDA.
The responsibilities of the NHC include coordinating the formulation of national drug policies, the national essential medicine system and the National Essential Medicines List and drafting the administrative rules for the procurement, distribution and use of national essential medicines. 136 Table of Contents According to the Decision of the CFDA on Adjusting the Approval Procedures under the Administrative Approval Items for Certain Drugs, which was promulgated by the CFDA in March 2017 and came into effect in May 2017, the Investigational New Drug Application, or the IND, approval should be issued by the Center for Drug Evaluation, or the CDE, on behalf of the CFDA.
In addition, in extreme situations, pharmaceutical product manufacturers and operators may be subject to criminal liability if their goods or services lead to the death or injuries of customers or other third parties. 147 Table of Contents Regulations on Tort According to the PRC Civil Code, if damages to other persons are caused by defective products due to the fault of third parties, such as the parties providing transportation or warehousing, the producers and the sellers of the products have the right to recover their respective losses from such third parties.
In addition, in extreme situations, pharmaceutical product manufacturers and operators may be subject to criminal liability if their goods or services lead to the death or injuries of customers or other third parties. 146 Table of Contents Regulations on Tort According to the PRC Civil Code, if damages to other persons are caused by defective products due to the fault of third parties, such as the parties providing transportation or warehousing, the producers and the sellers of the products have the right to recover their respective losses from such third parties.
Therefore, we believe that tumor CTLA-4 targeting in combination with targeting PD-1/PD-L1 pathway in the TME can effectively deplete Treg cells to elicit synergistic clinical benefits. 90 Table of Contents CTLA-4 is Constitutively and Highly Expressed in Tumor Tregs in Both Mouse and Human 91 Table of Contents Adagene’s View of Anti-CTLA-4 Therapy: Synergy to Combine CTLA-4-Mediated Treg Depletion with Teff via PD-1 ​ * References: Leach, DR, Krummel, MF, Allison, JP. et al.
Therefore, we believe that tumor CTLA-4 targeting in combination with targeting PD-1/PD-L1 pathway in the TME can effectively deplete Treg cells to elicit synergistic clinical benefits. 89 Table of Contents CTLA-4 is Constitutively and Highly Expressed in Tumor Tregs in Both Mouse and Human Adagene’s View of Anti-CTLA-4 Therapy: Synergy to Combine CTLA-4-Mediated Treg Depletion with Teff via PD-1 ​ 90 Table of Contents * References: Leach, DR, Krummel, MF, Allison, JP. et al.
The PRC Company Law also applies to foreign-invested limited liability companies. 135 Table of Contents Investment activities in the PRC by foreign investors are governed by the Catalog of Encouraged Industries for Foreign Investment (2022 Edition), which was promulgated by the National Development and Reform Commission, or the NDRC, and Ministry of Commerce of the PRC, or the MOFCOM, in October 2022 and came into effect in January 2023, and the Special Administrative Measures for the Access of Foreign Investment (Negative List), or the Negative List, which was promulgated by the MOFCOM and the NDRC in September 2024 and came into effect in November 2024.
The PRC Company Law also applies to foreign-invested limited liability companies. 134 Table of Contents Investment activities in the PRC by foreign investors are governed by the Catalog of Encouraged Industries for Foreign Investment (2022 Edition), which was promulgated by the National Development and Reform Commission, or the NDRC, and Ministry of Commerce of the PRC, or the MOFCOM, in October 2022 and came into effect in January 2023, and the Special Administrative Measures for the Access of Foreign Investment (Negative List), or the Negative List, which was promulgated by the MOFCOM and the NDRC in September 2024 and came into effect in November 2024.
The following chart summarizes the toxicities observed for each of the three combination dosing regimens that were evaluated, further reinforcing the potential best-in-class safety profile of ADG126 in combination with pembrolizumab. 95 Table of Contents Combination Safety: ADG126 in Combination with Pembrolizumab is Comparable to Pembrolizumab Alone (N=46) We also observed the efficacy profile at the 10 mg/kg Q3W regimen in dose escalation, which triggered expansion cohorts at this dosing regimen.
The following chart summarizes the toxicities observed for each of the three combination dosing regimens that were evaluated, further reinforcing the potential best-in-class safety profile of ADG126 in combination with pembrolizumab. 93 Table of Contents Combination Safety: ADG126 in Combination with Pembrolizumab is Comparable to Pembrolizumab Alone (N=46) We also observed the efficacy profile at the 10 mg/kg Q3W regimen in dose escalation, which triggered expansion cohorts at this dosing regimen.
We expect to continue our relationships with WuXi Biologics while Adagene is continuously evaluating multiple global vendors to ensure continuous supply of Adagene pipeline products for on-going and planned clinical trials. 124 Table of Contents COMPETITION The biotechnology and pharmaceutical industries are highly competitive and characterized by continuing technological advancement, significant competition and an emphasis on intellectual property.
We expect to continue our relationships with WuXi Biologics while Adagene is continuously evaluating multiple global vendors to ensure continuous supply of Adagene pipeline products for on-going and planned clinical trials. 123 Table of Contents COMPETITION The biotechnology and pharmaceutical industries are highly competitive and characterized by continuing technological advancement, significant competition and an emphasis on intellectual property.
Both patients had either liver or lung metastases. These results support further evaluation of ADG116 (which is the activated form of ADG126) in combination with pembrolizumab in difficult-to-treat and cold tumor types such as MSS-CRC. 109 Table of Contents Clinical Development Status Clinical data to date has demonstrated that ADG116 is clinically active.
Both patients had either liver or lung metastases. These results support further evaluation of ADG116 (which is the activated form of ADG126) in combination with pembrolizumab in difficult-to-treat and cold tumor types such as MSS-CRC. 106 Table of Contents Clinical Development Status Clinical data to date has demonstrated that ADG116 is clinically active.
Furthermore, any researcher conducting research funded in part or in whole by the PRC government is required to submit relevant scientific data for management by the entity to which such researcher is affiliated before that data may be published in any foreign academic journal. 145 Table of Contents Personal data Pursuant to the Civil Code of the PRC, the personal information of an individual shall be protected by the law.
Furthermore, any researcher conducting research funded in part or in whole by the PRC government is required to submit relevant scientific data for management by the entity to which such researcher is affiliated before that data may be published in any foreign academic journal. 144 Table of Contents Personal data Pursuant to the Civil Code of the PRC, the personal information of an individual shall be protected by the law.
Other anti-CD137 monoclonal antibody candidates in earlier stages of development include YH004 from Eucure, EU101 from Eutilex, ATOR-1017 from Alligator Bioscience, LVGN6051 from Lyvgen, CTX-471 from Compass Therapeutics, and AGEN2373 from Agenus. 125 Table of Contents INSURANCE We provide social security insurance including pension insurance, unemployment insurance, work-related injury insurance and medical insurance for our employees.
Other anti-CD137 monoclonal antibody candidates in earlier stages of development include YH004 from Eucure, EU101 from Eutilex, ATOR-1017 from Alligator Bioscience, LVGN6051 from Lyvgen, CTX-471 from Compass Therapeutics, and AGEN2373 from Agenus. 124 Table of Contents INSURANCE We provide social security insurance including pension insurance, unemployment insurance, work-related injury insurance and medical insurance for our employees.
Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial. 127 Table of Contents Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCPs, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial.
Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial. 126 Table of Contents Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCPs, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial.
This program is currently in Phase 2 clinical development. 119 Table of Contents 2019 Collaboration Agreements In May 2019, we entered into (i) a collaboration agreement that covers Greater China (the “Dragon Boat Greater China Agreement”) and (ii) a collaboration agreement that covers the regions other than Greater China (the “Dragon Boat ROW Agreement,” together with the Dragon Boat Greater China Agreement, the “2019 Dragon Boat Agreements”), with Dragon Boat Biopharmaceutical (Shanghai) Limited.
This program is currently in Phase 2 clinical development. 118 Table of Contents 2019 Collaboration Agreements In May 2019, we entered into (i) a collaboration agreement that covers Greater China (the “Dragon Boat Greater China Agreement”) and (ii) a collaboration agreement that covers the regions other than Greater China (the “Dragon Boat ROW Agreement,” together with the Dragon Boat Greater China Agreement, the “2019 Dragon Boat Agreements”), with Dragon Boat Biopharmaceutical (Shanghai) Limited.
Additionally, we have forged strategic collaborations with reputable global partners that leverage our SAFEbody technology in multiple approaches at the vanguard of science. 86 Table of Contents We aim to push the boundaries of antibody discovery and engineering through the precise design, construction, and selection of antibody product candidates intractable to traditional antibody technology.
Additionally, we have forged strategic collaborations with reputable global partners that leverage our SAFEbody technology in multiple approaches at the vanguard of science. 85 Table of Contents We aim to push the boundaries of antibody discovery and engineering through the precise design, construction, and selection of antibody product candidates intractable to traditional antibody technology.
Decreases in third-party reimbursement for any product or a decision by a third-party payer not to cover a product could reduce physician usage and patient demand for the product. 133 Table of Contents Healthcare Reform The United States and some foreign jurisdictions are considering or have enacted a number of reform proposals to change the healthcare system.
Decreases in third-party reimbursement for any product or a decision by a third-party payer not to cover a product could reduce physician usage and patient demand for the product. 132 Table of Contents Healthcare Reform The United States and some foreign jurisdictions are considering or have enacted a number of reform proposals to change the healthcare system.
Upon termination of the Exelixis Agreement for any reason, the license granted to Exelixis will terminate. 118 Table of Contents Sanjin Collaboration/ Out-Licensing Agreements 2018 Collaboration Agreements In December 2018, we entered into (i) a collaboration agreement (the “Sanjin Greater China Agreement”) that covers Greater China with Guilin Sanjin Pharmaceutical Co., Ltd.
Upon termination of the Exelixis Agreement for any reason, the license granted to Exelixis will terminate. 117 Table of Contents Sanjin Collaboration/ Out-Licensing Agreements 2018 Collaboration Agreements In December 2018, we entered into (i) a collaboration agreement (the “Sanjin Greater China Agreement”) that covers Greater China with Guilin Sanjin Pharmaceutical Co., Ltd.
The CDE has developed a list of qualifying drugs that meet the foregoing criteria. 139 Table of Contents Clinical Trial Process and Good Clinical Practices According to the Registration Measures, a clinical trial consists of Phases I, II, III and IV. Phase I refers to the initial clinical pharmacology and safety evaluation studies in humans.
The CDE has developed a list of qualifying drugs that meet the foregoing criteria. 138 Table of Contents Clinical Trial Process and Good Clinical Practices According to the Registration Measures, a clinical trial consists of Phases I, II, III and IV. Phase I refers to the initial clinical pharmacology and safety evaluation studies in humans.
We also have a 3,678 square feet facility in San Diego, California for laboratory, research and development functions, the lease for which expires on October 31, 2025. We do not expect difficulties in renewing lease agreements for our facilities. ITEM 4A. UNRESOLVED STAFF COMMENTS None.
We also have a 3,678 square feet facility in San Diego, California for laboratory, research and development functions, the lease for which expires on October 31, 2026. We do not expect difficulties in renewing lease agreements for our facilities. ITEM 4A. UNRESOLVED STAFF COMMENTS None.
For the avoidance of doubt, as of the date of this annual report, the CD28 T-cell engagers have not entered into IND-enabling stage. ​ 114 Table of Contents OUR PLATFORM Overview Our proprietary DPL platform is built upon our insights into precise and dynamic antibody-antigen interaction.
For the avoidance of doubt, as of the date of this annual report, the CD28 T-cell engagers have not entered into IND-enabling stage. ​ 112 Table of Contents OUR PLATFORM Overview Our proprietary DPL platform is built upon our insights into precise and dynamic antibody-antigen interaction.
ADG126 10 mpk Q3W + Pembro 3L MSS CRC Patient: Case Study of Confirmed PR and Reduced Liver Lesions 98 Table of Contents We also presented a preliminary analysis of progression-free survival (PFS) in those MSS CRC patients free of liver and peritoneal metastasis; a median PFS of seven months was observed in those treated with ADG126 10 mg/kg at two dosing frequencies pooled together every three weeks (n=9) and every six weeks (n=6).
ADG126 10 mpk Q3W + Pembro 3L MSS CRC Patient: Case Study of Confirmed PR and Reduced Liver Lesions We also presented a preliminary analysis of progression-free survival (PFS) in those MSS CRC patients free of liver and peritoneal metastasis; a median PFS of seven months was observed in those treated with ADG126 10 mg/kg at two dosing frequencies pooled together every three weeks (n=9) and every six weeks (n=6).
Our patents and patent applications cover our key technologies and product candidates, including the DPL platform, our clinical candidates, ADG126, ADG116, ADG206, ADG106 and our preclinical candidates including ADG153, ADG138 and ADG152. Excluding any patent term adjustment and patent term extension, our currently issued patents are expected to expire from 2033 to 2039.
Our patents and patent applications cover our key technologies and product candidates, including the DPL platform, our clinical candidates, ADG126, ADG116, ADG206, ADG106 and our preclinical candidates including ADG153, ADG138 and ADG152. Excluding any patent term adjustment and patent term extension, our currently issued patents are expected to expire from 2033 to 2041.
Property, Plants and Equipment Our headquarter is based in Suzhou, China, which are approximately 2,246 square meters in size. The expiration dates of the lease agreements for this facility range from March 31, 2026 to September 15, 2027.
Property, Plants and Equipment Our headquarter is based in Suzhou, China, which are approximately 2,246 square meters in size. The expiration dates of the lease agreements for this facility range from September 15, 2027 to March 31, 2029.
We have also out-licensed the Greater China rights for two antibody candidates to Sanjin and its affiliates.
We have out-licensed the Greater China rights for two antibody candidates to Sanjin and its affiliates.
The delisting of the ADSs, or the threat of them being delisted, may materially and adversely affect the value of your investment.” 82 Table of Contents Cybersecurity Review Measures On December 28, 2021, the Cyberspace Administration of China, or the CAC, and 12 other relevant PRC government authorities published the amended Cybersecurity Review Measures, or the Cybersecurity Review Measures, which went on February 15, 2022 and supersede and replace the current Cybersecurity Review Measures previously promulgated on April 13, 2020.
The delisting of the ADSs, or the threat of them being delisted, may materially and adversely affect the value of your investment.” Cybersecurity Review Measures On December 28, 2021, the Cyberspace Administration of China, or the CAC, and 12 other relevant PRC government authorities published the amended Cybersecurity Review Measures, or the Cybersecurity Review Measures, which went on February 15, 2022 and supersede and replace the current Cybersecurity Review Measures previously promulgated on April 13, 2020.
ADG126 is locally activated specifically in the TME, rather than systemically, to stimulate antitumor immune response. 102 Table of Contents In preclinical studies, we observed that ADG126 had an enhanced therapeutic window and improved safety features.
ADG126 is locally activated specifically in the TME, rather than systemically, to stimulate antitumor immune response. 100 Table of Contents In preclinical studies, we observed that ADG126 had an enhanced therapeutic window and improved safety features.
The submission of a BLA requires payment of a substantial application user fee to the FDA unless a waiver or exemption applies. 128 Table of Contents Once an original BLA has been submitted, FDA has 60 days to determine whether the application can be filed.
The submission of a BLA requires payment of a substantial application user fee to the FDA unless a waiver or exemption applies. 127 Table of Contents Once an original BLA has been submitted, FDA has 60 days to determine whether the application can be filed.
We reported data from preclinical studies demonstrating that the FcgR-mediated crosslinking of ADG206 in IgG1 format enhances T-cell responses and antitumor activity, while the SAFEbody masking technology secures its activation in the TME to limit on-target off-tumor toxicities. Preclinical data demonstrated that ADG206 was well tolerated, with normal pharmacokinetic properties and minimal activation in circulation.
We reported data from preclinical studies demonstrating that the FcgR-mediated crosslinking of ADG206 in IgG1 format enhances T-cell responses and antitumor activity, while the SAFEbody masking technology secures its activation in the TME to limit on-target off-tumor toxicities. 109 Table of Contents Preclinical data demonstrated that ADG206 was well tolerated, with normal pharmacokinetic properties and minimal activation in circulation.
In 2024, we did not receive any additional fees from Exelixis, Inc. under the agreement. We are subject to certain exclusivity provisions limiting our right to research, develop, make, and commercialize any other antibodies directed to the selected targets during the term of the Exelixis Agreement, subject to exceptions for antibodies with sequence identities that differ by a specified amount.
In 2024, we did not receive any additional fees from Exelixis, Inc. under the agreement. 116 Table of Contents We are subject to certain exclusivity provisions limiting our right to research, develop, make, and commercialize any other antibodies directed to the selected targets during the term of the Exelixis Agreement, subject to exceptions for antibodies with sequence identities that differ by a specified amount.
These data support the mechanism of action for ADG126 as shown below in data presented at AACR 2023: ADG126 Monotherapy Tumor Biopsy: Case Study Shows Increased Teff / Treg with Treg Depletion in TME of an HCC Patient who Progressed on Atezolizumab + Bevacizumab* * Data from paired tumor biopsies were collected before and after treatment.
These data support the mechanism of action for ADG126 as shown below in data presented at AACR 2023: ADG126 Monotherapy Tumor Biopsy: Case Study Shows Increased Teff / Treg with Treg Depletion in TME of an HCC Patient who Progressed on Atezolizumab + Bevacizumab* 92 Table of Contents * Data from paired tumor biopsies were collected before and after treatment.
According to the Measures for the Exemption of Value-Added Tax from Cross-Border Taxable Activities in the Collection of Value-Added Tax in Lieu of Business Tax (for Trial Implementation) revised in June 2018, if domestic enterprises provide cross-border taxable activities such as professional technical services, technology transfer, software services, the above-mentioned cross-border taxable activities are exempt from VAT. 153 Table of Contents 4.C.
According to the Measures for the Exemption of Value-Added Tax from Cross-Border Taxable Activities in the Collection of Value-Added Tax in Lieu of Business Tax (for Trial Implementation) revised in June 2018, if domestic enterprises provide cross-border taxable activities such as professional technical services, technology transfer, software services, the above-mentioned cross-border taxable activities are exempt from VAT. 4.C.
The Regulations for the Implementation of the Drug Administration Law, at the same time, provide the detailed implementation regulations for the Drug Administration Law. 136 Table of Contents In 2017, the drug regulatory system entered a new and significant period of reform.
The Regulations for the Implementation of the Drug Administration Law, at the same time, provide the detailed implementation regulations for the Drug Administration Law. 135 Table of Contents In 2017, the drug regulatory system entered a new and significant period of reform.
In February 2025, the CAC promulgated the Measures for the Management of Compliance Audits on Personal Information Protection, which will come into effect in May 2025, stipulating that personal information processors handling the personal information of more than 10 million individuals should conduct a compliance audit on personal information protection at least once every two years.
In February 2025, the CAC promulgated the Measures for the Management of Compliance Audits on Personal Information Protection, which came into effect in May 2025, stipulating that personal information processors handling the personal information of more than 10 million individuals should conduct a compliance audit on personal information protection at least once every two years.
The SEC maintains an internet site at www.sec.gov that contains reports, information statements, and other information regarding issuers that file electronically with the SEC. 81 Table of Contents Recent Regulatory Development Implication of the Holding Foreign Companies Accountable Act The Holding Foreign Companies Accountable Act (the “HFCAA”), was enacted on December 18, 2020.
The SEC maintains an internet site at www.sec.gov that contains reports, information statements, and other information regarding issuers that file electronically with the SEC. Recent Regulatory Development Implication of the Holding Foreign Companies Accountable Act The Holding Foreign Companies Accountable Act (the “HFCAA”), was enacted on December 18, 2020.
Multiplex immunofluorescence analysis was performed by Dr. Joe Yeong’s lab at IMCB, A*STAR. Images were analyzed using HALO. Tregs were defined as Foxp3+ CD8- cells.
Multiplex immunofluorescence analysis was performed by Dr. Joe Yeong’s lab at IMCB, A*STAR. Images were analyzed using HALO. Tregs were defined as Foxp3+ CD8- cells. Teff cells were defined as CD8+ T cells.
According to the Patent Law of the PRC, any organization or individual that applies for a patent in a foreign country for an invention or utility model patent established in China is required to report to the NIPA for confidentiality examination. 144 Table of Contents Trade Secrets According to the PRC Anti-Unfair Competition Law, which was promulgated by the Standing Committee of the NPC in September 1993 and amended in November 2017 and April 2019, respectively, the term “trade secrets” refers to technical and business information that is unknown to the public, has utility, may create business interests or profits for its legal owners or holders, and is maintained as a secret by its legal owners or holders.
According to the Patent Law of the PRC, any organization or individual that applies for a patent in a foreign country for an invention or utility model patent established in China is required to report to the CNIPA for confidentiality examination. 143 Table of Contents Trade Secrets According to the PRC Anti-Unfair Competition Law, which was promulgated by the Standing Committee of the NPC in September 1993 and amended in November 2017, April 2019 and June 2025, respectively, the term “trade secrets” refers to technical and business information that is unknown to the public, has utility, may create business interests or profits for its legal owners or holders, and is maintained as a secret by its legal owners or holders.
Organizational Structure The following diagram illustrates our corporate structure as of the date of this annual report, including our material subsidiaries directly or indirectly owned by us through equity ownership (our group structure does not include any variable interest entities): ​ 4.D.
Organizational Structure The following diagram illustrates our corporate structure as of the date of this annual report, including our material subsidiaries directly or indirectly owned by us through equity ownership (our group structure does not include any variable interest entities): ​ 152 Table of Contents 4.D.
We believe that the continued expansion of indications, and the launch of innovative novel anti-CTLA-4 antibodies with potential for higher safety and better efficacy may increase the market for CTLA-4 antibodies significantly. We are also developing the anti-CD137 targeting antibody ADG206. As of the date of this annual report, to our best knowledge, there are no marketed CD137 agonist drugs.
We believe that the continued expansion of indications, and the launch of innovative novel anti-CTLA-4 antibodies with potential for higher safety and better efficacy may increase the market for CTLA-4 antibodies significantly. ADG206 is an anti-CD137 targeting antibody. As of the date of this annual report, to our best knowledge, there are no marketed CD137 agonist drugs.
There were no intercompany loans provided by Adagene Inc. to Adagene Suzhou during the years ended and as of December 31, 2022, 2023 and 2024.
There were no intercompany loans provided by Adagene Inc. to Adagene Suzhou during the years ended and as of December 31, 2023, 2024 and 2025.
It also targets regulatory T-cells for depletion within the TME by means of ADCC, to mediate antitumor T-cell immunity. 103 Table of Contents 104 Table of Contents We evaluated the in vivo antitumor efficacy of ADG126 in syngeneic mouse tumor models.
It also targets regulatory T-cells for depletion within the TME by means of ADCC, to mediate antitumor T-cell immunity. 101 Table of Contents We evaluated the in vivo antitumor efficacy of ADG126 in syngeneic mouse tumor models.
If any patents issue from our pending patent applications, excluding any patent term adjustments and patent term extension, such patents will be expected to expire from 2033 to 2044.
If any patents issue from our pending patent applications, excluding any patent term adjustments and patent term extension, such patents will be expected to expire from 2033 to 2046.
ADG206 demonstrated enhanced anti-tumor activity as a single agent and in combination with other checkpoint inhibitors, including anti-PD-1 or anti-CTLA-4 therapy. We believe that the safety and efficacy profiles of ADG206 strongly supports its potential as a combination agent. Clinical Development Status: ADG206 is currently in phase 1 development.
ADG206 demonstrated enhanced anti-tumor activity as a single agent and in combination with other checkpoint inhibitors, including anti-PD-1 or anti-CTLA-4 therapy. We believe that the safety and efficacy profiles of ADG206 strongly supports its potential as a combination agent. Clinical Development Status: ADG206 has completed phase 1 development.
Under terms of the agreement, Merck provides pembrolizumab and input on our clinical trials evaluating pembrolizumab in combination with ADG126 and ADG116, respectively. 116 Table of Contents TECHNOLOGY COLLABORATIONS WITH BIOPHARMACEUTICAL COMPANIES We enter into collaborations with biotechnology and pharmaceutical companies to leverage the power of our technology platforms, creating a network of potential future revenue streams that complements future long-term value from our wholly-owned pipeline.
Under terms of the agreement, Merck provides pembrolizumab and input on our clinical trials evaluating pembrolizumab in combination with ADG126 . TECHNOLOGY COLLABORATIONS WITH BIOPHARMACEUTICAL COMPANIES We enter into collaborations with biotechnology and pharmaceutical companies to leverage the power of our technology platforms, creating a network of potential future revenue streams that complements future long-term value from our wholly-owned pipeline.
ADG138 is currently IND-ready. 113 Table of Contents ● ADG152 : This CD20xCD3 POWERbody integrates the company’s proprietary bispecific TCE platform with SAFEbody precision masking technology to minimize cytokine release syndrome (CRS) and on-target off-tumor toxicities for an increased therapeutic index.
ADG138 is currently IND-ready. ● ADG152 : This CD20xCD3 POWERbody integrates the company’s proprietary bispecific TCE platform with SAFEbody precision masking technology to minimize cytokine release syndrome (CRS) and on-target off-tumor toxicities for an increased therapeutic index.
Our lead candidate is an anti-CTLA-4 SAFEbody, ADG126 (muzastotug), which is currently in phase 1b/2 development, and focused initially on metastatic microsatellite-stable (MSS) colorectal cancer (CRC).
Our lead candidate is an anti-CTLA-4 SAFEbody, ADG126 (muzastotug), which is currently in phase 1b/2 and phase 2 clinical development, and focuses initially on metastatic microsatellite-stable (MSS) colorectal cancer (CRC).
Other than the above disclosed transfer of funds, we did not transfer any type of assets between Adagene Suzhou and other Adagene subsidiaries in 2022, 2023 and 2024. 85 Table of Contents Restrictions on Foreign Exchange and the Ability to Transfer Cash between Entities, Across Borders and to U.S.
Other than the above disclosed transfer of funds, we did not transfer any type of assets between Adagene Suzhou and other Adagene subsidiaries in 2023, 2024 and 2025. 84 Table of Contents Restrictions on Foreign Exchange and the Ability to Transfer Cash between Entities, Across Borders and to U.S.
The comparison of plasma and tumor PK with its parental antibody ADG116 further supports the PK advantage of ADG126, over unmasked antibodies. 106 Table of Contents 107 Table of Contents In the same poster, we disclosed the experimental PK comparison between ADG126 and ipilimumab in MC38 tumor-bearing mice, further supporting the improved therapeutic index of ADG126 over ipilimumab.
The comparison of plasma and tumor PK with its parental antibody ADG116 further supports the PK advantage of ADG126, over unmasked antibodies. 103 Table of Contents 104 Table of Contents In the same poster, we disclosed the experimental PK comparison between ADG126 and ipilimumab in MC38 tumor-bearing mice, further supporting the improved therapeutic index of ADG126 over ipilimumab.
In 2022, 2023 and 2024, Adagene Inc. made payments of US$24.5 million, US$20.5 million and US$16.3 million, respectively, in cash to Adagene Suzhou as consideration for providing services associated with research and development activities related to those intellectual properties owned by Adagene Inc.
In 2023, 2024 and 2025, Adagene Inc. made payments of US$20.5 million, US$16.3 million and US$28.5 million, respectively, in cash to Adagene Suzhou as consideration for providing services associated with research and development activities related to those intellectual properties owned by Adagene Inc.
To further advance our pipeline, we have also put in place various clinical collaborations, including an agreement with Roche who is sponsoring and conducting a triple combination trial with ADG126, atezolizumab and bevacizumab in first-line hepatocellular carcinoma (HCC), clinical collaborations and supply agreements with Merck who provides pembrolizumab for certain of our combination clinical trials, and agreements with research organizations in Singapore for investigator-initiated trials of our clinical candidates.
To further advance our pipeline, we have also put in place various clinical collaborations, including an agreement with Roche who is sponsoring and conducting a triple combination trial with ADG126, atezolizumab and bevacizumab in first-line hepatocellular carcinoma (HCC), clinical collaboration and supply agreement with Merck who provides pembrolizumab for certain of our combination clinical trials, and agreement with research organization in Singapore for investigator-initiated trial of our clinical candidate.
Preclinical data demonstrated that ADG206 was well tolerated, with normal pharmacokinetic properties and minimal activation in circulation. It also had robust anti-tumor activity as a single agent in multiple tumor models, with 4-fold stronger anti-CD137 agonistic activity of its activated form than a benchmark antibody (urelumab analog). ADG206 is currently in Phase 1 evaluation.
Preclinical data demonstrated that ADG206 was well tolerated, with normal pharmacokinetic properties and minimal activation in circulation. It also had robust anti-tumor activity as a single agent in multiple tumor models, with 4-fold stronger anti-CD137 agonistic activity of its activated form than a benchmark antibody (urelumab analog). ADG206 monotherapy demonstrated a favorable safety profile in Phase 1 evaluation.
The figure below shows how ADG206 and ADG106 are designed to target a unique epitope of CD137 and overcome the challenges of anti-CD137 therapy. 111 Table of Contents ADG 106/206 target a unique epitope of CD137/4-1BB pathway validated by CAR-T ADG206 POWERbody: Our Fc-Enhanced IgG1 SAFEbody is a Next Generation Anti-CD137 Therapy ADG206 is designed to solve the safety and efficacy challenges of anti-CD137 therapy, leveraging learnings from development of urelumab (another company’s anti-CD137 targeting antibody), which showed single agent clinical efficacy and dose-dependent liver toxicity in clinic, as well as the clinical development of our unmasked anti-CD137, ADG106, which is the activated form.
ADG 106/206 target a unique epitope of CD137/4-1BB pathway validated by CAR-T ADG206 POWERbody: Our Fc-Enhanced IgG1 SAFEbody is a Next Generation Anti-CD137 Therapy ADG206 is designed to solve the safety and efficacy challenges of anti-CD137 therapy, leveraging learnings from development of urelumab (another company’s anti-CD137 targeting antibody), which showed single agent clinical efficacy and dose-dependent liver toxicity in clinic, as well as the clinical development of our unmasked anti-CD137, ADG106, which is the activated form.
The presentation at AACR included a larger number of patients (N=30) and further reinforced the compelling, best-in-class safety profile at dosing levels up to 20 mg/kg in a heavily pretreated patient population (majority received ≥3 prior lines of therapy) once every three weeks with repeat dosing.
The presentation at AACR included a larger number of patients (N=30) and further reinforced the compelling, best-in-class safety profile at dosing levels up to 20 mg/kg in a heavily pretreated patient population (majority received ≥3 prior lines of therapy) once every three weeks with repeat dosing. No Grade 3 or higher TRAEs were reported.
ADG153 is currently IND-ready. ● CD28 T-cell engagers : We are developing anti-CD28 bispecific POWERbody TCEs that exhibit enormous potential to fulfill the promises of safe and durable T-cell mediated synergistic immunotherapies when combined with CD3 bispecific POWERbody TCEs and/or checkpoint inhibitors.
ADG153 is currently IND-ready. ● CD28 T-cell engagers : We are developing POWERbody TCEs with co-stimulatory signal such as CD28 that exhibit enormous potential to fulfill the promises of safe and durable T-cell mediated synergistic immunotherapies when combined with CD3 bispecific POWERbody TCEs and/or checkpoint inhibitors.
As of February 28, 2025, Yervoy (ipilimumab) from BMS and Imjudo (tremelimumab) from AstraZeneca are the two marketed anti-CTLA-4 therapies approved by FDA for various cancer indications. Iplilimumab is approved both as a monotherapy and a combination therapy in seven indications, while tremelimumab is approved as a combination therapy for two indications.
As of March 18, 2026, Yervoy (ipilimumab) from BMS and Imjudo (tremelimumab) from AstraZeneca are the two marketed anti-CTLA-4 therapies approved by FDA for various cancer indications. Iplilimumab is approved both as a monotherapy and a combination therapy in seven indications, while tremelimumab is approved as a combination therapy for two indications.
The masking moiety in ADG126 functions to block the interaction between ADG126 and its target CTLA-4 protein. Once ADG126 is attracted and enters the tumor tissue with constitutively over expressed CTLA-4 on Treg cells in TME, proteases overexpressed in the TME cleave off the masking moiety, and the antibody is then activated, binding to CTLA-4 and inhibiting its function.
Once ADG126 is attracted and enters the tumor tissue with constitutively over expressed CTLA-4 on Treg cells in TME, proteases overexpressed in the TME cleave off the masking moiety, and the antibody is then activated, binding to CTLA-4 and inhibiting its function.
Additionally, tumor shrinkage (12% reduction in sum of target lesions) was observed in a non-small cell lung cancer patient (NSCLC) who received 14 cycles of ADG126 at 20 mg/kg Q3W. Previously, this patient was treated with pembrolizumab and docetaxel.
Previously, this patient had surgery and five prior lines of systemic therapies. Additionally, tumor shrinkage (12% reduction in sum of target lesions) was observed in a non-small cell lung cancer patient (NSCLC) who received 14 cycles of ADG126 at 20 mg/kg Q3W. Previously, this patient was treated with pembrolizumab and docetaxel.
ADG126 is currently in phase 1b/2 evaluation, with a focus on phase 2 dose expansion in combination with Merck’s (known as MSD outside of the US and Canada) anti-PD-1 therapy, KEYTRUDA ® (pembrolizumab) in patients with advanced/metastatic MSS CRC.
ADG126 is currently in phase 1b/2 and phase 2 clinical development, with a focus on randomized phase 2 dose-optimization study in combination with Merck’s (known as MSD outside of the US and Canada) anti-PD-1 therapy, KEYTRUDA ® (pembrolizumab) in patients with advanced/metastatic MSS CRC.
The Regulations for the Implementation of the Drug Administration Law was promulgated by the State Council in August 2002, and was last amended in December 2024.
The Regulations for the Implementation of the Drug Administration Law was promulgated by the State Council in August 2002, and was last amended in January 2026.
Royalties, if any, will be payable on a country-by-country and product-by-product basis until the latest of (i) the tenth anniversary of the first commercial sale of such product in such country, (ii) the expiration of the last-to-expire of certain specified patents that cover such product’s composition of matter or method of use as sold in such country or (iii) the expiration of regulatory exclusivity for such product in such country. 117 Table of Contents The Sanofi Agreement will expire upon the termination of all royalty obligations.
Royalties, if any, will be payable on a country-by-country and product-by-product basis until the latest of (i) the tenth anniversary of the first commercial sale of such product in such country, (ii) the expiration of the last-to-expire of certain specified patents that cover such product’s composition of matter or method of use as sold in such country or (iii) the expiration of regulatory exclusivity for such product in such country.
We subsequently investigated this in vivo in a syngeneic mouse tumor model. 110 Table of Contents To compare ADG116’s in vivo antitumor activity to ipilimumab, we utilized a subcutaneous MC38 mouse syngeneic colon cancer model in hCTLA-4, knock-in, or KI, C57BL/6 mice. We selected the hCTLA-4 KI mice as ipilimumab does not cross-react with mouse CTLA-4.
To compare ADG116’s in vivo antitumor activity to ipilimumab, we utilized a subcutaneous MC38 mouse syngeneic colon cancer model in hCTLA-4, knock-in, or KI, C57BL/6 mice. We selected the hCTLA-4 KI mice as ipilimumab does not cross-react with mouse CTLA-4.
We are developing anti-CD28 bispecific POWERbody Ò TCEs enabled by our suite of antibody platform technologies. We have previously published preclinical data showing the scientific rationale for these differentiated programs. See “—IND-Ready Candidates & Preclinical Pipeline”.
We are developing POWERbody Ò TCEs with co-stimulatory signal such as CD28, enabled by our suite of antibody platform technologies. We have previously published preclinical data showing the scientific rationale for these differentiated programs. See “—IND-Ready Candidates & Preclinical Pipeline”.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

70 edited+17 added−6 removed113 unchanged
Investing activities Net cash generated from investing activities was US$1.1 million in 2024, which was primarily attributable to income generated from the company’s short-term investments in certain money market funds during 2024. Net cash used in investing activities was US$0.1 million in 2023, which was primarily attributable to the purchase of property, equipment and software.
Net cash generated from investing activities was US$1.1 million in 2024, which was primarily attributable to income generated from the company’s short-term investments in certain money market funds during 2024. Net cash used in investing activities was US$0.1 million in 2023, which was primarily attributable to the purchase of property, equipment and software.
Financing activities Net cash generated from financing activities was US$3.8 million in 2024, which was mainly attributable to (i) proceeds from borrowings of US$4.9 million, (ii) net proceeds from sale of ADSs of US$7.0 million under the ATM Offering, and (iii) proceeds from share option exercise of US$0.2 million, offset by repayment of borrowings of US$8.3 million.
Net cash generated from financing activities was US$3.8 million in 2024, which was mainly attributable to (i) proceeds from borrowings of US$4.9 million, (ii) net proceeds from sale of ADSs of US$7.0 million under the ATM Offering, and (iii) proceeds from share option exercise of US$0.2 million, offset by repayment of borrowings of US$8.3 million.
See “Item 3 Key Information— Risk Factors—Risks Related to Doing Business in the PRC—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” 158 Table of Contents Critical Accounting Policies and Judgments Basis of presentation Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or U.S.
See “Item 3 Key Information— Risk Factors—Risks Related to Doing Business in the PRC—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” 157 Table of Contents Critical Accounting Policies and Judgments Basis of presentation Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or U.S.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2024 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial condition. 5.E.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2025 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial condition. 5.E.
Dividends payable by an U.S. entity, to non-U.S. resident enterprises shall be subject to 30% withholding tax, unless the respective non-U.S. resident enterprise’s jurisdiction of incorporation has a tax treaty or arrangements with U.S. that provides for a reduced withholding tax rate or an exemption from withholding tax. 157 Table of Contents PRC Our subsidiary in China is incorporated under PRC law and, as such, is subject to PRC enterprise income tax on their taxable income in accordance with the relevant PRC income tax laws.
Dividends payable by an U.S. entity, to non-U.S. resident enterprises shall be subject to 30% withholding tax, unless the respective non-U.S. resident enterprise’s jurisdiction of incorporation has a tax treaty or arrangements with U.S. that provides for a reduced withholding tax rate or an exemption from withholding tax. 156 Table of Contents PRC Our subsidiary in China is incorporated under PRC law and, as such, is subject to PRC enterprise income tax on their taxable income in accordance with the relevant PRC income tax laws.
For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently. 159 Table of Contents Under the criteria of ASC 606, we recognize revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services.
For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently. 158 Table of Contents Under the criteria of ASC 606, we recognize revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services.
No provision for Hong Kong profits tax was made as there were no assessable profits derived from or earnings in Hong Kong for the years ended December 31, 2022, 2023 and 2024. United States Our subsidiary in the U.S., Adagene Incorporated, is incorporated in the U.S. and subject to U.S. federal corporate income tax at a rate of 21%.
No provision for Hong Kong profits tax was made as there were no assessable profits derived from or earnings in Hong Kong for the years ended December 31, 2023, 2024 and 2025. United States Our subsidiary in the U.S., Adagene Incorporated, is incorporated in the U.S. and subject to U.S. federal corporate income tax at a rate of 21%.
Research and development expenses are charged to expense as incurred when these expenditures relate to our research and development services and have no alternative future uses. As of December 31, 2024, we have several ongoing clinical studies in various clinical trial stages. The contracts with CRO and CMO are generally cancellable, with notice, at our option.
Research and development expenses are charged to expense as incurred when these expenditures relate to our research and development services and have no alternative future uses. As of December 31, 2025, we have several ongoing clinical studies in various clinical trial stages. The contracts with CRO and CMO are generally cancellable, with notice, at our option.
This is due to numerous risks and uncertainties associated with developing drugs, including the uncertainty of: ● the scope, rate of progress, results and cost of our clinical trials, preclinical studies and other related activities; 156 Table of Contents ● the cost of manufacturing clinical supplies, and establishing commercial supplies, of any product candidates; ● the number and characteristics of product candidates that we pursue; ● the cost, timing and outcomes of regulatory approvals; ● the cost and timing of establishing sales, marketing and distribution capabilities; and ● the terms and timing of any collaboration, licensing or other arrangements that we may establish, including any required milestone and royalty payments thereunder.
This is due to numerous risks and uncertainties associated with developing drugs, including the uncertainty of: ● the scope, rate of progress, results and cost of our clinical trials, preclinical studies and other related activities; ● the cost of manufacturing clinical supplies, and establishing commercial supplies, of any product candidates; ● the number and characteristics of product candidates that we pursue; ● the cost, timing and outcomes of regulatory approvals; ● the cost and timing of establishing sales, marketing and distribution capabilities; and ● the terms and timing of any collaboration, licensing or other arrangements that we may establish, including any required milestone and royalty payments thereunder.
We did not record any accrued expenses related to cancellation of CRO or CMO contracts as of December 31, 2023 or 2024 as we did not have any plan to cancel the existing CRO or CMO contracts. Income taxes We follow the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes , or ASC 740.
We did not record any accrued expenses related to cancellation of CRO or CMO contracts as of December 31, 2024 or 2025 as we did not have any plan to cancel the existing CRO or CMO contracts. Income taxes We follow the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes , or ASC 740.
Level 3—Unobservable inputs which are supported by little or no market activity. 160 Table of Contents ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach.
Level 3—Unobservable inputs which are supported by little or no market activity. 159 Table of Contents ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach.
Moreover, we expect to incur additional costs associated with operating as a public company, including expenses related to legal, accounting, regulatory, maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, and investor relations. Our principal source of liquidity has been cash generated from the proceeds received from the issuance and sale of our shares.
Moreover, we expect to incur additional costs associated with operating as a public company, including expenses related to legal, accounting, regulatory, maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, and investor relations. 166 Table of Contents Our principal source of liquidity has been cash generated from the proceeds received from the issuance and sale of our shares.
Significant estimates and assumptions reflected in our consolidated financial statements include, but are not limited to, licensing and collaboration revenue recognition, research and development expense allocation, the useful lives and impairment of long-lived assets, tax valuation allowance, share-based compensation expenses and measurement of right-of-use assets and lease liabilities.
Significant estimates and assumptions reflected in our consolidated financial statements include, but are not limited to, licensing and collaboration revenue recognition, research and development expense allocation, the useful lives and impairment of long-lived assets, tax valuation allowance, share-based compensation expenses, measurement of right-of-use assets and lease liabilities, and the fair value of warrant liabilities.
Significant estimates and assumptions reflected in the Group’s consolidated financial statements include, but are not limited to, licensing and collaboration revenue recognition, research and development expense allocation, the useful lives and impairment of long-lived assets, tax valuation allowance, share based compensation expenses, and measurement of right-of-use assets and lease liabilities.
Significant estimates and assumptions reflected in the Group’s consolidated financial statements include, but are not limited to, licensing and collaboration revenue recognition, research and development expense allocation, the useful lives and impairment of long-lived assets, tax valuation allowance, share based compensation expenses, measurement of right-of-use assets and lease liabilities and the fair value of warrant liabilities.
For example, if we are required to conduct additional clinical trials or other testing of any of our product candidates beyond those that are contemplated or if we experience significant delays in enrollment in any clinical trials, we could incur significant additional costs and the clinical development timeline for our product candidates may be delayed. Administrative expenses .
For example, if we are required to conduct additional clinical trials or other testing of any of our product candidates beyond those that are contemplated or if we experience significant delays in enrollment in any clinical trials, we could incur significant additional costs and the clinical development timeline for our product candidates may be delayed. 155 Table of Contents Administrative expenses .
We have forged strategic collaborations with reputable global partners that leverage our technology in multiple approaches at the vanguard of science. 154 Table of Contents We aim to push the boundaries of antibody discovery and engineering through the precise design, construction, and selection of antibody product candidates intractable to traditional antibody technology.
We have forged strategic collaborations with reputable global partners that leverage our technology in multiple approaches at the vanguard of science. We aim to push the boundaries of antibody discovery and engineering through the precise design, construction, and selection of antibody product candidates intractable to traditional antibody technology.
In addition, the subsidiary in Australia received research and development tax incentive in cash from the Australian Taxation Office in the years ended December 31, 2022 and 2023. Such tax incentive was recognized as other income upon receipt as the incentive was not dependent upon having a tax liability and further performance by the Group was not required.
In addition, the subsidiary in Australia received research and development tax incentive in cash from the Australian Taxation Office in the year ended December 31, 2023. Such tax incentive was recognized as other income upon receipt as the incentive was not dependent upon having a tax liability and further performance by the Group was not required.
We anticipate that our expenses will increase significantly in connection with our ongoing activities, as we: ● continue advancement of and investment in our proprietary DPL platform; ● advance the development of ADG126, ADG206 and other preclinical drug candidates; ● continue our ongoing and planned research and development of other lead product candidates; ● discover and develop additional antibody product candidates and further expand our preclinical and clinical product pipeline; ● maintain, expand and protect our intellectual property portfolio; ● expand our collaborations with contract manufacturing organizations and contract research organizations; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; ● establish sales and marketing teams and distribution network to commercialize any product candidate for which we may obtain regulatory approval; ● attract, hire and retain additional clinical, scientific, management and administrative personnel; ● expand our operations globally; and ● incur additional costs associated with operating as a public company. 155 Table of Contents Key Components of Results of Operations Revenue Licensing and collaboration revenue.
We anticipate that our expenses will increase significantly in connection with our ongoing activities, as we: ● continue advancement of and investment in our proprietary DPL platform; 153 Table of Contents ● advance the development of ADG126 and other drug candidates; ● continue our ongoing and planned research and development of other lead product candidates; ● discover and develop additional antibody product candidates and further expand our preclinical and clinical product pipeline; ● maintain, expand and protect our intellectual property portfolio; ● expand our collaborations with contract manufacturing organizations and contract research organizations; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; ● establish sales and marketing teams and distribution network to commercialize any product candidate for which we may obtain regulatory approval; ● attract, hire and retain additional clinical, scientific, management and administrative personnel; ● expand our operations globally; and ● incur additional costs associated with operating as a public company.
Our capital expenditures were US$0.7 million, US$0.1 million and US$34 thousand in 2022, 2023 and 2024, respectively. We intend to fund our future capital expenditures with our existing cash balance. Holding Company Structure Adagene Inc. is a holding company with no material operations of its own.
Our capital expenditures were US$0.1 million, US$34 thousand and US$17 thousand in 2023, 2024 and 2025, respectively. We intend to fund our future capital expenditures with our existing cash balance. Holding Company Structure Adagene Inc. is a holding company with no material operations of its own.
Meanwhile, we are prioritizing and focusing on the development of ADG126, which is currently in Phase 1b/2 dose expansion in combination with pembrolizumab in MSS CRC patients. We also have a robust preclinical pipeline of four programs in IND-enabling studies, including masked T cell engagers, as well as over 50 programs in various stages of discovery.
Meanwhile, we are prioritizing and focusing on the development of ADG126, which is currently in phase 1b/2 and phase 2 clinical development in combination with pembrolizumab in MSS CRC patients. We also have a robust preclinical pipeline of four programs in IND-enabling studies, including masked T cell engagers, as well as over 20 programs in various stages of discovery.
For the year ended December 31, 2022 and 2023, income tax expense was US$0.5 million and US$1.7 million due to taxable profits generated by the U.S. subsidiary, respectively. For the year ended December 31, 2024, income tax benefit was US$18 thousand due to decrease in revenue and application of tax deductions and tax credits.
For the year ended December 31, 2023, income tax expense was US$1.7 million due to taxable profits generated by the U.S. subsidiary. For the years ended December 31, 2024 and 2025, income tax benefit was US$18 thousand and US$0.3 million, respectively, due to decrease in revenue and application of tax deductions and tax credits.
Our licensing and collaboration revenue is currently comprised of upfront and/or milestone payments associated with out-licensing arrangements. Our licensing and collaboration revenue for the years ended December 31, 2022, 2023 and 2024 was primarily derived from granting licenses to use and otherwise exploit certain of our intellectual properties.
Key Components of Results of Operations Revenue Licensing and collaboration revenue. Our licensing and collaboration revenue is currently comprised of upfront and/or milestone payments associated with out-licensing arrangements. Our licensing and collaboration revenue for the years ended December 31, 2023, 2024 and 2025 was primarily derived from granting licenses to use and otherwise exploit certain of our intellectual properties.
The income tax benefit for the year ended December 31, 2024 was primarily attributable to the current tax benefit resulted from the significant decrease of revenue and application of tax deductions and tax credit by Adagene Incorporated, our wholly owned subsidiary in the U.S.
The income tax benefit for the year ended December 31, 2025 was primarily attributable to the current tax benefit resulted from the application of tax deductions and tax credit by Adagene Incorporated, our wholly owned subsidiary in the U.S.
Research and Development, Patents and Licenses, Etc. See “Item 4 Information on the Company—4.C. Business Overview — Our Platform” and “—Intellectual Property.” 5.D.
Research and Development, Patents and Licenses, Etc. See “Item 4 Information on the Company—4.C. Business Overview — Our Platform” and “—Intellectual Property.” 169 Table of Contents 5.D.
Foreign exchange gain (loss), net We recorded foreign exchange gain of US$1.4 million for the year ended December 31, 2023 and foreign exchange loss of US$0.9 million for the year ended December 31, 2024, respectively.
Foreign exchange gain (loss), net We recorded foreign exchange loss of US$0.9 million for the year ended December 31, 2024 and foreign exchange gain of US$1.3 million for the year ended December 31, 2025, respectively.
Non-GAAP Financial Measures Non-GAAP net loss, which is defined as net loss attributable to ordinary shareholders for the year after excluding share-based compensation expenses. The Non-GAAP net loss was US$28.5 million for the year ended December 31, 2024, as compared to US$11.7 million for the year ended December 31, 2023.
Non-GAAP Financial Measures Non-GAAP net loss, which is defined as net loss attributable to ordinary shareholders for the year after excluding share-based compensation expenses. The Non-GAAP net loss was US$13.9 million for the year ended December 31, 2025, as compared to US$28.5 million for the year ended December 31, 2024.
During the year ended December 31, 2024, we completed the sale of an aggregate of 2,504,692 ADSs, representing 3,130,862 ordinary shares, through an at-the-market equity offering program (the “ATM Offering”), under which we received net proceeds of approximately US$7.0 million in 2024.
During the year ended December 31, 2024, we completed the sale of an aggregate of 2,504,692 ADSs, representing 3,130,862 ordinary shares, through an at-the-market equity offering program (the “ATM Offering”), under which we received net proceeds of approximately US$7.0 million in 2024. During the year ended December 31, 2025, no additional capital was raised from the ATM Offering.
We believe that it is more likely than not that these net accumulated operating losses will not be utilized in the near future. Therefore, we have provided full valuation allowances for the deferred tax assets for all subsidiaries as of December 31, 2022, 2023 and 2024.
We have incurred net accumulated operating losses for income tax purposes since our inception. We believe that it is more likely than not that these net accumulated operating losses will not be utilized in the near future. Therefore, we have provided full valuation allowances for the deferred tax assets for all subsidiaries as of December 31, 2023, 2024 and 2025.
Interest and investment income Our interest and investment income was US$3.8 million for the year ended December 31, 2024 as compared to US$4.3 million for the year ended December 31, 2023.
Interest and investment income Our interest and investment income was US$2.3 million for the year ended December 31, 2025 as compared to US$3.8 million for the year ended December 31, 2024.
Management bases the estimates on historical experience and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
Management bases the estimates on historical experience and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could materially differ from those estimates.
Operating and Financial Review and Prospects—5.A Operating Results—Year Ended December 31, 2023 Compared to Year Ended December 31, 2022” beginning on page 156 of our annual report on Form 20-F for the year ended December 31, 2023 filed with the Securities and Exchange Commission on March 29, 2024.
Operating and Financial Review and Prospects—5.A Operating Results—Year Ended December 31, 2024 Compared to Year Ended December 31, 2023” beginning on page 164 of our annual report on Form 20-F for the year ended December 31, 2024 filed with the Securities and Exchange Commission on March 24, 2025.
Non-GAAP net loss per ordinary share for the year ended December 31, 2024 on both basic and diluted basis was US$0.51. Non-GAAP net loss per ordinary share for the year ended December 31, 2023 on both basic and diluted basis was US$0.21.
Non-GAAP net loss per ordinary share for the year ended December 31, 2025 on both basic and diluted basis was US$0.24.
Based on our current operating plan, we believe that our current cash and cash equivalents will be sufficient to meet our current and anticipated working capital requirements and capital expenditures for at least the next 12 months, and expect that our current cash balance will be sufficient to fund operations into the end of 2026.
Based on our current operating plan, we believe that our current cash and cash equivalents will be sufficient to meet our current and anticipated working capital requirements and capital expenditures for at least the next 12 months.
Our net losses were US$80.0 million, US$18.9 million and US$33.4 million for the years ended December 31, 2022, 2023 and 2024, respectively. As of December 31, 2024, we had accumulated deficit of US$311.2 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future.
Our net losses were US$18.9 million, US$33.4 million and US$17.6 million for the years ended December 31, 2023, 2024 and 2025, respectively. As of December 31, 2025, we had accumulated deficit of US$328.8 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future.
This loss of foreign exchange in 2024 was primarily attributable to the appreciation of U.S. dollars against global currencies including Renminbi, Australian dollar and Swiss Franc, which negatively impacted our Australian dollar and Swiss Franc denominated receivable accounts of our subsidiaries, offset by the positive impact of our U.S. dollar denominated accounts receivable of Adagene Suzhou.
This gain of foreign exchange in 2025 was primarily attributable to the depreciation of U.S. dollars against global currencies including Renminbi, Australian dollar and Swiss Franc, which positively impacted our Australian dollar and Swiss Franc denominated receivable accounts of our subsidiaries, offset by the negative impact of our U.S. dollar denominated accounts receivable of Adagene Suzhou.
Research and development expenses The following table sets forth a breakdown of the major components of our research and development expenses in absolute amounts and as a percentage of our total research and development expenses for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ 2023 ​ 2024 ​ US$ % US$ % ​ ​ (in thousands, except percentages) Research and development expenses ​ Payroll and other related costs of personnel ​ 18,492 50.5 % 14,489 50.3 % Costs related to clinical programs ​ 12,264 33.5 % 10,067 35.0 % Costs related to clinical trials ​ 11,162 30.5 % 8,927 31.0 % CMC and toxicology costs associated with the clinical programs ​ 1,102 3.0 % 1,140 4.0 % Costs related to preclinical testing of non-clinical programs ​ 978 2.7 % 396 1.4 % Costs required to develop the product candidates ​ 1,449 4.0 % 948 3.3 % Other research and development expenses ​ 3,456 ​ 9.4 % 2,881 ​ 10.0 % Total ​ 36,639 ​ 100.0 % 28,781 ​ 100.0 % ​ Our research and development expenses decreased by 21.4% from US$36.6 million for the year ended December 31, 2023 to US$28.8 million for the year ended December 31, 2024, reflecting clinical focus on and prioritization of the company’s masked, anti-CTLA-4 SAFEbody ADG126.
Research and development expenses The following table sets forth a breakdown of the major components of our research and development expenses in absolute amounts and as a percentage of our total research and development expenses for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ 2024 ​ 2025 ​ ​ ​ ​ US$ ​ ​ ​ % ​ ​ ​ US$ ​ ​ ​ % ​ ​ (in thousands, except percentages) Research and development expenses ​ ​ ​ ​ ​ Payroll and other related costs of personnel ​ 14,489 50.3 % 11,494 52.2 % Costs related to clinical programs ​ 10,067 35.0 % 6,683 30.3 % Costs related to clinical trials ​ 8,927 31.0 % 5,480 24.9 % CMC and toxicology costs associated with the clinical programs ​ 1,140 4.0 % 1,203 5.4 % Costs related to preclinical testing of non-clinical programs ​ 396 1.4 % 348 1.6 % Costs required to develop the product candidates ​ 948 3.3 % 722 3.3 % Other research and development expenses ​ 2,881 ​ 10.0 % 2,787 ​ 12.6 % Total ​ 28,781 ​ 100.0 % 22,034 ​ 100.0 % ​ Our research and development expenses decreased by 23.4% from US$28.8 million for the year ended December 31, 2024 to US$22.0 million for the year ended December 31, 2025, reflecting clinical focus on and prioritization of the company’s masked, anti-CTLA-4 SAFEbody ADG126.
The following table summarizes our research and development expenses for our clinical-stage product candidates, preclinical product candidates and research pipeline for the years ended December 31, 2022, 2023 and 2024, respectively. ​ ​ ​ ​ ​ ​ ​ ​ For the Year ​ ​ Ended ​ ​ December 31, ​ ​ 2022 2023 2024 ​ ​ US$ ​ US$ ​ US$ ​ ​ (in thousands) Direct research and development expenses: ​ ​ ADG126 ​ 12,363 ​ 8,362 ​ 8,297 ADG116 ​ 9,818 ​ 2,317 ​ 1,079 ADG106 2,960 886 164 Preclinical product candidates, research pipeline and others 23,896 1,549 859 Total direct research and development expenses 49,037 13,114 10,399 Indirect research and development expenses: ​ ​ ​ ​ ​ ​ Payroll and other related costs of personnel ​ 24,093 ​ 18,492 ​ 14,489 Lab supplies and other research and development expenses ​ 8,210 ​ 5,033 ​ 3,893 Total indirect research and development expenses 32,303 23,525 18,382 Total research and development expenses 81,340 36,639 28,781 ​ At this time, we cannot reasonably estimate the nature, timing and estimated costs of the efforts that will be necessary to complete the development of, or the period, if any, in which material net cash inflows may commence from, any of our product candidates.
The following table summarizes our research and development expenses for our clinical-stage product candidates, preclinical product candidates and research pipeline for the years ended December 31, 2023, 2024 and 2025, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year ​ ​ Ended ​ ​ December 31, ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ US$ ​ US$ ​ US$ ​ ​ (in thousands) Direct research and development expenses: ​ ​ ADG126 ​ 8,362 ​ 8,297 ​ 6,043 ADG116 ​ 2,317 ​ 1,079 ​ 60 ADG106 886 164 64 Preclinical product candidates, research pipeline and others 1,549 859 795 Total direct research and development expenses 13,114 10,399 6,962 Indirect research and development expenses: ​ ​ ​ ​ ​ ​ Payroll and other related costs of personnel ​ 18,492 ​ 14,489 ​ 11,494 Lab supplies and other research and development expenses ​ 5,033 ​ 3,893 ​ 3,578 Total indirect research and development expenses 23,525 18,382 15,072 Total research and development expenses 36,639 28,781 22,034 ​ At this time, we cannot reasonably estimate the nature, timing and estimated costs of the efforts that will be necessary to complete the development of, or the period, if any, in which material net cash inflows may commence from, any of our product candidates.
To date, we have not made any material adjustments to our prior estimates of research and development expenses. 170 Table of Contents Share based compensation Share-based compensation awards are measured at the grant date fair value of the awards and recognized as expenses a) immediately at the grant date if no vesting conditions are required; b) for share-based awards granted with only service conditions, using the straight-line method over the vesting period; or c) for share-based awards granted with service conditions and performance conditions, using the graded vesting method over the vesting period if and when the we conclude that it is probable that the performance conditions will be achieved.
Share based compensation Share-based compensation awards are measured at the grant date fair value of the awards and recognized as expenses a) immediately at the grant date if no vesting conditions are required; b) for share-based awards granted with only service conditions, using the straight-line method over the vesting period; or c) for share-based awards granted with service conditions and performance conditions, using the graded vesting method over the vesting period if and when the we conclude that it is probable that the performance conditions will be achieved.
Actual results could materially differ from those estimates. 169 Table of Contents Certain of these estimates are considered critical as they involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our consolidated financial statements. Our critical accounting estimates are summarized below.
Certain of these estimates are considered critical as they involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our consolidated financial statements. Our critical accounting estimates are summarized below.
The operating results in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ 2022 2023 2024 ​ ​ US$ ​ US$ ​ US$ ​ ​ (in thousands, except per share information) ​ ​ ​ ​ ​ ​ ​ Revenue: Licensing and collaboration revenue 9,293 18,111 103 Operating expenses and income: ​ ​ ​ Research and development expenses (81,340) (36,639) (28,781) Administrative expenses (11,874) (8,673) (7,274) Other operating income, net — 3,481 — Loss from operations (83,921) (23,720) (35,952) Interest income 378 4,283 3,801 Interest expense (693) (1,108) (852) Other income, net 2,168 1,844 467 Foreign exchange gain (loss), net 2,555 1,446 (906) Loss before income tax (79,513) (17,255) (33,442) Income tax benefit (expense) (459) (1,691) 18 Net loss attributable to Adagene Inc.’s shareholders (79,972) (18,946) (33,424) Other comprehensive income (loss): ​ Foreign currency translation adjustments, net of nil tax (755) (951) 1,273 Total comprehensive loss attributable to Adagene Inc.’s shareholders (80,727) (19,897) (32,151) Net loss attributable to Adagene Inc.’s shareholders (79,972) (18,946) (33,424) Net loss attributable to ordinary shareholders (79,972) (18,946) (33,424) Weighted average number of ordinary shares used in per share calculation: ​ —Basic 54,135 54,738 56,288 —Diluted 54,135 54,738 56,288 Net loss per ordinary share ​ ​ ​ —Basic (1.48) (0.35) (0.59) —Diluted (1.48) (0.35) (0.59) ​ 163 Table of Contents Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Licensing and collaboration revenue Our licensing and collaboration revenue was US$0.1 million for the year ended December 31, 2024, compared to US$18.1 million for the year ended December 31, 2023.
The operating results in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ US$ ​ US$ ​ US$ ​ ​ (in thousands, except per share information) ​ ​ ​ ​ ​ ​ ​ Revenue: ​ ​ ​ Licensing and collaboration revenue 18,111 103 7,671 Operating expenses and income: ​ ​ ​ Research and development expenses (36,639) (28,781) (22,034) Administrative expenses (8,673) (7,274) (7,076) Other operating income, net 3,481 — — Loss from operations (23,720) (35,952) (21,439) Interest and investment income 4,283 3,801 2,304 Interest expense (1,108) (852) (463) Other income, net 1,844 467 324 Foreign exchange gain (loss), net 1,446 (906) 1,318 Change in fair value of warrant liabilities — — 48 Loss before income tax (17,255) (33,442) (17,908) Income tax benefit (expense) (1,691) 18 298 Net loss attributable to Adagene Inc.’s shareholders (18,946) (33,424) (17,610) Other comprehensive income (loss): ​ ​ ​ Foreign currency translation adjustments, net of nil tax (951) 1,273 (1,387) Total comprehensive loss attributable to Adagene Inc.’s shareholders (19,897) (32,151) (18,997) Net loss attributable to Adagene Inc.’s shareholders (18,946) (33,424) (17,610) Net loss attributable to ordinary shareholders (18,946) (33,424) (17,610) Weighted average number of ordinary shares used in per share calculation: ​ ​ ​ —Basic 54,738 56,288 59,006 —Diluted 54,738 56,288 59,006 Net loss per ordinary share ​ ​ ​ —Basic (0.35) (0.59) (0.30) —Diluted (0.35) (0.59) (0.30) ​ 163 Table of Contents Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Licensing and collaboration revenue Our licensing and collaboration revenue was US$7.7 million for the year ended December 31, 2025, compared to US$0.1 million for the year ended December 31, 2024.
The assumptions used to estimate the fair value of the share options granted are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2022 2023 2024 ​ ​ ​ ​ ​ ​ ​ ​ Risk-free interest rate 1.92% - 4.25 % 3.38% - 4.86 % 4.18% – 4.59 % Dividend yield 0 % 0 % 0 % Expected volatility range 74.2% - 74.9 % 72.6% - 73.1 % 73.3% – 75.6 % Exercise multiple 2.2 – 2.8 2.2 – 2.8 ​ 2.2 – 2.8 ​ Contractual life 10 years 10 years ​ 10 years ​ ​ Borrowings Borrowings are recognized initially at fair value, net of transaction costs incurred.
Our management is ultimately responsible for the determination of the estimated fair value of its ordinary shares. 161 Table of Contents The assumptions used to estimate the fair value of the share options granted are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ Risk-free interest rate 3.38% - 4.86 % 4.18% – 4.59 % 4.22% – 4.49 % Dividend yield 0 % 0 % 0 % Expected volatility range 72.6% - 73.1 % 73.3% – 75.6 % 76.4% – 77.2 % Exercise multiple 2.2 – 2.8 2.2 – 2.8 ​ 2.2 – 2.8 ​ Contractual life 10 years 10 years ​ 10 years ​ ​ Borrowings Borrowings are recognized initially at fair value, net of transaction costs incurred.
We believe that non-GAAP net loss and non-GAAP net loss per ordinary share for the year provide useful information about our results of operations, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its management in our financial and operational decision-making. 165 Table of Contents Non-GAAP net loss and non-GAAP net loss per ordinary share 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.
We believe that non-GAAP net loss and non-GAAP net loss per ordinary share for the year provide useful information about our results of operations, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its management in our financial and operational decision-making.
The 2024 net loss was higher due to significant decrease in licensing and collaboration revenue recognized contracts with customers, offset by decreases in both research and development expenses and administrative expenses. Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 See “Item 5.
The 2025 net loss was lower due to combined impact of significant increase in licensing and collaboration revenue recognized from collaobartion and technology licensing contracts with customers, and decreases in both research and development expenses and administrative expenses. Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 See “Item 5.
The difference between our net loss of US$80.0 million and the net cash used in operating activities was mainly due to (i) an increase in prepayments and other current assets of US$0.9 million, (ii) a decrease in accruals and other current liabilities of US$0.8 million, (iii) a decrease in income tax payable of US$1.7 million as income tax was paid, and (iv) a decrease in lease liabilities of US$0.3 million given adoption of ASC 842, offset by (i) non-cash share-based compensation expenses of US$10.5 million, (ii) a decrease of accounts receivable of US$3.0 million given receipt of milestone payment from Exelixis, Inc., (iii) a decrease in amounts due from related parties of US$3.9 million, (iv) an increase of accounts payable of US$0.3 million, (v) an increase in contract liabilities of US$9.6 million given receipt of upfront fee from Sanofi, (vi) an increase in amount due to related parties of US$8.9 million, (vii) depreciation and amortization of US$1.1 million, and (viii) amortization of right-of use assets and interest of lease liabilities of US$0.3 million.
The difference between our net loss of US$17.6 million and the net cash used in operating activities was mainly due to (i) income from short-term investments of US$0.5 million, (ii) an increase in prepayments and other current assets of US$0.3 million, (iii) a decrease in accounts payable of US$1.4 million, (iv) a decrease in amount due to related parties of US$2.8 million as a result of payments made to the related parties, and (v) a decrease in lease liabilities of US$0.2 million, offset by (i) non-cash share-based compensation expenses of US$3.7 million, (ii) an increase in contract liabilities of US$3.5 million due to option payment from Sanofi and upfront payment from Exelixis, (iii) depreciation and amortization of US$0.4 million, and (iv) amortization of right-of use assets and interest of lease liabilities of US$0.2 million.
As of December 31, 2024, we had US$85.2 million in cash and cash equivalents. 166 Table of Contents We intend to finance our future working capital requirements and capital expenditures primarily from funds raised from financing activities, including the net proceeds received from our initial public offering and our ATM Offering program, future public and private offerings of our securities, proceeds from our collaborations, and/or proceeds from borrowings.
We intend to finance our future working capital requirements and capital expenditures primarily from funds raised from financing activities, including the net proceeds received from our initial public offering and our ATM Offering program, future public and private offerings of our securities, proceeds from our collaborations, and/or proceeds from borrowings.
Net cash used in financing activities was US$5.4 million in 2023, which was mainly attributable to repayment of borrowings of US$13.5 million, offset by proceeds from borrowings of US$8.1 million.
Net cash used in financing activities was US$5.4 million in 2023, which was mainly attributable to repayment of borrowings of US$13.5 million, offset by proceeds from borrowings of US$8.1 million. Capital Expenditures Our capital expenditures are incurred primarily in connection with research and development equipment.
This decrease was primarily attributable to decrease in both interest rate and the amount of term deposits placed. 164 Table of Contents Other income, net Our other income, net decreased from US$1.8 million for the year ended December 31, 2023 to US$0.5 million for the year ended December 31, 2024, primarily attributable to decrease in government subsidies received by Adagene Suzhou to support our ongoing operations in Jiangsu Province during the year ended December 31, 2024 and decrease in the research and development tax incentive in cash from the Australian Taxation Office received by Adagene Australia Pty Ltd, our wholly-owned subsidiary in Australia.
This decrease was primarily attributable to decrease in both interest rate and the amount of short-term investments placed. 164 Table of Contents Other income, net Our other income, net decreased from US$0.5 million for the year ended December 31, 2024 to US$0.3 million for the year ended December 31, 2025, primarily attributable to decrease in government subsidies received by Adagene Suzhou to support our ongoing operations in Jiangsu Province during the year ended December 31, 2025.
Reconciliation of GAAP and Non-GAAP Results ​ ​ ​ ​ ​ ​ ​ ​ For the years ended ​ ​ December 31, ​ ​ 2022 2023 2024 ​ ​ US$ ​ US$ ​ US$ GAAP net loss attributable to ordinary shareholders ​ (79,971,847) ​ (18,946,370) ​ (33,424,111) Add back: ​ ​ ​ ​ ​ Share-based compensation expense 10,520,282 ​ 7,271,700 ​ 4,909,573 Non-GAAP net loss attributable to ordinary shareholders (69,451,565) ​ (11,674,670) ​ (28,514,538) Weighted average number of ordinary shares used in per share calculation: ​ ​ ​ ​ ​ —Basic 54,135,084 ​ 54,737,530 ​ 56,287,903 —Diluted 54,135,084 ​ 54,737,530 ​ 56,287,903 Non-GAAP net loss per ordinary share ​ ​ ​ ​ ​ —Basic (1.28) ​ (0.21) ​ (0.51) —Diluted (1.28) ​ (0.21) ​ (0.51) ​ ​ ​ 5.B.
Reconciliation of GAAP and Non-GAAP Result ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended ​ ​ December 31, ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ US$ ​ US$ ​ US$ GAAP net loss attributable to ordinary shareholders ​ (18,946,370) ​ (33,424,111) ​ (17,609,413) Add back: ​ ​ ​ ​ ​ Share-based compensation expense 7,271,700 ​ 4,909,573 ​ 3,741,548 Non-GAAP net loss attributable to ordinary shareholders (11,674,670) ​ (28,514,538) ​ (13,867,865) Weighted average number of ordinary shares used in per share calculation: ​ ​ ​ ​ ​ —Basic 54,737,530 ​ 56,287,903 ​ 59,006,129 —Diluted 54,737,530 ​ 56,287,903 ​ 59,006,129 Net loss per ordinary share ​ ​ ​ ​ ​ ​ —Basic ​ (0.35) ​ (0.59) ​ (0.30) —Diluted (0.35) ​ (0.59) ​ (0.30) Non-GAAP net loss per ordinary share ​ ​ ​ ​ ​ —Basic (0.21) ​ (0.51) ​ (0.24) —Diluted (0.21) ​ (0.51) ​ (0.24) ​ ​ ​ 5.B.
Our research and development expenses may vary substantially from period to period according to the status of our research and development activities. The timing of expenses is impacted by the commencement of clinical trials and enrollment of patients in clinical trials. The successful development of our product candidates is uncertain.
The timing of expenses is impacted by the commencement of clinical trials and enrollment of patients in clinical trials. The successful development of our product candidates is uncertain.
Administrative expenses Our administrative expenses decreased by 16.1% from US$8.7 million for the year ended December 31, 2023 to US$7.3 million for the year ended December 31, 2024, due to both a reduction in personnel and in office-related expenses as a result of cost-control measures.
Administrative expenses Our administrative expenses decreased by 2.7% from US$7.3 million for the year ended December 31, 2024 to US$7.1 million for the year ended December 31, 2025, as a result of cost-control measures.
Loss from operations As a result of the foregoing, our loss from operations increased by 51.6% from US$23.7 million for the year ended December 31, 2023 to US$36.0 million for the year ended December 31, 2024.
Loss from operations As a result of the foregoing, our loss from operations decreased by 40.4% from US$36.0 million for the year ended December 31, 2024 to US$21.4 million for the year ended December 31, 2025.
Net loss attributable to Adagene Inc.’s shareholders Our net loss for the year increased by 76.4% from US$18.9 million for the year ended December 31, 2023 to US$33.4 million for the year ended December 31, 2024.
Net loss attributable to Adagene Inc.’s shareholders Our net loss for the year decreased by 47.3% from US$33.4 million for the year ended December 31, 2024 to US$17.6 million for the year ended December 31, 2025.
Results of Operations The following table summarizes our consolidated results of operations for the periods presented. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report.
This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report.
The following table presents our selected consolidated cash flow data for the years ended December 31, 2022, 2023 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ 2022 2023 2024 ​ ​ US$ ​ US$ ​ US$ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ Net cash used in operating activities (48,612) ​ (28,455) ​ (29,701) Net cash generated from (used in) investing activities (686) ​ (77) ​ 1,110 Net cash generated from (used in) financing activities 17,823 ​ (5,367) ​ 3,769 Effect of exchange rate on cash and cash equivalents 843 ​ 74 ​ 83 Net decrease in cash and cash equivalents (30,632) ​ (33,825) ​ (24,739) Cash and cash equivalents at the beginning of year 174,391 ​ 143,759 ​ 109,934 Cash and cash equivalents at the end of year 143,759 ​ 109,934 ​ 85,195 ​ 167 Table of Contents Operating activities Net cash used in operating activities was US$29.7 million in 2024.
The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future. 167 Table of Contents The following table presents our selected consolidated cash flow data for the years ended December 31, 2023, 2024 and 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ US$ ​ US$ ​ US$ Net cash used in operating activities (28,455) ​ (29,701) ​ (15,657) Net cash generated from (used in) investing activities (77) ​ 1,110 ​ 477 Net cash generated from (used in) financing activities (5,367) ​ 3,769 ​ 4,445 Effect of exchange rate on cash and cash equivalents 74 ​ 83 ​ 64 Net decrease in cash and cash equivalents (33,825) ​ (24,739) ​ (10,671) Cash and cash equivalents at the beginning of year 143,759 ​ 109,934 ​ 85,195 Cash and cash equivalents at the end of year 109,934 ​ 85,195 ​ 74,524 ​ Operating activities Net cash used in operating activities was US$15.7 million in 2025.
We have a history of contracting with third parties that perform various preclinical and clinical trial activities on behalf of us during the ongoing research and development process. Expenses related to preclinical and clinical trials are accrued based on our estimates of the actual services performed by the third parties for the respective period.
Preclinical and clinical trial costs are a significant component of our research and development expenses. We have a history of contracting with third parties that perform various preclinical and clinical trial activities on behalf of us during the ongoing research and development process.
We recognize in the consolidated financial statements the benefit of a tax position which is “more likely than not” to be sustained under examination based solely on the technical merits of the position assuming a review by tax authorities having all relevant information.
We evaluate our uncertain tax positions using the provisions of ASC 740, which prescribes a recognition threshold that a tax position is required to meet before being recognized in the consolidated financial statements. 160 Table of Contents We recognize in the consolidated financial statements the benefit of a tax position which is “more likely than not” to be sustained under examination based solely on the technical merits of the position assuming a review by tax authorities having all relevant information.
However, approval from or registration with competent government authorities is required where the Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future.
However, registration with competent authorities or completion of applicable bank procedures is required where the Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.
Tax positions that meet the recognition threshold are measured using a cumulative probability approach, at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement.
Tax positions that meet the recognition threshold are measured using a cumulative probability approach, at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. It is our policy to recognize interest and penalties related to unrecognized tax benefits, if any, as a component of income tax expense.
We use non-GAAP net loss and non-GAAP net loss per ordinary share for the year, which are non-GAAP financial measures, in evaluating our operating results and for financial and operational decision-making purposes.
Non-GAAP net loss per ordinary share for the year ended December 31, 2024 on both basic and diluted basis was US$0.51. 165 Table of Contents We use non-GAAP net loss and non-GAAP net loss per ordinary share for the year, which are non-GAAP financial measures, in evaluating our operating results and for financial and operational decision-making purposes.
Net cash used in operating activities was US$48.6 million in 2022.
Net cash used in operating activities was US$29.7 million in 2024.
Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the consolidated statements of comprehensive loss over the period of the borrowings using the effective interest method. 162 Table of Contents Recent accounting pronouncements A list of recent relevant accounting pronouncements is included in Note 2 “Summary of Significant Accounting Policies” to our consolidated financial statements included elsewhere in this annual report.
Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the consolidated statements of comprehensive loss over the period of the borrowings using the effective interest method.
Indirect research and development expenses have not been allocated directly to each program, and primarily consist of costs to compensate personnel, overhead and infrastructure costs to maintain our facilities, and other costs related to activities that benefit multiple projects.
Indirect research and development expenses have not been allocated directly to each program, and primarily consist of costs to compensate personnel, overhead and infrastructure costs to maintain our facilities, and other costs related to activities that benefit multiple projects. 154 Table of Contents For the years ended December 31, 2023, 2024 and 2025, our research and development expenses were US$36.6 million, US$28.8 million and US$22.0 million, respectively.
Research and development expenses Elements of research and development expenses primarily include (1) payroll and other related costs of personnel engaged in research and development activities, (2) costs related to pre-clinical testing of our technologies under development and clinical trials such as payments to contract research organizations, or CRO, and contract manufacturing organizations, or CMO, investigators and clinical trial sites that conduct the clinical studies; (3) costs to develop the product candidates, including raw materials and supplies, product testing, depreciation and amortization, and facility related expenses, (4) other research and development expenses.
The assumptions used to estimate the fair value of the share options granted are as follows: ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, 2025 Risk‑free interest rate 3.51% - 3.52 % Exercise price per ordinary share US$4.00 ​ Expected volatility range 59.60% - 60.05 % Term of warrants 2.5 ‑ 2.7 years ​ Dividend yield 0 % ​ Research and development expenses Elements of research and development expenses primarily include (1) payroll and other related costs of personnel engaged in research and development activities, (2) costs related to pre-clinical testing of our technologies under development and clinical trials such as payments to contract research organizations, or CRO, and contract manufacturing organizations, or CMO, investigators and clinical trial sites that conduct the clinical studies; (3) costs to develop the product candidates, including raw materials and supplies, product testing, depreciation and amortization, and facility related expenses, (4) other research and development expenses.
The Group also made short-term investments in certain money market funds during 2023. Net cash used in investing activities was US$0.7 million in 2022, which was primarily attributable to the purchase of property, equipment and software.
Investing activities Net cash generated from investing activities was US$0.5 million in 2025, which was primarily attributable to income generated from the company’s short-term investments in certain money market funds during 2025.
The actual benefits ultimately realized may differ from our estimates. The assessment of the deferred tax assets as well as related valuation allowance is disclosed in Note 10 to our consolidated financial statements included elsewhere in this annual report. ​
The assessment of the deferred tax assets as well as related valuation allowance is disclosed in Note 12 to our consolidated financial statements included elsewhere in this annual report. 171 Table of Contents Warrant liabilities The warrants are freestanding instruments and classified as liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity .
Changes in assumptions or estimates can materially affect the revenue recognized. The assessment and conclusion reached for revenue recognition are disclosed in Note 9 to our consolidated financial statements included elsewhere in this annual report.
These inputs are evaluated periodically considering historical actuals and management judgement. Changes in assumptions or estimates can materially affect the fair value of the warrant liabilities. The assumptions and models used for estimating fair value of the warrant liabilities are disclosed in Note 10 to our consolidated financial statements included elsewhere in this annual report. ​
For the years ended December 31, 2022, 2023 and 2024, our research and development expenses were US$81.3 million, US$36.6 million and US$28.8 million, respectively. The decrease of approximately 55.0% in 2023 and decrease of approximately 21.4% in 2024 reflect continued clinical focus on and prioritization of the company’s masked, anti-CTLA-4 SAFEbody ADG126.
The decrease of approximately 21.4% in 2024 and decrease of approximately 23.4% in 2025 reflect continued clinical focus on and prioritization of the company’s masked, anti-CTLA-4 SAFEbody ADG126. Our research and development expenses may vary substantially from period to period according to the status of our research and development activities.
Research and Development Expenses Research and development expenses are charged to expense as incurred when these expenditures relate to our research and development services and have no alternative future uses. Preclinical and clinical trial costs are a significant component of our research and development expenses.
The assessment and conclusion reached for revenue recognition are disclosed in Note 11 to our consolidated financial statements included elsewhere in this annual report. 170 Table of Contents Research and Development Expenses Research and development expenses are charged to expense as incurred when these expenditures relate to our research and development services and have no alternative future uses.
Income tax benefit (expense) Our income tax expense was US$1.7 million for the year ended December 31, 2023 as compared to income tax benefit of US$18 thousand for the year ended December 31, 2024.
See Note 10 to our consolidated financial statements included elsewhere in this annual report. Income tax benefit (expense) Our income tax benefit was US$17,553 and US$0.3 million for the year ended December 31, 2024 and 2025, respectively.
Net cash generated from financing activities was US$17.8 million in 2022, which was mainly attributable to proceeds from borrowings of US$25.8 million, offset by (i) repayment of borrowings of US$4.4 million, and (ii) purchase of treasury shares under stock repurchase program of US$4.0 million. 168 Table of Contents Capital Expenditures Our capital expenditures are incurred primarily in connection with research and development equipment.
The Group also made short-term investments in certain money market funds during 2023. 168 Table of Contents Financing activities Net cash generated from financing activities was US$4.4 million in 2025, which was mainly attributable to (i) proceeds from borrowings of US$5.6 million, and (ii) net proceeds from issuance of the series A non-voting contingently redeemable convertible preferred shares of US$16.6 million from strategic investment made by Sanofi B.V., offset by repayment of borrowings of US$17.9 million.
Removed
The carrying amount of long-term borrowings approximate their fair values since they bear interest rates which approximate market interest rates. We did not transfer any assets or liabilities in or out of Level 3 during the year ended December 31, 2023 or 2024.
Added
The carrying amount of long-term borrowings approximate their fair values since they bear interest rates which approximate market interest rates. The Group has issued warrants to purchase its ordinary shares. The warrants are freestanding instruments and classified as liabilities. The Group measured its warrant liabilities at fair value on a recurring basis.
Removed
We had no financial assets and liabilities measured and recorded at fair value on a nonrecurring basis as of December 31, 2023 and 2024.
Added
As the Group’s warrants are not traded in an active market with readily observable prices, the Group uses significant unobservable inputs to measure the fair value of warrant liabilities. These instruments are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement.
Removed
We evaluate our uncertain tax positions using the provisions of ASC 740, which prescribes a recognition threshold that a tax position is required to meet before being recognized in the consolidated financial statements.
Added
Contingently redeemable convertible preferred shares The Series A non-voting contingently redeemable convertible preferred shares (the “Series A Preferred Shares”) are classified as mezzanine equity in the consolidated balance sheets because they are contingently redeemable upon the occurrence of an event outside of the company’s control.
Removed
It is our policy to recognize interest and penalties related to unrecognized tax benefits, if any, as a component of income tax expense. 161 Table of Contents We have incurred net accumulated operating losses for income tax purposes since our inception.
Added
The Preferred Shares are recorded at their respective issuance date fair value, net of issuance cost. The Company concluded that the Series A Preferred Shares were not currently redeemable, and were not probable to become redeemable as of December 31, 2025.
Removed
Our management is ultimately responsible for the determination of the estimated fair value of its ordinary shares.
Added
Consequently, no accretion charge was recorded as the redemption value was fixed to original issue price for the year ended December 31, 2025.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

60 edited+20 added−23 removed107 unchanged
Mr. Cheung has served as an independent non-executive director of Hua Medicine (HKEX:2552) since January 2023, an independent non-executive director of CanSino Biologics Inc. (HKEX:6185, SSE STAR MARKET:688185) since February 2024 and as an independent non-executive director of GenScript Biotech Corporation (HKEX:1548) since April 2024. Mr. Cheung served as an independent director of JW (Cayman) Therapeutics Co. Ltd.
Cheung has served as an independent non-executive director of Hua Medicine (HKEX:2552) since January 2023, an independent non-executive director of CanSino Biologics Inc. (HKEX:6185, SSE STAR MARKET:688185) since February 2024 and as an independent non-executive director of GenScript Biotech Corporation (HKEX:1548) since April 2024. Mr. Cheung served as an independent director of JW (Cayman) Therapeutics Co. Ltd.
The audit committee is responsible for, among other things: ● reviewing and recommending to our board for approval, the appointment, re-appointment or removal of the independent auditor, after considering its annual performance evaluation of the independent auditor; ● approving the remuneration and terms of engagement of the independent auditor and pre-approving all auditing and non-auditing services permitted to be performed by our independent auditors at least annually; ● obtaining a written report from our independent auditor describing matters relating to its independence and quality control procedures; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; 181 Table of Contents ● discussing with our independent auditor, among other things, the audits of the financial statements, including whether any material information should be disclosed, issues regarding accounting and auditing principles and practices; ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● reviewing and recommending the semi-annually financial data the annual financial statements to our board for inclusion in our semi-annually earnings releases and annual reports, respectively; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any special steps taken to monitor and control major financial risk exposures; ● at least annually, reviewing and reassessing the adequacy of the committee charter; ● approving annual audit plans, and undertaking an annual performance evaluation of the internal audit function; ● establishing and overseeing procedures for the handling of complaints and whistleblowing; ● meeting separately and periodically with management and the independent registered public accounting firm; ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and ● reporting regularly to the board.
The audit committee is responsible for, among other things: ● reviewing and recommending to our board for approval, the appointment, re-appointment or removal of the independent auditor, after considering its annual performance evaluation of the independent auditor; ● approving the remuneration and terms of engagement of the independent auditor and pre-approving all auditing and non-auditing services permitted to be performed by our independent auditors at least annually; ● obtaining a written report from our independent auditor describing matters relating to its independence and quality control procedures; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; 182 Table of Contents ● discussing with our independent auditor, among other things, the audits of the financial statements, including whether any material information should be disclosed, issues regarding accounting and auditing principles and practices; ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● reviewing and recommending the semi-annually financial data the annual financial statements to our board for inclusion in our semi-annually earnings releases and annual reports, respectively; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any special steps taken to monitor and control major financial risk exposures; ● at least annually, reviewing and reassessing the adequacy of the committee charter; ● approving annual audit plans, and undertaking an annual performance evaluation of the internal audit function; ● establishing and overseeing procedures for the handling of complaints and whistleblowing; ● meeting separately and periodically with management and the independent registered public accounting firm; ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and ● reporting regularly to the board.
The compensation committee is responsible for, among other things: ● overseeing the development and implementation of compensation programs in consultation with our management; ● at least annually, reviewing and approving, or recommending to the board for its approval, the compensation for our executive officers; ● at least annually, reviewing and recommending to the board for determination with respect to the compensation of our non-executive directors; ● at least annually, reviewing periodically and approving any incentive compensation or equity plans, programs or other similar arrangements; ● reviewing executive officer and director indemnification and insurance matters; ● overseeing our regulatory compliance with respect to compensation matters, including our policies on restrictions on compensation plans and loans to directors and executive officers; ● at least annually, reviewing and reassessing the adequacy of the committee charter; 182 Table of Contents ● selecting compensation consultant, legal counsel or other advisor only after taking into consideration all factors relevant to that person’s independence from management; and ● reporting regularly to the board.
The compensation committee is responsible for, among other things: ● overseeing the development and implementation of compensation programs in consultation with our management; ● at least annually, reviewing and approving, or recommending to the board for its approval, the compensation for our executive officers; ● at least annually, reviewing and recommending to the board for determination with respect to the compensation of our non-executive directors; ● at least annually, reviewing periodically and approving any incentive compensation or equity plans, programs or other similar arrangements; ● reviewing executive officer and director indemnification and insurance matters; ● overseeing our regulatory compliance with respect to compensation matters, including our policies on restrictions on compensation plans and loans to directors and executive officers; ● at least annually, reviewing and reassessing the adequacy of the committee charter; 183 Table of Contents ● selecting compensation consultant, legal counsel or other advisor only after taking into consideration all factors relevant to that person’s independence from management; and ● reporting regularly to the board.
The plan administrator has broad authority to: ● select participants and determine the types of awards that they are to receive; ● determine the number of shares that are to be subject to awards and the terms and conditions of awards, including the price (if any) to be paid for the shares or the award and establish the vesting conditions (if applicable) of such shares or awards; ● cancel, modify or waive our rights with respect to, or modify, discontinue, suspend or terminate any or all outstanding awards, subject to any required consents; ● construe and interpret the terms of the 2021 Plan and any agreements relating to the plan; ● accelerate or extend the vesting or exercisability or extend the term of any or all outstanding awards subject to any required consent; ● subject to the other provisions of the 2021 Plan, make certain adjustments to one or more outstanding awards (including a repricing of the exercise or base price of any outstanding option or share appreciation right without shareholder approval) and authorize the termination, conversion, substitution or succession of awards; and ● allow the purchase price of an award or our ordinary shares to be paid in the form of cash, check or electronic funds transfer, by the delivery of previously-owned ordinary shares or by a reduction of the number of shares deliverable pursuant to the award, by services rendered by the recipient of the award, by notice and third party payment or cashless exercise on such terms as the plan administrator may authorize or any other form permitted by law.
The plan administrator has broad authority to: ● select participants and determine the types of awards that they are to receive; ● determine the number of shares that are to be subject to awards and the terms and conditions of awards, including the price (if any) to be paid for the shares or the award and establish the vesting conditions (if applicable) of such shares or awards; ● cancel, modify or waive our rights with respect to, or modify, discontinue, suspend or terminate any or all outstanding awards, subject to any required consents; ● construe and interpret the terms of the 2021 Plan and any agreements relating to the plan; ● accelerate or extend the vesting or exercisability or extend the term of any or all outstanding awards subject to any required consent; 178 Table of Contents ● subject to the other provisions of the 2021 Plan, make certain adjustments to one or more outstanding awards (including a repricing of the exercise or base price of any outstanding option or share appreciation right without shareholder approval) and authorize the termination, conversion, substitution or succession of awards; and ● allow the purchase price of an award or our ordinary shares to be paid in the form of cash, check or electronic funds transfer, by the delivery of previously-owned ordinary shares or by a reduction of the number of shares deliverable pursuant to the award, by services rendered by the recipient of the award, by notice and third party payment or cashless exercise on such terms as the plan administrator may authorize or any other form permitted by law.
The functions and powers of our board of directors include, among others, (i) convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings, (ii) declaring dividends, (iii) appointing officers and determining their terms of offices and responsibilities, (iv) exercising the borrowing powers of our company, and (v) approving the transfer of shares of our company, including the registering of such shares in our share register. 183 Table of Contents Terms of Directors and Officers Our officers are elected by and serve at the discretion of the board of directors.
The functions and powers of our board of directors include, among others, (i) convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings, (ii) declaring dividends, (iii) appointing officers and determining their terms of offices and responsibilities, (iv) exercising the borrowing powers of our company, and (v) approving the transfer of shares of our company, including the registering of such shares in our share register. 184 Table of Contents Terms of Directors and Officers Our officers are elected by and serve at the discretion of the board of directors.
Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares, as of February 28, 2025, by: ● each of our directors and executive officers; and ● each person known to us to beneficially own more than 5% of our ordinary shares.
Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares, as of February 28, 2026, by: ● each of our directors and executive officers; and ● each person known to us to beneficially own more than 5% of our ordinary shares.
However, the plan administrator will retain its authority until all outstanding awards are exercised or terminated. 179 Table of Contents The following table summarizes, as of February 28, 2025, the number of ordinary shares under outstanding awards that we granted to our directors and executive officers under the 2019 Plan, which replaced the 2015 Plan, and under the 2021 Plan, excluding awards that were exercised, forfeited or canceled after the relevant grant dates. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary ​ ​ ​ ​ ​ ​ Shares ​ ​ ​ ​ ​ ​ ​ ​ ​ Underlying ​ Exercise ​ ​ ​ ​ ​ ​ Equity Awards ​ Price ​ ​ ​ ​ Name ​ Granted ​ (US$/Share) ​ Date of Grant ​ Date of Expiration Executive Officers ​ Peter Luo, Ph.
However, the plan administrator will retain its authority until all outstanding awards are exercised or terminated. ​ 180 Table of Contents The following table summarizes, as of February 28, 2026, the number of ordinary shares under outstanding awards that we granted to our directors and executive officers under the 2019 Plan, which replaced the 2015 Plan, and under the 2021 Plan, excluding awards that were exercised, forfeited or canceled after the relevant grant dates. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares ​ ​ ​ ​ ​ ​ ​ ​ ​ Underlying ​ Exercise ​ ​ ​ ​ ​ ​ Equity Awards ​ Price ​ ​ ​ ​ Name ​ Granted ​ (US$/Share) ​ Date of Grant ​ Date of Expiration Executive Officers ​ ​ ​ ​ ​ Peter Luo, Ph.
Vicky received her Master of Business Administration degree from Xiamen University in 2016 and bachelor’s degree in accounting from Tianjin University of Commerce in 2003. Vicky is a member of the American Institute of Certified Management Accountant. Ling (Jolin) Zhou has served as our Executive Director of Human Resources since October 2019. Before joining Adagene, Ms.
Vicky received her Master of Business Administration degree from Xiamen University in 2016 and bachelor’s degree in accounting from Tianjin University of Commerce in 2003. Vicky is a member of the American Institute of Certified Management Accountant. 173 Table of Contents Ling (Jolin) Zhou has served as our Executive Director of Human Resources since October 2019. Before joining Adagene, Ms.
The Board has decided to renew Andy (Yiu Leung) Cheung, Ulf Grawunder and Man Kin (Raymond) Tam’s term of director position to the filing of our annual report on Form 20-F for 2025.
The Board has decided to renew Andy (Yiu Leung) Cheung, Ulf Grawunder and Man Kin (Raymond) Tam’s term of director position to the filing of our annual report on Form 20-F for 2026.
The initial term of our independent director Cuong Do is two-year from the effectiveness of the appointment and has been renewed to upon filing of our annual report on Form 20-F for 2025.
The initial term of our independent director Cuong Do is two-year from the effectiveness of the appointment and has been renewed to upon filing of our annual report on Form 20-F for 2026.
(9) Represents 9,175,439 ordinary shares held by HAN 2020 Irrevocable Trust, a trust established under the laws of California. On December 19, 2024, the trustee of the Han 2020 Irrevocable Trust was changed from Xiaohong She to North Point Trust Company. North Point Trust Company, acting as the independent trustee, exercises all powers of the investment director under the trust.
(5) Represents 9,390,439 ordinary shares held by HAN 2020 Irrevocable Trust, a trust established under the laws of California. On December 19, 2024, the trustee of the Han 2020 Irrevocable Trust was changed from Xiaohong She to North Point Trust Company. North Point Trust Company, acting as the independent trustee, exercises all powers of the investment director under the trust.
Zhu obtained a Bachelor of Science of Biology degree from the East China Normal University in February 1982 and a Doctor of Philosophy in molecular biology and immunology from Stanford University in July 1989. Ulf Grawunder, Ph.D. , has served as our independent director since March 2024. Dr.
Zhu obtained a Bachelor of Science of Biology degree from the East China Normal University in February 1982 and a Doctor of Philosophy in molecular biology and immunology from Stanford University in July 1989. 175 Table of Contents Ulf Grawunder, Ph.D. , has served as our independent director since March 2024. Dr.
The terms, repayment provisions, and collateral release provisions of the note and the pledge securing the note shall conform with all applicable rules and regulations, including those of the Federal Reserve Board of the United States and any applicable law, as then in effect. Eligibility.
The terms, repayment provisions, and collateral release provisions of the note and the pledge securing the note shall conform with all applicable rules and regulations, including those of the Federal Reserve Board of the United States and any applicable law, as then in effect. 177 Table of Contents Eligibility.
Employees, officers, directors and consultants that provide services to us or one of our subsidiaries may be selected to receive awards under the 2021 Plan. 177 Table of Contents Our board of directors or a committee appointed by the board administers the 2021 Plan.
Employees, officers, directors and consultants that provide services to us or one of our subsidiaries may be selected to receive awards under the 2021 Plan. Our board of directors or a committee appointed by the board administers the 2021 Plan.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. 188 Table of Contents 6.F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation. None.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. 6.F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation. None.
For share incentive grants to our directors and executive officers, see “Item 6 Directors, Senior Management and Employees—Share Incentive Plan.” Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers.
For share incentive grants to our directors and executive officers, see “Item 6 Directors, Senior Management and Employees—Share Incentive Plan.” Employment Agreements and Indemnification Agreements 176 Table of Contents We have entered into employment agreements with each of our executive officers.
The registered address of OT Healthcare Fund I, LLC is 131 Dartmouth St, Floor 3, Suite 24, Boston MA 02116. Information set forth above is based on OT Healthcare Fund I, LLC’s Schedule 13G/A filing with the SEC on February 3, 2025.
Nichola Eliovits is a manager of OT Management, LLC. The registered address of OT Healthcare Fund I, LLC is 131 Dartmouth St, Floor 3, Suite 24, Boston MA 02116. Information set forth above is based on OT Healthcare Fund I, LLC’s Schedule 13G/A filing with the SEC on February 3, 2025.
We have terminated the authority to grant additional awards under the 2019 Plan and all future awards will be granted under the 2021 Plan. Therefore, the effective maximum number of shares issuable under the 2019 Plan is 9,423,435.
We have terminated the authority to grant additional awards under the 2019 Plan and all future awards will be granted under the 2021 Plan. Therefore, the effective maximum number of shares issuable under the 2019 Plan is 9,050,935.
The following paragraphs summarize the principal terms of the 2019 Plan. Types of Awards. The 2019 Plan permits the awards of options, share appreciation rights, ordinary shares or restricted shares. 176 Table of Contents Plan Administration.
The following paragraphs summarize the principal terms of the 2019 Plan. Types of Awards. The 2019 Plan permits the awards of options, share appreciation rights, ordinary shares or restricted shares. Plan Administration.
(6) Represents 4,978,628 ordinary shares in the form of ADSs that were held of record by WuXi PharmaTech Healthcare Fund I L.P., a limited partnership incorporated in the Cayman Islands. WuXi Pharmatech Healthcare Fund I L.P. is an indirect wholly owned subsidiary of WuXi AppTec Co., Ltd (SSE: 603259; SEHK: 2359).
(4) Represents 3,485,038 ordinary shares in the form of ADSs that were held of record by WuXi PharmaTech Healthcare Fund I L.P., a limited partnership incorporated in the Cayman Islands. WuXi Pharmatech Healthcare Fund I L.P. is an indirect wholly owned subsidiary of WuXi AppTec Co., Ltd (SSE: 603259; SEHK: 2359).
Eng. ​ Chief Financial Officer and Director Chunfang (Vicky) Gu M.B.A ​ Executive Director of Finance Ling (Jolin) Zhou ​ Executive Director of Human Resources ​ 171 Table of Contents Key Employees Position/Title Yan Li, M.B.A. ​ Senior Vice President, Bioinformatics and Information Technology Xiaohong (Kristine) She ​ Senior Vice President, Head of Clinical Operations Guizhong Liu, Ph.D. ​ Senior Vice President of Early Drug Discovery Alexander Goergen ​ Vice President, Head of Business Development Songmao Zheng, Ph.D. ​ Vice President, Head of Clinical and Quantitative Pharmacology Jiping Zha ​ Executive Vice President of Clinical Development Wenlin Zeng ​ Vice President of Early Stage CMC Dana Hu-Lowe ​ Vice President of Global Product Team Leadership ​ Non-Employee Directors Position/Title Andy (Yiu Leung) Cheung ​ Independent Director Cuong Do ​ Independent Director Li Zhu, Ph.D. ​ Independent Director Ulf Grawunder, Ph.D. ​ Independent Director ​ Executive Officers Peter Luo, Ph.D. is our Co-Founder and has served as our Chief Executive Officer since November 2011 and Chairman of the Board of the Directors since February 2018.
Eng. ​ Chief Financial Officer and Director Mickael Chane-Du ​ Chief Strategy Officer Chunfang (Vicky) Gu M.B.A ​ Executive Director of Finance Ling (Jolin) Zhou ​ Executive Director of Human Resources ​ Key Employees ​ ​ ​ Position/Title Yan Li, M.B.A. ​ Senior Vice President, Bioinformatics and Information Technology Xiaohong (Kristine) She ​ Senior Vice President, Head of Clinical Operations Guizhong Liu, Ph.D. ​ Senior Vice President of Early Drug Discovery Alexander Goergen ​ Vice President, Head of Business Development Songmao Zheng, Ph.D. ​ Senior Vice President of Clinical Pharmacology and Quantitative Sciences Jiping Zha ​ Executive Vice President of Clinical Development Wenlin Zeng ​ Vice President of Early Stage CMC ​ Non-Employee Directors ​ ​ ​ Position/Title Andy (Yiu Leung) Cheung ​ Independent Director Cuong Do ​ Independent Director Li Zhu, Ph.D. ​ Independent Director Ulf Grawunder, Ph.D. ​ Independent Director ​ 172 Table of Contents Executive Officers Peter Luo, Ph.D. is our Co-Founder and has served as our Chief Executive Officer since November 2011 and Chairman of the Board of the Directors since February 2018.
As of February 28, 2025, the aggregate number of our ordinary shares underlying our outstanding awards under the 2019 Plan is 1,922,960, excluding awards that were forfeited, cancelled or exercised after the relevant grant dates. The term of the awards will expire not more than ten years after the date of grant.
As of February 28, 2026, the aggregate number of our ordinary shares underlying our outstanding awards under the 2019 Plan is 1,529,460, excluding awards that were forfeited, cancelled or exercised after the relevant grant dates. The term of the awards will expire not more than ten years after the date of grant.
Employees We had a total of 248, 174 and 138 employees as of December 31, 2022, 2023 and 2024, respectively. The following table sets forth the numbers of our employees categorized by function as of December 31, 2024.
Employees We had a total of 174, 138 and 128 employees as of December 31, 2023, 2024 and 2025, respectively. The following table sets forth the numbers of our employees categorized by function as of December 31, 2025.
Mr. Cheung has many years of auditing and accounting professional experience. Mr. Cheung was deputy area managing partner of Ernst & Young (“EY”) in Asia Pacific overseeing the business operations, finance, information technology and risk management functions from July 2018 to June 2020. Mr. Cheung was the assurance leader for EY in Greater China from July 2013 to June 2018.
Cheung was deputy area managing partner of Ernst & Young (“EY”) in Asia Pacific overseeing the business operations, finance, information technology and risk management functions from July 2018 to June 2020. Mr. Cheung was the assurance leader for EY in Greater China from July 2013 to June 2018. Mr.
In addition, the performance milestones applicable to the share options that remain outstanding were also modified. As of February 28, 2025, we had granted equity awards representing 8,795,907 ordinary shares under the 2021 Plan, excluding awards that were forfeited, cancelled or exercised after the relevant grant dates.
In addition, the performance milestones applicable to the share options that remain outstanding were also modified. As of February 28, 2026, we had granted equity awards representing 14,712,707 ordinary shares under the 2021 Plan, excluding awards that were forfeited, cancelled or exercised after the relevant grant dates.
Eng. ​ 50,000 ​ $ — ​ July 2024 ​ — Man Kin (Raymond) Tam, M.B.A., B. Eng. ​ 252,448 ​ $ 1.73 ​ November 2024 ​ November 2034 Man Kin (Raymond) Tam, M.B.A., B.
Eng. ​ 37,500 ​ $ — ​ July 2024 ​ — Man Kin (Raymond) Tam, M.B.A., B. Eng. ​ 252,448 ​ $ 1.73 ​ November 2024 ​ November 2034 Man Kin (Raymond) Tam, M.B.A., B. Eng. ​ 50,000 ​ $ 1.55 ​ December 2024 ​ December 2034 Man Kin (Raymond) Tam, M.B.A., B.
As of February 28, 2025, 9,707,945 ordinary shares authorized under the 2021 Plan is available for award purposes. Such number includes an annual automatic increase in an amount equal to 5% of the total number of outstanding ordinary shares on December 31, 2024.
As of February 28, 2026, 15,740,360 ordinary shares authorized under the 2021 Plan is available for award purposes. Such number includes an annual automatic increase in an amount equal to 5% of the total number of outstanding ordinary shares on December 31, 2025.
The holder is the depositary of our ADS program. In addition, 38.1% of our outstanding ordinary shares were held by record holders in the United States. Our principal shareholders do not have different voting rights.
The holder is the depositary of our ADS program. In addition, 40.3% of our outstanding ordinary shares were held by record holders in the United States. 188 Table of Contents Our principal shareholders do not have different voting rights.
The plan administrator may provide for the deferred payment of awards and may determine the terms applicable to deferrals. 178 Table of Contents As is customary in incentive plans of this nature, the number and type of shares available under the 2021 Plan and any outstanding awards, as well as the exercise or purchase prices of awards, will be subject to adjustment in the event of certain reorganizations, mergers, combinations, recapitalizations, share splits, share dividends or other similar events that change the number or kind of shares outstanding, and extraordinary dividends or distributions of property to the shareholders.
As is customary in incentive plans of this nature, the number and type of shares available under the 2021 Plan and any outstanding awards, as well as the exercise or purchase prices of awards, will be subject to adjustment in the event of certain reorganizations, mergers, combinations, recapitalizations, share splits, share dividends or other similar events that change the number or kind of shares outstanding, and extraordinary dividends or distributions of property to the shareholders.
The calculations in the table below are based on 58,886,944 ordinary shares issued and outstanding as of February 28, 2025. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 59,258,243 ordinary shares issued and outstanding as of February 28, 2026. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
WuXi AppTec Co., Ltd. is a listed company on the Shanghai Stock Exchange and the Main Board of the Hong Kong Stock Exchange. The registered address of WuXi Pharmatech Healthcare Fund I L.P. is P.O.
WuXi AppTec Co., Ltd. is a listed company on the Shanghai Stock Exchange and the Main Board of the Hong Kong Stock Exchange. The registered address of WuXi Pharmatech Healthcare Fund I L.P. is P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.
As of February 28, 2025, a total of 12,786,716 ordinary shares, representing 21.7% of our outstanding ordinary shares, including ordinary shares issued in advance but deemed not outstanding to facilitate conversation of ordinary shares to ADSs for the employee share incentive plans, are held by one record holder in the United States.
As of February 28, 2026, a total of 24,862,126 ordinary shares, representing 42.0% of our outstanding ordinary shares, including ordinary shares issued in advance but deemed not outstanding to facilitate conversation of ordinary shares to ADSs for the employee share incentive plans, are held by one record holder in the United States.
We also engage consultants and part-time staff as and when appropriate. ​ ​ ​ ​ ​ Function Number of Employees Research and Development ​ 94 Computational Biology and Informatics 14 ​ ​ Early Drug Discovery & Technology Development ​ 36 ​ ​ Clinical Development 27 ​ ​ CMC Development ​ 17 ​ ​ General Administration ​ ​ 42 HR 4 ​ ​ Finance 11 ​ ​ IT 14 ​ ​ Administration 13 ​ ​ Business Development and Marketing ​ ​ 2 Total ​ ​ 138 ​ Our success depends on our ability to attract, motivate, train and retain qualified personnel.
We also engage consultants and part-time staff as and when appropriate. ​ ​ ​ ​ ​ Function ​ ​ ​ Number of Employees Research and Development ​ ​ ​ ​ 86 Computational Biology and Informatics 12 ​ ​ Early Drug Discovery & Technology Development ​ 29 ​ ​ Clinical Development 29 ​ ​ CMC Development ​ 16 ​ ​ General Administration ​ ​ 41 HR 4 ​ ​ Finance 11 ​ ​ IT 14 ​ ​ Administration 12 ​ ​ Business Development and Marketing ​ ​ 1 Total ​ ​ 128 ​ 185 Table of Contents Our success depends on our ability to attract, motivate, train and retain qualified personnel.
For the fiscal year ended December 31, 2024, we did not pay any cash compensation to non-executive directors who are not independent directors. For the fiscal year ended December 31, 2024, we did not set aside or accrue expenses related to pension, retirement or other similar benefits to our executive officers and directors.
For the fiscal year ended December 31, 2025, we did not set aside or accrue expenses related to pension, retirement or other similar benefits to our executive officers and directors.
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant, or other right or the conversion of any other security. 185 Table of Contents These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned as of February 28, 2025 ​ ​ Number %* ​ Directors and Executive Officers:† Peter Luo (1) 3,237,987 ​ 5.4 % Qinghai Zhao ** ** % Man Kin (Raymond) Tam ** ** % Chunfang (Vicky) Gu ​ ** ​ ** % Ling (Jolin) Zhou ​ ** ​ ** % Non-employee Directors Andy (Yiu Leung) Cheung (independent director) ** ** % Cuong Do (independent director) ​ ** ​ ** % Zhu Li (independent director) ​ ** ​ ** % Ulf Grawunder (independent director) ​ — ​ — % All directors and executive officers as a group 3,427,612 5.7 % ​ ​ ​ ​ ​ ​ Principal Shareholders: ​ ​ Peter Luo act-in-concert group (2) 3,237,987 5.4 % JSR Limited (3) 5,340,740 9.1 % Asia Ventures II L.P.
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant, or other right or the conversion of any other security. ​ 186 Table of Contents These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned as of February 28, 2026 ​ ​ ​ ​ ​ Number ​ ​ ​ %* ​ Directors and Executive Officers:† ​ ​ Peter Luo (1) 4,734,693 ​ 7.6 % Qinghai Zhao 391,701 0.6 % Man Kin (Raymond) Tam 513,711 0.8 % Chunfang (Vicky) Gu ​ 125,729 ​ 0.2 % Ling (Jolin) Zhou ​ 71,703 ​ 0.1 % Mickael Chane-Du ​ 967,525 ​ 1.5 % Non-employee Directors ​ ​ Andy (Yiu Leung) Cheung (independent director) 26,250 0.0 % Cuong Do (independent director) ​ 40,000 ​ 0.1 % Zhu Li (independent director) ​ 26,250 ​ 0.0 % Ulf Grawunder (independent director) ​ 45,000 ​ 0.1 % All directors and executive officers as a group 6,037,150 9.6 % ​ ​ ​ ​ ​ ​ Principal Shareholders: ​ ​ Peter Luo act-in-concert group (2) 4,734,693 7.6 % JSR Limited (3) 5,340,740 9.0 % Wuxi Pharmatech Healthcare Fund I L.P.
(10) Represents 3,567,653 ADRs representing 4,459,566 ordinary shares held by OT Healthcare Fund I, LLC, a limited liability company incorporated in Delaware. The manager of OT Healthcare Fund I, LLC is OT Management, LLC. Nichola Eliovits is a manager of OT Management, LLC.
(7) Represents 2,733,926 ADRs representing 3,417,408 ordinary shares held by OT Healthcare Fund II, LLC, a limited liability company incorporated in Delaware. The manager of OT Healthcare Fund II, LLC is OT Management, LLC. Nichola Eliovits is a manager of OT Management, LLC.
Zeng brings more than 20 years of experience in drug discovery and drug development in the biopharmaceutical industry. Prior to joining us, Dr. Zeng was the senior director of upstream process development responsible for both early and late stage programs at Gilead Sciences, Inc from July 2020 to June 2021 .
Zeng was the senior director of upstream process development responsible for both early and late stage programs at Gilead Sciences, Inc from July 2020 to June 2021 .
Liu received his bachelor’s degree in biology in 1992 and master’s degree in cell biology in 1995 from Beijing Normal University and Ph.D. degree in cell biology from Peking Union Medical College in 1998.
Liu received his bachelor’s degree in biology in 1992 and master’s degree in cell biology in 1995 from Beijing Normal University and Ph.D. degree in cell biology from Peking Union Medical College in 1998. He also completed his postdoctoral training in cancer biology at Mount Sinai School of Medicine in 2004.
These and other awards may also be issued solely or in part for services. Awards are generally paid in cash or our ordinary shares.
These and other awards may also be issued solely or in part for services. Awards are generally paid in cash or our ordinary shares. The plan administrator may provide for the deferred payment of awards and may determine the terms applicable to deferrals.
Eng. ​ 50,000 ​ $ 1.55 ​ December 2024 ​ December 2034 Chunfang (Vicky) Gu ​ * ​ $ 1.33 ​ February 2019 ​ February 2029 Chunfang (Vicky) Gu ​ * ​ $ 1.48 ​ March 2020 ​ March 2030 Chunfang (Vicky) Gu ​ * ​ $ 1.83 ​ August 2020 ​ August 2030 Chunfang (Vicky) Gu ​ * ​ $ 5.6 ​ February 2022 ​ February 2032 Chunfang (Vicky) Gu ​ * ​ $ 1.04 ​ May 2023 ​ May 2033 Chunfang (Vicky) Gu ​ * ​ $ 1.33 ​ December 2023 ​ December 2033 Chunfang (Vicky) Gu ​ * ​ $ — ​ July 2024 ​ — Chunfang (Vicky) Gu ​ * ​ $ 1.73 ​ November 2024 ​ November 2034 Chunfang (Vicky) Gu ​ * ​ $ 1.55 ​ December 2024 ​ December 2034 Ling (Jolin) Zhou ​ * ​ $ 1.48 ​ March 2020 ​ March 2030 Ling (Jolin) Zhou ​ * ​ $ 1.83 ​ August 2020 ​ August 2030 Ling (Jolin) Zhou ​ * ​ $ 5.6 ​ February 2022 ​ February 2032 Ling (Jolin) Zhou ​ * ​ $ 1.04 ​ May 2023 ​ May 2033 Ling (Jolin) Zhou ​ * ​ $ 1.33 ​ December 2023 ​ December 2033 Ling (Jolin) Zhou ​ * ​ $ — ​ July 2024 ​ — Ling (Jolin) Zhou ​ * ​ $ 1.73 ​ November 2024 ​ November 2034 Ling (Jolin) Zhou ​ * ​ $ 1.55 ​ December 2024 ​ December 2034 Non-Employee Directors ​ ​ ​ Andy (Yiu Leung) Cheung ​ * ​ $ 11.2 ​ June 2021 ​ June 2031 Andy (Yiu Leung) Cheung * ​ $ 1.55 December 2024 December 2034 Cuong Do ​ * ​ $ 0.8 ​ November 2022 ​ November 2032 Cuong Do ​ * ​ $ 1.07 ​ October 2023 ​ October 2033 Li Zhu ​ * ​ $ 1.15 ​ September 2023 ​ September 2033 Li Zhu ​ * ​ $ 1.55 ​ December 2024 ​ December 2034 Ulf Grawunder ​ * ​ $ 2.26 ​ April 2024 ​ April 2034 All directors and executive officers as a group 4,512,730 ​ ​ Various dates from November 2018 to December 2024 Various dates from November 2028 to December 2034 Note: * The shares held by each of these directors and executive officers represent less than 1% of our total outstanding shares.
Eng. ​ 100,000 ​ $ 2.032 ​ February 2026 ​ February 2036 Chunfang (Vicky) Gu ​ 30,000 ​ $ 1.33 ​ February 2019 ​ February 2029 Chunfang (Vicky) Gu ​ 30,000 ​ $ 1.48 ​ March 2020 ​ March 2030 Chunfang (Vicky) Gu ​ 20,000 ​ $ 1.83 ​ August 2020 ​ August 2030 Chunfang (Vicky) Gu ​ 1,250 ​ $ 5.6 ​ February 2022 ​ February 2032 Chunfang (Vicky) Gu ​ 20,000 ​ $ 1.04 ​ May 2023 ​ May 2033 Chunfang (Vicky) Gu ​ 20,000 ​ $ 1.33 ​ December 2023 ​ December 2033 Chunfang (Vicky) Gu ​ 23,438 ​ $ — ​ July 2024 ​ — Chunfang (Vicky) Gu ​ 19,869 ​ $ 1.73 ​ November 2024 ​ November 2034 Chunfang (Vicky) Gu ​ 30,000 ​ $ 1.55 ​ December 2024 ​ December 2034 Chunfang (Vicky) Gu ​ 55,000 ​ $ 1.408 ​ June 2025 ​ June 2035 Chunfang (Vicky) Gu ​ 40,000 ​ $ 2.032 ​ February 2026 ​ February 2036 Ling (Jolin) Zhou ​ 25,000 ​ $ 1.48 ​ March 2020 ​ March 2030 Ling (Jolin) Zhou ​ 3,125 ​ $ 1.83 ​ August 2020 ​ August 2030 Ling (Jolin) Zhou ​ 1,250 ​ $ 5.6 ​ February 2022 ​ February 2032 Ling (Jolin) Zhou ​ 20,000 ​ $ 1.04 ​ May 2023 ​ May 2033 Ling (Jolin) Zhou ​ 20,000 ​ $ 1.33 ​ December 2023 ​ December 2033 Ling (Jolin) Zhou ​ 9,375 ​ $ — ​ July 2024 ​ — Ling (Jolin) Zhou ​ 26,217 ​ $ 1.73 ​ November 2024 ​ November 2034 Ling (Jolin) Zhou ​ 25,000 ​ $ 1.55 ​ December 2024 ​ December 2034 Ling (Jolin) Zhou ​ 35,000 ​ $ 1.408 ​ June 2025 ​ June 2035 Ling (Jolin) Zhou ​ 35,000 ​ $ 2.032 ​ February 2026 ​ February 2036 Mickael Chane-Du ​ 400,000 ​ $ 1.376 ​ May 2025 ​ May 2035 Mickael Chane-Du ​ 400,000 ​ $ 2.032 ​ February 2026 ​ February 2036 Non-Employee Directors ​ ​ ​ ​ ​ Andy (Yiu Leung) Cheung ​ 20,000 ​ $ 11.2 ​ June 2021 ​ June 2031 Andy (Yiu Leung) Cheung 25,000 ​ $ 1.55 December 2024 December 2034 Andy (Yiu Leung) Cheung ​ 25,000 ​ $ 2.032 ​ February 2026 ​ February 2036 Cuong Do ​ 40,000 ​ $ 0.8 ​ November 2022 ​ November 2032 Cuong Do ​ 50,000 ​ $ 1.07 ​ October 2023 ​ October 2033 Li Zhu ​ 20,000 ​ $ 1.15 ​ September 2023 ​ September 2033 Li Zhu ​ 25,000 ​ $ 1.55 ​ December 2024 ​ December 2034 Li Zhu ​ 25,000 ​ $ 2.032 ​ February 2026 ​ February 2036 Ulf Grawunder ​ 40,000 ​ $ 2.26 ​ April 2024 ​ April 2034 Ulf Grawunder ​ 25,000 ​ $ 2.032 ​ February 2026 ​ February 2036 All directors and executive officers as a group 7,357,242 ​ ​ Various dates from November 2018 to February 2026 Various dates from November 2028 to February 2036 ​ As of February 28, 2026, our award holders other than our directors and executive officers as a group held outstanding awards to purchase 8,884,925 ordinary shares.
Zheng had served as Scientific Director/Group Leader, leading numerous biologics programs at Janssen BioTherapeutics, Janssen R&D since 2013. Dr. Zheng received his bachelor’s degree in biological sciences from Sichuan University in 2007 and Ph.D. degree in pharmaceutical sciences from University of Washington in 2012. Jiping Zha, Ph.D. has served as our Executive Vice President of Clinical Development since September 2021.
Zheng received his bachelor’s degree in biological sciences from Sichuan University in 2007 and Ph.D. degree in pharmaceutical sciences from University of Washington in 2012. 174 Table of Contents Jiping Zha, Ph.D. has served as our Executive Vice President of Clinical Development since September 2021. Dr. Zha is responsible for clinical development, clinical operation and drug safety group.
Smith Vincent C (“Mr. Smith”) is the Manager of Red Beard Holdings, LLC therefore may be deemed to have beneficial ownership of the shares held thereby. Mr. Smith is the grantor of all of the trusts that are partners of VCS Master Holdings GP and disclaims beneficial ownership of the shares held thereby.
Smith, Jr. 2025 Annuity Trust therefore may be deemed to have beneficial ownership of the shares held thereby. Mr. Smith is the grantor of all of the trusts that are partners of VCS Master Holdings GP and disclaims beneficial ownership of the shares held thereby. Information set forth above is based on Mr.
(8) ​ 3,037,500 ​ 5.2 % HAN 2020 IRREVOCABLE TRUST (9) ​ 9,175,439 ​ 15.6 % OT Healthcare Fund I, LLC (10) ​ 4,459,566 ​ 7.6 % Red Beard Holdings and its Affiliated Entities (11) ​ 3,833,806 ​ 6.5 % Notes: * For each person and group included in this table, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of (i) 58,886,944 being the number of ordinary shares as of February 28, 2025 and (ii) the number of ordinary shares underlying share options held by such person or group that are exercisable within 60 days after February 28, 2025. ** Represents beneficial ownership of less than one percent. † The business address of our directors and executive officers, except for Cuong Do, and Li Zhu, is 4F, Building C14, No. 218, Xinghu Street, Suzhou Industrial Park Suzhou, Jiangsu Province, 215123, People’s Republic of China.
Smith (8) ​ 5,095,351 ​ 8.6 % Notes: * For each person and group included in this table, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of (i) 59,258,243 being the number of ordinary shares as of February 28, 2026 and (ii) the number of ordinary shares underlying share options held by such person or group that are exercisable within 60 days after February 28, 2026. † The business address of our directors and executive officers, except for Cuong Do, Li Zhu, and Mickael Chane-Du, is 4F, Building C14, No. 218, Xinghu Street, Suzhou Industrial Park Suzhou, Jiangsu Province, 215123, People’s Republic of China.
Gallen, School of Business in Switzerland. ​ 175 Table of Contents 6.B. Compensation Compensation For the fiscal year ended December 31, 2024, we paid an aggregate of US$2.0 million in cash to our executive officers and an aggregate of US$0.3 million in cash to our independent directors.
Compensation Compensation For the fiscal year ended December 31, 2025, we paid an aggregate of US$ 1.6 million in cash to our executive officers and an aggregate of US$ 0.2 million in cash to our independent directors. For the fiscal year ended December 31, 2025, we did not pay any cash compensation to non-executive directors who are not independent directors.
Goergen has worked in various roles at the Covance, TRC and International AIDS Vaccine Initiative from October 2008 to October 2012. Prior to joining us, Alexander worked in business development for Catalent Pharma Solutions Biologics Division since October 2012. Mr. Goergen completed many licensing, manufacturing, and cell line development programs both domestically and internationally during his previous employment. Mr.
Alexander Goergen has served as our Head of Business Development since October 2017 when he joined the Company. Mr. Goergen has worked in various roles at the Covance, TRC and International AIDS Vaccine Initiative from October 2008 to October 2012. Prior to joining us, Alexander worked in business development for Catalent Pharma Solutions Biologics Division since October 2012. Mr.
As of February 28, 2025, our award holders other than our directors and executive officers as a group held outstanding awards to purchase 6,206,138 ordinary shares. For discussions of our accounting policies and estimates for awards granted pursuant to the 2019 Plan and 2021 Plan, see “Item 5 Operating and Financial Review and Prospects—Share-based compensation.” 180 Table of Contents 6.C.
For discussions of our accounting policies and estimates for awards granted pursuant to the 2019 Plan and 2021 Plan, see “Item 5 Operating and Financial Review and Prospects—Share-based compensation.” 181 Table of Contents 6.C.
As a result of these efforts, we have generally been able to attract and retain qualified personnel and maintain a stable core management team. 184 Table of Contents As required by regulations in China, we participate in various employee social security plans that are organized by municipal and provincial governments, including pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, medical insurance and housing funds.
As required by regulations in China, we participate in various employee social security plans that are organized by municipal and provincial governments, including pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, medical insurance and housing funds.
The 2021 Plan is not exclusive; our board of directors and compensation committee may grant shares and performance incentives or other compensation, in shares or cash, under other plans or authority. The plan will terminate on January 16, 2031.
Plan amendments will be submitted to shareholders for their approval as required by applicable law or deemed necessary or advisable by the board. The 2021 Plan is not exclusive; our board of directors and compensation committee may grant shares and performance incentives or other compensation, in shares or cash, under other plans or authority.
Zha received his M.D. degree in basic medicine from Shanghai Medical University in 1987 and Ph.D. degree in Microbiology and Immunology from University of Tennessee in 1993, and was Board-Certified in Anatomic Pathology by American Board of Pathology in 1999. Wenlin Zeng, Ph.D. has served as our Vice President of Early Stage CMC since June 2021. Dr.
Zha has over forty publications in high-impact scientific journals, such as Cell, Science and Nature, and authored multiple patents. Dr. Zha received his M.D. degree in basic medicine from Shanghai Medical University in 1987 and Ph.D. degree in Microbiology and Immunology from University of Tennessee in 1993, and was Board-Certified in Anatomic Pathology by American Board of Pathology in 1999.
For example, the administrator could provide for the acceleration of vesting or payment of an award in connection with a corporate event that is not described above and provide that any such acceleration shall be automatic upon the occurrence of any such event.
For example, the administrator could provide for the acceleration of vesting or payment of an award in connection with a corporate event that is not described above and provide that any such acceleration shall be automatic upon the occurrence of any such event. 179 Table of Contents Our board of directors may amend or terminate the 2021 Plan at any time, but no such action will affect any outstanding award in any manner materially adverse to a participant without the consent of the participant.
Zha has served as executive director of translational sciences at NGM Biopharmaceuticals from April 2017 to September 2021, and held various leadership positions at MedImmune, Crown Bioscience, Genentech from November 2003 to March 2017. Dr. Zha has over forty publications in high-impact scientific journals, such as Cell, Science and Nature, and authored multiple patents. Dr.
He is a physician scientist with over 20 years of formative experience in both academia and biotech industry. Dr. Zha has served as executive director of translational sciences at NGM Biopharmaceuticals from April 2017 to September 2021, and held various leadership positions at MedImmune, Crown Bioscience, Genentech from November 2003 to March 2017. Dr.
Goergen received his bachelor’s degree in Chemistry from Lafayette College in 2008 and master’s degree in Biotechnology from the University of Wisconsin-Madison in 2011. Songmao Zheng, Ph.D. is currently our Vice President, Head of Clinical and Quantitative Pharmacology, and leads quantitative model-informed drug discovery and development in both preclinical and clinical space. Prior to joining us, Dr.
Goergen completed many licensing, manufacturing, and cell line development programs both domestically and internationally during his previous employment. Mr. Goergen received his bachelor’s degree in Chemistry from Lafayette College in 2008 and master’s degree in Biotechnology from the University of Wisconsin-Madison in 2011. Songmao Zheng, Ph.D. is currently our Senior Vice President of Clinical Pharmacology and Quantitative Sciences.
He received his bachelor’s degree in civil & resources engineering from the University of Auckland in 1997, master’s degree in practising accounting from Monash University in 2001 and an Executive Master of Business Administration degree from the University of Western Ontario in 2005. 172 Table of Contents Chunfang (Vicky) Gu, M.B.A. joined Adagene in September 2017 and serves as Executive Director of Finance.
He received his bachelor’s degree in civil & resources engineering from the University of Auckland in 1997, master’s degree in practising accounting from Monash University in 2001 and an Executive Master of Business Administration degree from the University of Western Ontario in 2005. Mickael Chane-Du is our Chief Strategy Officer.
D. ​ 225,000 ​ $ — ​ July 2024 ​ — Peter Luo, Ph. D. ​ 822,819 ​ $ 1.73 ​ November 2024 ​ November 2034 Peter Luo, Ph. D. ​ 450,000 ​ $ 1.55 ​ December 2024 ​ December 2034 Qinghai Zhao, Ph. D. * ​ $ 2.26 October 2020 October 2030 Qinghai Zhao, Ph.
D. ​ 168,750 ​ $ — ​ July 2024 ​ — Peter Luo, Ph. D. ​ 822,819 ​ $ 1.73 ​ November 2024 ​ November 2034 Peter Luo, Ph. D. ​ 450,000 ​ $ 1.55 ​ December 2024 ​ December 2034 Peter Luo, Ph. D. ​ 735,000 ​ $ 1.408 ​ June 2025 ​ June 2035 Peter Luo, Ph.
(2) Represents (i) 33,401 ordinary shares (including ordinary shares represented by the ADSs) held by Peter Luo; (ii) 587,415 ordinary shares underlying share options granted to Peter Luo that are vested or will be vested within 60 days of February 28, 2025, (iii) 191,667 ordinary shares held by Great Han Fortune LP for the benefit of Peter Luo; (iv) 4,817 ordinary shares held by Xiaohong She, who is the spouse of Peter Luo; (v) 98,230 ordinary shares underlying share options granted to Xiaohong She that are vested or will be vested within 60 days of February 28, 2025, (vi) 23,333 ordinary shares held by Great Han Fortune LP for the benefit of Xiaohong She, (vii) total of 1,598,121 ordinary shares (including ordinary shares represented by the ADSs) held by Raymond Tam, Qinghai Zhao and several key employees of the Company, and (viii) total of 701,003 share options granted to Raymond Tam, Qinghai Zhao and several key employees that are vested or will be vested within 60 days of February 28, 2025.
(1) Represents 4,734,693 ordinary shares held by Peter Luo act-in-concert group, as set forth in note (2) below. 187 Table of Contents (2) Represents (i) 93,264 ordinary shares (including ordinary shares represented by the ADSs) held by Peter Luo; (ii) 1,361,325 ordinary shares underlying share options granted to Peter Luo that are vested or will be vested within 60 days of February 28, 2026, (iii) 31,021 ordinary shares held by Xiaohong She, who is the spouse of Peter Luo; (v) 244,391ordinary shares underlying share options granted to Xiaohong She that are vested or will be vested within 60 days of February 28, 2026, (vii) total of 1,678,063 ordinary shares (including ordinary shares represented by the ADSs) held by Raymond Tam, Qinghai Zhao and several key employees of the Company, and (viii) total of 1,326,629 share options granted to Raymond Tam, Qinghai Zhao and several key employees that are vested or will be vested within 60 days of February 28, 2026.
D. ​ * ​ $ 1.73 ​ November 2024 ​ November 2034 Qinghai Zhao, Ph. D. ​ * ​ $ 1.55 ​ December 2024 ​ December 2034 Man Kin (Raymond) Tam, M.B.A., B. Eng. 138,519 ​ $ 1.48 March 2020 March 2030 Man Kin (Raymond) Tam, M.B.A., B.
D. ​ 81,700 ​ $ 1.408 ​ June 2025 ​ June 2035 Qinghai Zhao, Ph. D. ​ 80,000 ​ $ 2.032 ​ February 2026 ​ February 2036 Man Kin (Raymond) Tam, M.B.A., B. Eng. 138,519 ​ $ 1.48 March 2020 March 2030 Man Kin (Raymond) Tam, M.B.A., B.
The business address of Cuong Do is 660 Destacada Ave, Miami, United States FL 33156-8000; and the business address of Li Zhu is 33345 7th St, Union City, CA, 94587-2128, United States. 186 Table of Contents (1) Represents 3,237,987 ordinary shares held by Peter Luo act-in-concert group, as set forth in note (2) below.
The business address of Cuong Do is 660 Destacada Ave, Miami, United States FL 33156-8000; the business address of Li Zhu is 33345 7th St, Union City, CA, 94587-2128, United States; and the business address of Mickael Chane-Du is 250 Valley Stream Ln, Southbury, CT 06488, United States.
D. ​ * ​ $ 5.6 ​ February 2022 ​ February 2032 Qinghai Zhao, Ph. D. ​ * ​ $ 1.04 ​ May 2023 ​ May 2033 Qinghai Zhao, Ph. D. ​ * ​ $ 1.33 ​ December 2023 ​ December 2033 Qinghai Zhao, Ph. D. ​ * ​ $ — ​ July 2024 ​ — Qinghai Zhao, Ph.
D. ​ 800,000 ​ $ 2.032 ​ February 2026 ​ February 2036 Qinghai Zhao, Ph. D. 130,542 ​ $ 2.26 October 2020 October 2030 Qinghai Zhao, Ph. D. ​ 1,250 ​ $ 5.6 ​ February 2022 ​ February 2032 Qinghai Zhao, Ph. D. ​ 50,000 ​ $ 1.04 ​ May 2023 ​ May 2033 Qinghai Zhao, Ph.
Hu-Lowe received her bachelor’s degree in chemistry from Beijing Normal University in 1984 and Ph.D. degree in biochemistry from the University of Mississippi in 1992 and completed her Post-doctoral training at Scripps Research Institute and the Burnham Cancer Center (now the Sanford Burnham Prebys Medical Discovery Institute). 174 Table of Contents Non-Employee Directors Andy (Yiu Leung) Cheung has served as our independent director since February 2021.
Zeng received her bachelor’s degree in cell biology from Wuhan University in 1983 and Ph.D. degree in biochemistry from the University of Iowa in 1990. Non-Employee Directors Andy (Yiu Leung) Cheung has served as our independent director since February 2021. Mr. Cheung has many years of auditing and accounting professional experience. Mr.
(11) Represents 3,833,806 ordinary shares, consisting of (i) sole voting and dispositive power over 523,105 ordinary shares held directly, (ii) shared voting and dispositive power over 3,125,000 ordinary shares held by Red Beard Holdings, LLC, a limited liability company organized under the laws of Delaware (“Red Beard”) and (iii) 185,701 ordinary shares held by VCS Master Holdings GP, a Delaware General Partnership (“VCS”).
Smith, Jr. 2025 Annuity Trust, a trust organized under the laws of the State of California and (iii) 185,701 ordinary shares held by VCS Master Holdings GP, a Delaware General Partnership (“VCS”). Smith Vincent C (“Mr. Smith”) is a trustee of The Vincent C.
Removed
He also completed his postdoctoral training in cancer biology at Mount Sinai School of Medicine in 2004. 173 Table of Contents Alexander Goergen has served as our Head of Business Development since October 2017 when he joined the Company. Mr.
Added
Mickael has been leading private and public biotechnology investments at Olive Tree Capital since 2024. He brings extensive buy-side and sell-side experience in the United States and Europe.
Removed
Dr. Zha is responsible for clinical development, clinical operation and drug safety group. He is a physician scientist with over 20 years of formative experience in both academia and biotech industry. Dr.
Added
Prior to joining Olive Tree, he led public and private investments in Oncology for 7 years at Invus, a global investment firm managing over $10 billions of evergreen capital, with a primary focus on small- to mid-sized biotechnology companies.
Removed
Zeng received her bachelor’s degree in cell biology from Wuhan University in 1983 and Ph.D. degree in biochemistry from the University of Iowa in 1990. Dana Hu-Lowe, Ph.D. is currently our Vice President of Global Product Team Leadership. Dr.
Added
Before Invus, Mickael spent 8 years as a sell-side equity research analyst at Bryan, Garnier & Co, Société Générale Gilbert Dupont, and Oddo Securities. He holds a Masters of Management from Grenoble École de Management in France. Chunfang (Vicky) Gu, M.B.A. joined Adagene in September 2017 and serves as Executive Director of Finance.
Removed
Hu-Lowe has more than 20 years of industry experience in oncology and R&D including years of experience in project and strategic alliance management, and leadership for both preclinical and clinical product programs. Before joining Adagene, she served as an Executive Director and Global Product Team Leader at Turning Point Therapeutics from April 2019 to October 2021.
Added
He leads quantitative model-informed drug discovery and development in both preclinical and clinical space. Prior to joining us, Dr. Zheng had served as Scientific Director/Group Leader, leading numerous biologics programs at Janssen BioTherapeutics, Janssen R&D since 2013. Dr.
Removed
She was the Senior Director of Strategic Alliance and Program management at Wellspring Biosciences Inc. from March 2013 to March 2019, where she managed both internal discovery and IND-enabling programs and strategic alliance with Janssen Pharmaceuticals. Dr.
Added
Wenlin Zeng, Ph.D. has served as our Vice President of Early Stage CMC since June 2021. Dr. Zeng brings more than 20 years of experience in drug discovery and drug development in the biopharmaceutical industry. Prior to joining us, Dr.
Removed
Hu-Lowe had over 12 years of career at Pfizer Oncology November 1999 to December 2011, where she led cross-functional teams advancing programs from preclinical into clinical development. Dr.
Added
Gallen, School of Business in Switzerland. ​ Executive Advisors We appointed Dr. John Maraganore and Dr. Axel Hoos as Executive Advisors in April 2025 and September 2025, respectively. Dr. John Maraganore was CEO of Alnylam from 2002 to 2021, where he led the Company through global approvals and commercialization of four RNA interference therapeutic medicines. While at Alnylam, Dr.
Removed
Our board of directors may amend or terminate the 2021 Plan at any time, but no such action will affect any outstanding award in any manner materially adverse to a participant without the consent of the participant. Plan amendments will be submitted to shareholders for their approval as required by applicable law or deemed necessary or advisable by the board.
Added
Maraganore also led value creation efforts, forming over 20 major pharmaceutical alliances and building over $25 billion of market capitalization. As a partner or advisor with ARCH Venture Partners, Atlas Ventures, Blackstone Life Sciences, Jefferies Financial Services, and RTW Investments, Dr. Maraganore also sits on public and private company Boards of Directors and actively advises and mentors life sciences CEOs.
Removed
(4) 4,093,500 7.0 % F-Prime Capital Partners Healthcare Fund III LP (5) 3,226,037 5.5 % Wuxi Pharmatech Healthcare Fund I L.P. (6) 4,978,628 8.5 % General Atlantic Singapore AI Pte. Ltd. (7) 4,782,440 8.1 % Panacea Venture Healthcare Fund II, L.P.
Added
Dr. Maraganore received his B.A., M.S. and Ph.D. in biochemistry and molecular biology at the University of Chicago. From 2021 to 2024 Dr. Axel Hoos served as CEO of Scorpion Therapeutics, which was acquired by Eli Lilly in 2025 for up to $2.5 billion. Previously, Dr.
Removed
(4) Represents 4,093,500 ordinary shares, consisting of (i) 2 ordinary shares and (ii) 4,093,498 ordinary shares in the form of ADSs, are held of record by Asia Ventures II L.P., a limited partnership incorporated in the Bermuda. The general partner of Asia Ventures II L.P. is Asia Partners II L.P. a Bermuda exempt limited partnership.
Added
Hoos was the SVP and Head of the Oncology Therapeutic Area at GSK, where he oversaw the rebuilding of GSK’s Oncology business after its divestiture to Novartis in 2015. Prior to GSK, Dr.
Removed
The general partner of Asia Partners II L.P. is Eight Roads GP, who is ultimately controlled by Eight Roads Holdings Limited. The registered address of Asia Ventures II L.P. is Pembroke Hall, 42 Crow Lane, Pembroke, Bermuda HM 19. Information set forth above is based upon FIL Limited’s Schedule 13G/A filing with the SEC on February 12, 2025.
Added
Hoos was the Global Medical Lead in Immunology/Oncology at Bristol-Myers Squibb (BMS) where he and his team developed YERVOY ® (Ipilimumab), the first immune checkpoint inhibitor drug, and created the term Immuno-Oncology to characterize the interplay of the immune system and cancer in immunotherapy drug development. Dr.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Related Party Transactions The following is a summary of transactions since January 1, 2024 to which we have been a participant in which any of our then directors, executive officers or holders of more than 10% of any class of our voting securities at the time of such transaction, or any members of their immediate family, had or will have a direct or indirect material interest.
Related Party Transactions The following is a summary of transactions since January 1, 2025 to which we have been a participant in which any of our then directors, executive officers or holders of more than 10% of any class of our voting securities at the time of such transaction, or any members of their immediate family, had or will have a direct or indirect material interest.
Transactions with WuXi Biologics (Cayman) Inc. or WuXi Biologics We received research and development services, including provision of manufacturing and quality control testing services, from WuXi Biologics, an entity controlled by the ultimate controlling party of one of our principal shareholders. The amounts for the purchase of the services were US$1.5 million in 2024.
Transactions with WuXi Biologics (Cayman) Inc. or WuXi Biologics We received research and development services, including provision of manufacturing and quality control testing services, from WuXi Biologics, an entity controlled by the ultimate controlling party of one of our principal shareholders. The amounts for the purchase of the services were US$1.5 million in 2025.
As of December 31, 2024, the amounts due to WuXi Biologics were US$12.6 million. ​ 7.C. Interests of Experts and Counsel Not applicable.
As of December 31, 2025, the amounts due to WuXi Biologics were US$10.1 million. ​ 7.C. Interests of Experts and Counsel Not applicable.
The amounts for the purchase of the services were US$0.5 million in 2024. As of December 31, 2024, the amounts due to WuXi AppTec Group were US$0.6 million.
The amounts for the purchase of the services were US$0.1 million in 2025. As of December 31, 2025, the amounts due to WuXi AppTec Group were US$0.2 million.

Other ADAG 10-K year-over-year comparisons