Adagene Inc. (ADAG): Business Model Canvas [Dec-2025 Updated]

You're looking past the stock ticker to understand how Adagene Inc. (ADAG) actually makes money, and the answer is simple: it's a platform play. The company's entire value proposition is built on its proprietary $\mathrm{SAFE}{\mathrm{TM}}$ and $\mathrm{NEOE}{\mathrm{TM}}$ platforms, which create precision-masked antibodies to reduce toxicity-a huge win for oncology. This model requires massive upfront investment, with R&D expenses alone estimated at over $100 million for the 2025 fiscal year, but the payoff comes from lucrative, multi-stage licensing agreements with global pharma partners. We need to defintely unpack how this focus on intellectual property (IP) and milestone payments shapes their near-term risks and long-term potential.

Adagene Inc. (ADAG) - Canvas Business Model: Key Partnerships

Adagene's business model is heavily reliant on strategic partnerships, which is typical for a platform-driven, clinical-stage biotech. These collaborations validate their proprietary Dynamic Precision Library (DPL) technology-specifically the SAFEbody precision masking-and provide crucial non-dilutive capital, shifting the development and commercialization risk to larger global players.

You can see this strategy in their recent deals, which brought in an upfront payment of $5 million from Third Arc Bio in late 2025 and a strategic investment of up to $25 million from Sanofi in July 2025. Honestly, these deals are the financial lifeblood that extends their cash runway into 2027.

Global pharmaceutical companies for co-development and licensing

These partnerships are the primary engine for external validation and revenue generation, allowing Adagene to monetize its SAFEbody platform across different therapeutic areas and geographies. The agreements are structured to provide immediate cash flow through upfront payments and significant long-term upside via milestone payments and sales royalties.

A great example is the November 2025 licensing agreement with Third Arc Bio for two masked CD3 T cell engagers. Third Arc Bio took on the worldwide rights for development and commercialization, paying Adagene an upfront fee of $5 million. Plus, Adagene is eligible for up to $840 million in development and commercial milestones, which is a massive potential return on their platform technology.

Adagene also maintains a strong relationship with Merck (known as MSD outside the US and Canada), which supplies KEYTRUDA (pembrolizumab) for the combination trials of Adagene's lead candidate, muzastotug (ADG126), in microsatellite stable colorectal cancer (MSS CRC).

Partner	Collaboration Type	2025 Financial/Strategic Impact
Third Arc Bio	Licensing & Co-Development (SAFEbody)	$5 million upfront payment (Nov 2025); up to $840 million in potential milestones.
Sanofi	Strategic Investment & Clinical/Discovery	Up to $25 million strategic equity investment (July 2025); funding a Phase 1b/2 trial of ADG126 in over 100 patients.
Merck (MSD)	Clinical Supply Agreement	Supply of KEYTRUDA (pembrolizumab) for the ADG126 Phase 1b/2 and planned Phase 2/3 trials in MSS CRC.
Exelixis	Technology License (ADC)	Received over $18 million in total to date, including upfront and milestones, for masked antibody-drug conjugate (ADC) candidates.

Contract Research Organizations (CROs) for clinical trial execution

While Adagene does not publicly name its primary Contract Research Organizations (CROs), the sheer scope of their clinical development requires extensive external support. The CROs handle the operational heavy lifting for trials like the Phase 1b/2 study of ADG126, which showed a median Overall Survival (mOS) of 19.4 months in the 10 mg/kg cohort of MSS CRC patients.

This partnership category is all about speed and global reach. Their clinical programs span the US and Asia, so they need CROs with established infrastructure to manage patient enrollment, site monitoring, and data collection to support the planned Phase 2 trial enrollment in the second half of 2025.

Contract Manufacturing Organizations (CMOs) for drug substance production

As a clinical-stage biotech, Adagene outsources the complex, high-cost process of manufacturing its drug candidates, such as the recombinant antibody for ADG126. These Contract Manufacturing Organizations (CMOs) are essential for ensuring a reliable supply of clinical-grade drug substance and drug product that meets Good Manufacturing Practice (GMP) standards.

The CMO relationship mitigates the massive capital expenditure of building and operating their own manufacturing plants. This is a crucial risk-mitigation step, allowing Adagene to focus its R&D expenses-which were $12.0 million for the first six months of 2025-on core discovery and clinical strategy, instead of production logistics.

Academic institutions for basic research and discovery

Adagene collaborates with academic and clinical centers to explore novel applications of their platform and gather real-world data. These partnerships often manifest as Investigator-Initiated Trials (IITs) which provide low-cost, high-value clinical insights.

A concrete 2025 example is the investigator-initiated neoadjuvant trial for ADG126 in Stage II or Stage III colorectal cancer, which began enrollment in April 2025 at the National University Cancer Institute in Singapore. This type of collaboration is defintely a smart way to expand the clinical footprint of ADG126 without draining the company's own clinical budget. [cite: 15 (from previous search)]

Regulatory bodies (FDA, EMA, NMPA) for drug approval processes

The regulatory bodies are non-financial partners, but they are the ultimate gatekeepers of market access. Adagene's primary focus in 2025 has been the US Food and Drug Administration (FDA).

The key event was the productive Type B (End of Phase 1) meeting with the FDA in July 2025, which provided a clear path forward. The FDA agreed with the proposed Phase 2 and Phase 3 trial design elements for ADG126 in MSS CRC, including the critical confirmation that a monotherapy arm for ADG126 is not required in the pivotal Phase 3 study. This alignment streamlines the development process significantly.

• FDA Alignment: Confirmed Phase 3 primary endpoint will be Overall Survival (OS).
• Phase 2 Design: Will randomize approximately 30 patients per arm to either 10 mg/kg or 20 mg/kg of ADG126. [cite: 15 (from previous search)]
• Global Scope: Adagene's no-cost option to develop and commercialize partnered candidates in Greater China, Singapore, and South Korea, which signals a future focus on the NMPA (China) and other regional regulatory bodies.

Adagene Inc. (ADAG) - Canvas Business Model: Key Activities

Adagene Inc.'s Key Activities are laser-focused on translating their proprietary technology platforms into clinical-stage assets and securing the commercial runway through strategic partnerships. It's a biotech model where R&D isn't just an expense; it's the core product and the primary driver of value creation.

The biggest near-term activity is the disciplined advancement of their lead candidate, Muzastotug (ADG126), and the simultaneous expansion of their platform licensing deals, which brought in a $5 million upfront payment from Third Arc Bio in November 2025. That's how a clinical-stage company manages risk and cash flow-you defintely need that dual focus.

Research and development (R&D) of novel antibody candidates

The most critical activity is the continuous innovation and optimization of novel antibody candidates, primarily through their Dynamic Precision Library (DPL) platform. The financial commitment to this is clear: R&D expenses were US$12.0 million for the six months ended June 30, 2025.

Here's the quick math: that figure represents an approximately 18% decrease from the same period in 2024, reflecting a strategic prioritization on their most advanced clinical asset, ADG126. This focus is a necessary trade-off to extend their cash runway, which, following the Sanofi strategic investment, is now projected into 2027.

Key R&D efforts include:

• Designing masked, conditionally active antibodies (SAFEbody).
• Developing bispecific and multi-specific T cell engagers (TCEs).
• Generating novel antibodies using computational biology and AI (NEObody, POWERbody).

Advancing drug candidates through clinical trial phases

This activity is the biggest value inflection point. The primary focus in late 2025 is the progression of Muzastotug (ADG126), their masked anti-CTLA-4 SAFEbody. The company achieved alignment with the FDA on the design elements for Phase 2 and Phase 3 trials, which is a major streamlining event.

The Phase 2 study in microsatellite stable (MSS) colorectal cancer (CRC) has already begun enrolling patients in the second half of 2025 (2H 2025), with the first patient dosed in the randomized dose optimization cohort in October 2025. The clinical data is the proof: the 10 mg/kg cohorts showed a 19.4-month median overall survival (mOS), which is highly competitive.

Candidate	Target/Mechanism	Trial Phase (Late 2025)	Key Clinical Metric (2025 Data)
Muzastotug (ADG126)	Masked anti-CTLA-4 SAFEbody	Phase 1b/2 & Phase 2	19.4-month median OS in 10 mg/kg MSS CRC cohort
Third Arc Bio Candidates (2)	Masked CD3 T cell engagers (SAFEbody)	Pre-clinical/Discovery	Upfront payment of $5 million received in November 2025
Sanofi Program (Third Option)	SAFEbody Discovery Program	Discovery	Option exercised in July 2025

Maintaining and improving proprietary SAFE and NEO technology platforms

The platforms-SAFEbody (precision masking), NEObody (computational biology), and POWERbody-are the core engine of the business. The activity here is two-fold: internal application to advance their own pipeline and external validation through licensing.

The SAFEbody technology, which conditionally activates the antibody in the tumor microenvironment, is the key differentiator, allowing for higher dosing (10 to 20 times higher for ADG126) while keeping Grade 3 treatment-related adverse events below 20%. The licensing deals confirm the platform's value.

Recent platform-focused activities include:

• Expanding the collaboration with Exelixis in September 2025 for a third novel masked antibody-drug conjugate (ADC).
• Licensing SAFEbody to Third Arc Bio for two CD3 T cell engagers, with potential milestones up to $840 million.
• Providing a proprietary antibody to ConjugateBio in July 2025 for their bispecific ADC development programs.

Securing and defending Intellectual Property (IP) rights globally

In a platform-driven biotech, IP is everything. This activity is about building a defensive moat around the core technologies and the resulting drug candidates. As of November 6, 2025, Adagene Inc. holds 104 total patent documents/applications and grants. The IP portfolio covers the underlying technology and specific molecules.

This activity ensures that the value created by R&D is protected for future revenue streams (milestones and royalties). For example, a patent for Anti-CD137 molecules was granted in August 2025 (Patent No. 12378319). You have to protect the science.

Managing regulatory submissions and compliance

Regulatory management is a critical activity that directly impacts the speed and cost of development. The main recent win here is the alignment with the U.S. Food and Drug Administration (FDA) on the Phase 2 and Phase 3 trial design for ADG126.

Crucially, this alignment means they can streamline the development pathway by not requiring a Muzastotug (ADG126) monotherapy arm in the pivotal trials. This cuts both time and cost, accelerating the path to a potential Biologics License Application (BLA) submission.

Adagene Inc. (ADAG) - Canvas Business Model: Key Resources

Adagene Inc.'s core value proposition is built on its proprietary technology platforms and the deep expertise of its human capital, which together form an impressive intellectual property moat. For the first half of 2025, the company's commitment to these assets is clear, with Research and Development (R&D) expenses totaling US$12.0 million, a direct investment in maintaining this competitive edge. This is a platform-first business, so the technology is the main asset.

Proprietary $\mathrm{SAFE}{\mathrm{TM}}$ (Sterically Hindered Antibody Engineering) platform

The $\mathrm{SAFEbody}{\circledR}$ platform is Adagene's most commercially validated resource, designed to solve the critical safety and tolerability issues of powerful antibody therapeutics by precision masking. This technology shields the antibody's binding domain, ensuring it only activates in the tumor microenvironment (TME), which allows for significantly higher dosing and a wider therapeutic window.

This resource is validated by major pharmaceutical partnerships. In a significant 2025 event, Sanofi exercised an option on a third $\mathrm{SAFEbody}$ discovery program, which triggers an option exercise fee, plus potential milestones and royalties. The $\mathrm{SAFEbody}{\circledR}$ platform has been applied to a wide range of modalities, including Fc empowered antibodies, antibody-drug conjugates (ADCs), and bi/multispecific T-cell engagers.

Proprietary $\mathrm{NEOE}{\mathrm{TM}}$ (Novel Epitope-Directed Antibody Engineering) platform

The $\mathrm{NEObody}{\mathrm{TM}}$ platform, alongside $\mathrm{SAFEbody}{\circledR}$ and $\mathrm{POWERbody}{\mathrm{TM}}$, forms the company's broader Dynamic Precision Library (DPL) platform, which uses computational biology and artificial intelligence to design novel antibodies. This resource is essential for the initial discovery phase, allowing Adagene to generate therapeutic candidates with unique functional epitopes and species cross-reactivity that are often intractable to traditional antibody technology.

This discovery engine is the foundation for the entire pipeline, enabling the company to pursue novel drug targets and design next-generation immunotherapies. Honestly, the DPL is what makes the whole thing work.

Clinical-stage drug candidates (e.g., ADG126, ADG106, ADG153)

The clinical pipeline represents the most tangible near-term value of the R&D efforts. The lead candidate, ADG126 (muzastotug), is a masked anti-CTLA-4 $\mathrm{SAFEbody}$ that has shown promising results in late-stage trials, which is a key resource for future revenue streams.

Here are the key clinical candidates and their status as of late 2025:

• ADG126 (muzastotug): Currently in Phase 1b/2 studies in combination with pembrolizumab for Metastatic Microsatellite-stable (MSS) Colorectal Cancer (CRC).
  • Median Overall Survival (mOS) for 10 mg/kg cohorts reached 19.4 months (in NLM patients), which is significantly higher than historical benchmarks.
  • Confirmed Overall Response Rate (ORR) in MSS CRC is 29%.
  • Adagene gained alignment with the FDA on Phase 2 and Phase 3 trial designs, with Phase 2 enrollment starting in the second half of 2025.
  • Over 150 patients have received ADG126 to date in clinical trials.
• ADG106: A clinical-stage candidate, demonstrating the platform's versatility beyond ADG126.
• ADG153: A preclinical-stage candidate, showing the continuous feed of novel molecules from the discovery platforms.

Experienced R&D scientists and clinical development teams

The human capital is the engine translating the intellectual property into clinical assets. Adagene's team is a critical resource, bringing deep experience from global biopharma to manage complex oncology development programs.

Here's the quick math on the team's depth:

• Total Employees: 138 (as of 2024, the most recent public figure).
• Average Management Tenure: 7.1 years, indicating a seasoned leadership team.
• Key Roles: The team includes a Chief Manufacturing Officer with over 25 years of drug development experience and an Executive Vice President of Clinical Development with over 20 years of physician-scientist experience.

Extensive global patent portfolio covering platform and molecules

The patent portfolio is the defensive and offensive financial asset that protects the core technology and the pipeline. This intellectual property provides a significant barrier to entry for competitors and underpins the high-value licensing deals with partners like Sanofi and Exelixis. The $\mathrm{SAFEbody}{\circledR}$ technology, for example, is a registered trademark in the United States, China, Australia, Japan, Singapore, and the European Union.

The portfolio is substantial and growing, as shown in the table below, with data current as of November 2025:

Patent Metric (as of Nov 2025)	Amount/Value	Significance
Total Patent Documents (Applications and Grants)	104	Broad protection across technology and pipeline.
Total Patent Families	48	Represents distinct inventive concepts being protected globally.
Granted Patents	31	The number of fully secured, enforceable patents.
$\mathrm{SAFEbody}{\circledR}$ Technology Registration	Registered in 6 major global jurisdictions	Secures core platform in key pharmaceutical markets (US, EU, China, etc.).

What this estimate hides is the strategic value of the Sanofi partnership, which includes potential milestone payments of up to US$2.5 billion plus tiered royalties, all based on the strength of the $\mathrm{SAFEbody}$ platform IP. That's the real measure of the patent portfolio's worth.

Adagene Inc. (ADAG) - Canvas Business Model: Value Propositions

The core value proposition for Adagene Inc. is simple: they are solving the fundamental trade-off between efficacy and safety in oncology by delivering conditionally active antibodies. You're not just buying a drug; you're buying a platform-the Dynamic Precision Library (DPL)-that promises a wider therapeutic index (the dose range between therapeutic effect and toxicity) than conventional biologics. This is a defintely a game-changer for difficult-to-treat cancers.

Novel, differentiated antibody therapeutics with improved safety profiles

Adagene's value starts with its proprietary technology platforms, notably NEObody™, SAFEbody®, and POWERbody™, which combine computational biology and artificial intelligence to design novel antibodies. The goal is to address the high toxicity that has historically limited the use of powerful immune checkpoint inhibitors like anti-CTLA-4 therapies. Their lead candidate, Muzastotug (ADG126), an anti-CTLA-4 SAFEbody, exemplifies this by targeting a unique epitope of CTLA-4 on regulatory T cells (Tregs) in the tumor microenvironment, which is a highly differentiated approach.

Here's the quick math on the financial side, which shows where the focus is:

Financial Metric (Six Months Ended June 30, 2025)	Amount (US$)	Context
Cash and Cash Equivalents	$62.8 million	Provides runway into 2027, extended by partnerships.
Net Loss	$13.5 million	Reduced from $17.0 million in H1 2024, showing cost control.
R&D Expenses	$12.0 million	An 18% decrease from H1 2024, reflecting prioritization on lead assets like ADG126.

Precision-masked antibodies that activate only in the tumor microenvironment

The SAFEbody® technology is the most critical value driver, using precision masking to shield the antibody's binding domain. This means the therapeutic is essentially inert until it encounters the unique environment of the tumor, where the mask is removed, and the drug becomes fully active. This conditional activation is what allows for a significantly wider therapeutic index, enabling higher dosing than standard therapies. For instance, the CEO noted that ADG126 was dosed 10 to 20 times higher than approved CTLA-4 inhibitors to drive the desired depletion of regulatory T-cells inside tumors.

Platform licensing offers partners access to next-generation antibody discovery

Adagene's technology is a valuable asset in its own right, leading to significant licensing and collaboration deals that validate the platform. This provides a crucial, non-dilutive revenue stream. You can see the clear market interest in this precision approach from the deals signed in 2025 alone:

• Third Arc Bio: Signed a November 2025 agreement for two masked CD3 T cell engagers, providing an upfront payment of $5 million and eligibility for up to $840 million in potential milestones.
• Sanofi: Made a strategic investment of up to $25 million in July 2025 and exercised an option for a third SAFEbody discovery program.
• Exelixis: Expanded their collaboration in September 2025 to develop a third novel masked antibody-drug conjugate (ADC). Adagene has received over $18 million in total from Exelixis to date.
• ConjugateBio: Partnered in July 2025 to develop novel antibody drug conjugates, leveraging Adagene's proprietary antibody.

Potential for best-in-class efficacy in oncology indications

The clinical data for ADG126 in combination with Merck's KEYTRUDA® (pembrolizumab) in microsatellite stable colorectal cancer (MSS CRC) is a strong value point. In the 10 mg/kg dose cohort, the median Overall Survival (mOS) was 19.4 months, which compares favorably to historical benchmarks for similar patient populations (like fruquintinib at 10.8 to 12.1 months). Furthermore, the confirmed Overall Response Rate (ORR) was 29% in MSS CRC patients. That's a powerful number in a tough-to-treat cancer. Enrollment for the Phase 2 trial is planned for the second half of 2025, following alignment with the FDA on the Phase 2 and Phase 3 trial design elements.

Reduced systemic toxicity compared to conventional biologics

This is where the rubber meets the road for patient benefit and commercial viability. The conditional activation of SAFEbody® technology dramatically reduces on-target off-tumor toxicity. In the ADG126 Phase 1b/2 study, Grade 3 treatment-related adverse events (TRAEs) were observed in less than 20% of patients, even at the high 20 mg/kg dose. This low toxicity profile is what allows the higher dosing, which in turn drives better efficacy, creating a truly wide therapeutic window. The data suggests the power of CTLA-4 inhibition can be harnessed much more safely with their approach.

Adagene Inc. (ADAG) - Canvas Business Model: Customer Relationships

Adagene Inc.'s customer relationships are built on deep, high-value partnerships with major pharmaceutical companies, rigorous regulatory engagement, and transparent scientific communication. You can see this isn't a volume business; it's about securing a few critical, long-term relationships that validate the proprietary technology and provide non-dilutive funding.

High-touch, dedicated business development for strategic pharma partners

The core of Adagene's revenue model relies on securing and expanding strategic collaborations, which requires a highly personalized, dedicated business development approach. These relationships are the primary mechanism for monetizing their Dynamic Precision Library (DPL) platform, which includes the SAFEbody® precision masking technology.

The financial success of this relationship model is evident in the 2025 deal flow:

• Third Arc Bio Licensing: Announced in November 2025, this deal for two masked CD3 T cell engagers included an upfront payment of $5 million. Adagene is eligible to receive up to $840 million in development and commercial milestones, plus royalties.
• Sanofi Strategic Investment: In July 2025, Sanofi agreed to a strategic investment of up to $25 million, which helps extend Adagene's cash runway into 2027. This investment also included an option exercise for a third SAFEbody discovery program.
• Exelixis Expansion: The SAFEbody collaboration was expanded in September 2025 to develop a third novel masked Antibody-Drug Conjugate (ADC). Adagene has received over $18 million in total from Exelixis to date from this partnership.
• Merck (KEYTRUDA®): The ongoing clinical collaboration for the ADG126 (muzastotug) program is a key relationship, providing a supply of Merck's anti-PD-1 therapy, KEYTRUDA® (pembrolizumab), for their combination trials.

This is defintely a white-glove service model, focused on co-development and technology licensing, not transactional sales.

Professional, transparent communication with regulatory agencies

For a clinical-stage biotech, the relationship with regulatory bodies like the U.S. Food and Drug Administration (FDA) is paramount. It determines the speed and cost of getting a drug to market. Adagene's approach here is professional and highly transparent, aiming for early alignment to de-risk the development pathway.

A major milestone in 2025 was the productive Type B (End of Phase 1) meeting with the FDA in July.

Here's the quick math on the ADG126 Phase 2 trial design they agreed on:

Trial Element	FDA Alignment Outcome (July 2025)
Drug/Indication	muzastotug (ADG126) + KEYTRUDA® in MSS CRC
Phase 2 Patient Enrollment	Approximately 30 patients in each arm
Phase 2 Dosing Arms	Randomized to either 10 mg/kg or 20 mg/kg of ADG126
Monotherapy Arm Requirement	Not required in the Phase 2 or pivotal Phase 3 study
Phase 2 Enrollment Start	Planned for the second half of 2025

Gaining this alignment removes a significant regulatory hurdle, giving investors and partners a clear line of sight to a potential registrational trial.

Scientific engagement via publications and conference presentations

Adagene uses scientific forums as a primary communication channel to validate its platform and pipeline data to the medical community, which in turn drives partner interest and KOL support. This is a scientific marketing strategy.

Key 2025 data presentations:

• 2025 American Society of Clinical Oncology (ASCO) Annual Meeting: Presented updated Phase 1b/2 data for ADG126. The data showed a median Overall Survival (mOS) of 19.4 months in the 10 mg/kg dose cohort for MSS CRC patients without liver metastasis, comparing favorably to historical benchmarks.
• 2025 Chinese Society of Clinical Oncology (CSCO) Meeting: ADG126 was the subject of two oral presentations in September 2025.
• Jefferies Global Healthcare Conference 2025: Presented corporate and pipeline updates to a financial audience in May 2025.

Investor relations for capital market confidence and funding

The Investor Relations function is crucial for a clinical-stage company with limited commercial revenue (Trailing 12-month revenue of $103K as of June 30, 2025). The goal is to maintain capital market confidence to support a market capitalization of around $91.9 million (as of June 30, 2025) and secure future funding.

The July 2025 Sanofi investment of up to $25 million was a major IR win, directly addressing cash runway concerns. The company reported a net loss of $13.5 million for the first six months of 2025, which underscores the need for continuous, positive communication on clinical and partnership progress to offset R&D expenses of $12.0 million for the same period. They also recently appointed a Chief Strategy Officer and an Executive Advisor in 2025 to strengthen strategic planning and external business development, which is a direct investment in the investor relationship.

Direct communication with key opinion leaders (KOLs)

KOLs are the medical community's influencers. Adagene engages them directly to drive adoption and credibility for their clinical programs, using a personal, scientific advisory model.

This is managed through:

• Advisory Appointments: Appointing industry veterans like John Maraganore, Ph.D., as Executive Advisor in April 2025 to provide strategic guidance.
• Scientific Advisory Board (SAB) Engagement: Utilizing SAB members, such as Dr. Lenz, who serve as unpaid members and are key presenters of clinical data at major conferences like CSCO.
• Clinical Trial Design: Working with leading investigators to design and execute trials like the Phase 2 study of ADG126, which is enrolling approximately 60 patients in total.

These relationships ensure the clinical data is interpreted and disseminated by the most trusted voices in oncology.

Adagene Inc. (ADAG) - Canvas Business Model: Channels

You're looking at Adagene Inc., and what you see is a biotech company that uses its channel strategy to validate its technology and bring in non-dilutive capital. Their channels are not traditional sales but strategic partnerships, scientific forums, and direct regulatory engagement. This approach is defintely working to de-risk the pipeline and extend their cash runway.

Direct out-licensing agreements with major pharmaceutical firms

Adagene's primary commercial channel is the direct out-licensing of its proprietary SAFEbody® (precision masking technology) platform and pipeline assets to major pharmaceutical and biotech partners. This strategy translates their scientific innovation directly into revenue, mostly through upfront payments and milestone fees. These deals are crucial because they validate the platform and provide significant capital to fund internal research.

For example, in a deal announced on November 13, 2025, Adagene licensed its SAFEbody technology to Third Arc Bio for developing masked CD3 T cell engagers. This single deal included an upfront payment of $5 million, plus eligibility for up to $840 million in potential development and commercial milestones, and royalties on eventual sales. The company also has an ongoing, multi-program collaboration with Exelixis, from which Adagene has received over $18 million in total payments to date, under a technology license agreement.

Key partnerships and their 2025 financial channel impact include:

• Sanofi: Strategic investment of up to $25 million announced in July 2025, plus an option exercise fee and potential milestones for a third SAFEbody discovery program.
• Third Arc Bio: $5 million upfront payment in November 2025 for SAFEbody licensing.
• Exelixis: Collaboration expanded in September 2025 to a third novel masked Antibody-Drug Conjugate (ADC) candidate.
• ConjugateBio: Partnering agreement established in July 2025 for novel ADC development.

Scientific and medical conferences for data presentation

Scientific conferences are a critical channel for Adagene to build credibility and attract new partners by showcasing compelling clinical data. It's where the market sees the 'proof of concept' for their technology. The data presented at these forums is a direct communication channel to the global oncology community.

The 2025 American Society of Clinical Oncology (ASCO) Annual Meeting was a key channel, where Adagene presented Phase 1b/2 data for its lead asset, ADG126 (muzastotug), in combination with Merck's KEYTRUDA® (pembrolizumab) for microsatellite stable colorectal cancer (MSS CRC). The results showed a median Overall Survival (mOS) of 19.4 months in the 10 mg/kg cohorts, which is a significant clinical benchmark.

Other major scientific channel activities in 2025 included:

• 2025 Chinese Society of Clinical Oncology (CSCO) Meeting: ADG126 data was highlighted in two oral presentations in September 2025.
• Immuno-Oncology 360⁰ Summit 2025: Used to disseminate platform and pipeline updates to a specialized audience.

Direct interaction with regulatory agencies for Investigational New Drug (IND) and Biologics License Application (BLA) submissions

The regulatory channel is where the clinical strategy gets validated and the path to market is defined. In July 2025, Adagene announced key outcomes from its Type B (End of Phase 1) meeting with the U.S. Food and Drug Administration (FDA). This interaction provided alignment on the design elements for the upcoming Phase 2 and Phase 3 trials for ADG126 in MSS CRC.

The FDA agreed that the Phase 2 trial will randomize approximately 30 patients to either the 10 mg/kg or 20 mg/kg dose of ADG126 in combination with pembrolizumab, and crucially, an ADG126 monotherapy arm is not required. This alignment simplifies the path forward. Following this, the company announced on October 31, 2025, that the first patient had been dosed in the randomized dose optimization cohort of the Phase 2 study.

Investor roadshows and financial media for capital access

For a clinical-stage biotech, the investor relations channel is a primary source of funding. The company maintains a consistent presence at major financial conferences to communicate its clinical progress and financial stability directly to institutional investors and analysts. This is how they secure the capital needed to maintain operations.

The strategic investment of up to $25 million from Sanofi in July 2025 is the most concrete result of this channel activity, extending the company's cash runway into 2027. As of June 30, 2025, the company reported Cash and Cash Equivalents of $62.8 million.

Key investor engagement events in 2025 included:

• Leerink's Global Healthcare Conference 2025 (March).
• Jefferies Global Healthcare Conference 2025 (May).
• H.C. Wainwright 27th Annual Global Investment Conference (September).
• Morgan Stanley 23rd Annual Global Healthcare Conference (September).

Peer-reviewed journals for scientific validation

While peer-reviewed journal articles are the gold standard for scientific validation, in the fast-moving biotech space, major conference presentations often serve as the first public disclosure of pivotal data. Adagene uses its website and press releases to amplify the scientific data presented at major forums like ASCO, which serves as a highly credible, near-term validation channel for their technology platforms (SAFEbody®, NEObody™, and POWERbody™) and clinical candidates like ADG126.

The table below summarizes the 2025 financial and clinical impact delivered through Adagene's key channels:

Channel	2025 Key Partner/Activity	2025 Financial/Clinical Value	Notes
Direct Out-Licensing	Third Arc Bio Licensing Agreement	$5 million upfront, up to $840 million in milestones.	Licensed SAFEbody for two masked CD3 T cell engagers (Nov 2025).
Direct Out-Licensing	Sanofi Strategic Investment/Option	Up to $25 million strategic investment.	Exercised option for third SAFEbody program (July 2025).
Scientific Conferences	2025 ASCO Annual Meeting	ADG126 mOS of 19.4 months in MSS CRC (10 mg/kg cohorts).	Data presented for ADG126 + KEYTRUDA® combination.
Regulatory Agencies	FDA Type B Meeting	Alignment on Phase 2/3 trial design.	Eliminated requirement for ADG126 monotherapy arm in Phase 2.
Investor Roadshows	Cash and Cash Equivalents	$62.8 million as of June 30, 2025.	Excludes July 2025 Sanofi equity proceed.

Adagene Inc. (ADAG) - Canvas Business Model: Customer Segments

You're looking at Adagene Inc. and trying to figure out who actually pays the bills-or will eventually. For a clinical-stage biotech like this, the customer segments are dual: the immediate, revenue-generating partners and the eventual, life-saving end-users. This isn't a simple consumer business; it's a platform-driven, asset-light model where the big pharmaceutical companies are the primary, near-term paying customers for the technology, while patients and prescribers are the ultimate market.

The core value proposition, the SAFEbody precision masking technology (a proprietary system to shield the binding domain of a therapeutic antibody until it reaches the tumor microenvironment), is sold to Big Pharma. The clinical-stage drug candidates, like ADG126, are aimed squarely at the patient population.

Global pharmaceutical and biotechnology companies seeking novel assets

This segment is Adagene's most important source of current revenue and cash runway extension. They license Adagene's proprietary platform, like SAFEbody, to develop their own next-generation antibody-based therapies, essentially outsourcing the high-risk, early-stage engineering.

We saw this play out in 2025 with multiple high-value deals. The most recent was the November 2025 licensing agreement with Third Arc Bio, providing an upfront payment of US$5 million and eligibility for up to US$840 million in potential development and commercial milestones. This is how Adagene funds its own pipeline. Also in 2025, Sanofi made a strategic investment of up to US$25 million, helping to extend Adagene's cash runway into 2027. They are buying the platform, not the final drug (yet).

Here's the quick math on the major partnerships:

Partner	Collaboration Focus	Financial Value (Total Potential)	Status (2025)
Sanofi	SAFEbody platform licensing (monoclonal and bispecific candidates)	Up to US$2.5 billion in milestones + royalties	Strategic Investment of $25M in July 2025
Third Arc Bio	Masked CD3 T cell engagers (SAFEbody)	Up to US$840 million in milestones	Agreement announced November 2025
Exelixis	Masked Antibody-Drug Conjugates (ADCs)	Over US$18 million received to date	Ongoing technology license agreement

Patients with advanced solid tumors and hematological malignancies

The ultimate customer is the patient with an unmet medical need, specifically those with cancers that don't respond well to current immunotherapies. Adagene's lead asset, ADG126 (muzastotug), is focused on advanced solid tumors, particularly microsatellite stable colorectal cancer (MSS CRC). This is a patient population that historically sees little benefit from checkpoint inhibitors.

The clinical data is the proof point for this segment. At the 2025 American Society of Clinical Oncology (ASCO) Annual Meeting, Adagene presented Phase 1b/2 data showing a median Overall Survival (mOS) of 19.4 months in the 10 mg/kg cohort of MSS CRC patients free of liver metastasis. That's a defintely compelling number, comparing favorably to historical benchmarks of 10.8 months to 12.1 months. The confirmed Overall Response Rate (ORR) in MSS CRC was 29%. The company is also exploring other advanced solid tumors via a Phase 1b/2 trial with Sanofi, enrolling over 100 patients.

Oncologists and specialists who prescribe novel treatments

These are the key decision-makers who will ultimately adopt the therapy. Their primary concerns are efficacy and safety, especially tolerability at high doses. The unique selling point for them is the improved therapeutic index (the balance between efficacy and toxicity) achieved through the SAFEbody technology.

What matters to oncologists is that ADG126, an anti-CTLA-4 antibody, can be dosed 10 to 20 times higher than approved CTLA-4 inhibitors, yet still show Grade 3 treatment-related adverse events of less than 20%. They want to see:

• High efficacy (19.4 months mOS in a tough-to-treat population).
• Manageable toxicity (Grade 3 adverse events below 20%).
• Regulatory clarity (FDA alignment on Phase 2/3 design).

Institutional investors focused on high-growth biotech

As a publicly traded company on Nasdaq (ADAG), Adagene's investors are a critical customer segment, providing the capital needed to survive the long, expensive clinical development cycle. They are buying equity, driven by the platform's potential and the near-term clinical data.

As of November 2025, the company's market capitalization stands at approximately $83.42 million. Their investment decision is heavily influenced by the burn rate and cash position. The net loss attributable to shareholders for the six months ended June 30, 2025, was US$13.5 million, with R&D expenses at US$12.0 million for the same period. The Sanofi investment and licensing deals are what keep this segment engaged, as they de-risk the financial picture.

Regulatory authorities (FDA, EMA, NMPA) as key stakeholders

While not a paying customer, the regulatory bodies are a critical stakeholder whose approval is required to commercialize the product. Adagene's business model depends entirely on successfully navigating the clinical and regulatory pathway.

The company gained alignment with the United States Food and Drug Administration (FDA) in the second half of 2025 on the design elements for its upcoming Phase 2 and Phase 3 trials for ADG126 in MSS CRC. This alignment, specifically on the inclusion/exclusion criteria and the use of a standard-of-care control arm, is a major de-risking event that directly impacts the value proposition for all other customer segments.

Adagene Inc. (ADAG) - Canvas Business Model: Cost Structure

You're looking at Adagene Inc.'s cost structure, and the immediate takeaway is that this is a classic clinical-stage biotech profile: costs are overwhelmingly concentrated in Research and Development (R&D), and they are variable based on clinical trial progress. The company is in a capital-intensive phase, but recent cost-control measures and strategic partnerships have kept the burn rate lower than some might expect.

Based on the first half of 2025 (H1 2025) financial results, Adagene's total operating expenses are trending toward approximately $31.4 million for the full year, a figure dominated by R&D spending. This is a significant expense, but far below the multi-hundred-million-dollar outlays seen in late-stage Phase 3 trials, which is the next major financial hurdle.

High R&D expenses, including clinical trial costs, estimated at over $100 million for 2025

The core of Adagene's cost structure is its R&D expenditure, reflecting its focus on advancing its pipeline, particularly the lead candidate, Muzastotug (ADG126). For the six months ended June 30, 2025, the company reported R&D expenses of $12.0 million. This figure was actually an 18% decrease compared to the same period in 2024, a result of a strategic focus on prioritizing ADG126.

If this spending rate were to continue at a steady pace, the full-year 2025 R&D expense would be approximately $24.0 million. However, this projection is a defintely conservative one. The company is planning to begin enrollment for the Phase 2 trial of ADG126 in the second half of 2025, which will inherently drive costs up. The R&D budget covers all clinical trial costs, including contract research organization (CRO) fees, investigator fees, and patient-related expenses. The true, long-term cost of bringing a drug through Phase 2 and Phase 3 is what makes the industry so capital-intensive.

Personnel costs for highly specialized scientific and clinical staff

A substantial portion of both R&D and General and Administrative (G&A) expenses is dedicated to personnel, especially the highly specialized scientists, clinical development experts, and regulatory affairs staff. These are the people who run the trials and manage the intellectual property (IP). You can see the compensation element clearly in the non-cash expenses.

Here's the quick math on one key component: The difference between the GAAP Net Loss and the Non-GAAP Net Loss for H1 2025 was $2.1 million (GAAP Net Loss of $13.5 million minus Non-GAAP Net Loss of $11.4 million), which is primarily attributable to share-based compensation expenses. This non-cash expense is a critical part of compensating key talent in a pre-revenue biotech, essentially conserving cash while still offering competitive, equity-linked compensation.

Intellectual property maintenance and litigation fees

As a platform-driven company utilizing proprietary technologies like SAFEbody®, Adagene incurs significant, ongoing costs to secure and defend its intellectual property (IP). These costs are critical to protecting the long-term value proposition. While specific figures for IP maintenance and litigation are not broken out in the H1 2025 results, they are an expected and necessary overhead, typically falling under G&A.

The company's financial risk disclosures consistently highlight the need to 'obtain and maintain protection of intellectual property for its technology and drugs,' confirming this is a material, non-negotiable cost of doing business.

Manufacturing costs for clinical trial materials

Manufacturing costs for clinical trial materials are another major component embedded within the total R&D expense. For a clinical-stage company, this involves the costly production of the drug substance (ADG126, for instance) under Good Manufacturing Practice (GMP) standards for use in human trials. This is a variable cost tied directly to the scale and duration of the clinical studies.

The company's commitment to supply Muzastotug (ADG126) to Sanofi for their Phase 1b/2 combination trial is a clear indicator of this manufacturing cost burden, even if the trial itself is sponsored by the partner. Adagene must maintain a robust and compliant supply chain to keep its pipeline moving.

General and administrative (G&A) overhead

G&A costs are the fixed expenses of running the business outside of R&D. These include executive salaries, legal, accounting, investor relations, and office-related expenses. Adagene has shown a commitment to cost control here.

For the six months ended June 30, 2025, Administrative Expenses were $3.7 million, a slight increase from $3.6 million in the same period in 2024. Projecting this for the full year suggests a G&A overhead of approximately $7.4 million. This is a lean overhead, supported by prior year actions like a 'reduction in personnel and in office-related expenses as a result of cost-control measures.'

Here is a summary of the 2025 Cost Structure components based on H1 2025 actuals and projections:

Cost Component	H1 2025 Actual (US$ Million)	Full-Year 2025 Projection (US$ Million)	Key Drivers
Research & Development (R&D) Expenses	$12.0	~$24.0 (Extrapolated)	Clinical trial costs (ADG126 Phase 2 enrollment in 2H 2025), manufacturing of clinical materials, and scientific personnel salaries.
Administrative (G&A) Expenses	$3.7	~$7.4 (Extrapolated)	General overhead, executive salaries, legal, and accounting fees.
Share-Based Compensation (Non-Cash)	~$2.1 (Embedded in R&D/G&A)	~$4.2 (Extrapolated)	Compensation for specialized scientific and clinical staff to conserve cash.
Total Operating Expenses	$15.7 (Loss from Operations)	~$31.4 (Extrapolated)	The total cash burn before non-operating income/expense.

Adagene Inc. (ADAG) - Canvas Business Model: Revenue Streams

Adagene Inc.'s revenue model is that of a clinical-stage biotechnology company, meaning its current income is almost entirely derived from monetizing its proprietary technology platforms, primarily the SAFEbody precision masking technology, through strategic licensing and collaboration deals, not from product sales.

The company's revenue in the near-term is highly volatile and dependent on the timing of non-recurring payments. For instance, the Trailing Twelve Month (TTM) revenue as of June 30, 2025, was only $103K (or $0.1 Million USD), but a single, recent deal will dramatically increase the Q4 2025 figure.

Upfront payments and milestone payments from licensing agreements

The most immediate and significant revenue source comes from upfront payments and development milestones paid by large pharmaceutical partners to access Adagene's technology. This is the lifeblood of a platform-driven biotech before product commercialization. These payments are tied to signing the deal or achieving specific research and clinical development goals, like moving a candidate into a new trial phase.

A recent example is the November 2025 licensing agreement with Third Arc Bio, which immediately secured an upfront payment of $5 million. This single payment is over 48 times the TTM revenue reported just a few months prior. Beyond this initial cash, the deal structure includes potential development and commercial-based milestones of up to $840 million if all conditions are met.

Other major deals contribute to this revenue stream as well:

• Exelixis: Adagene has received over $18 million in total to date from Exelixis Inc., covering upfront and milestone payments under a technology license agreement for masked antibody-drug conjugate candidates.
• Sanofi: The 2022 partnership with Sanofi included an upfront payment of $17.5 million for the initial two programs and a total potential milestone value of up to $2.5 billion. In July 2025, Sanofi exercised an option for a third SAFEbody program, which triggered an undisclosed option exercise fee, further boosting Q3 revenue.

Potential future royalties on net sales of partnered products

While not a current revenue stream, the long-term financial upside is anchored in royalties. All major licensing deals include tiered royalties on end-user sales of the partnered products, which will materialize if and when the candidates receive regulatory approval and are commercialized by the partner.

The Third Arc Bio agreement, for example, explicitly includes royalties on end-user sales, in addition to the upfront and milestone payments. This model allows Adagene to benefit from the commercial success of a drug without incurring the massive costs of late-stage clinical trials, manufacturing, and commercial infrastructure outside of its retained rights.

Platform technology access fees from strategic collaborations

The entire licensing revenue is fundamentally an access fee for Adagene's proprietary platforms, which include SAFEbody, NEObody, and POWERbody technologies. These platforms, which combine computational biology and artificial intelligence (AI) to design novel antibodies, are the core value proposition. The fees are structured as follows:

Partner	Technology Access/Licensing Fee Structure	Potential Total Value
Third Arc Bio	$5 million upfront + Milestones	Up to $840 million (plus royalties)
Sanofi	$17.5 million upfront (initial deal) + Option Exercise Fees + Milestones	Up to $2.5 billion (plus royalties)
Exelixis	Upfront + Milestones	Over $18 million received to date (plus royalties)

The July 2025 partnership with ConjugateBio, where Adagene provides a proprietary antibody for use in bispecific ADC development programs, also falls under this platform access model. This approach transfers significant development risk to the partner while preserving substantial financial upside for Adagene.

Potential future direct product sales revenue (post-approval)

As a clinical-stage company, Adagene has no current direct product sales. This will change only upon regulatory approval of its wholly-owned pipeline candidates. The most advanced candidate is Muzastotug (ADG126), a masked anti-CTLA-4 SAFEbody, which is currently aligning with the FDA on Phase 2 and Phase 3 trial designs. Adagene retains worldwide commercial rights to Muzastotug. This is the long-term, multi-billion-dollar revenue opportunity, but it is still years away and carries significant clinical risk. Enrollment for the Phase 2 trial is expected to begin in the second half of 2025.

Government grants and tax incentives for R&D activities

While not strictly sales revenue, government support provides a critical non-dilutive financial benefit. Adagene's Chinese subsidiaries benefit from preferential tax treatments aimed at encouraging research and development (R&D) activities. Specifically, the company is eligible for a reduced Enterprise Income Tax rate of 15% as a 'technologically advanced service enterprise,' a significant reduction from the statutory rate of 25%. This effectively reduces the cost of R&D, extending the cash runway. The company also reports a small amount of Other income, net, which was $63,436 for the six months ended June 30, 2025, a category that often includes minor government grants or subsidies.