On August 30, 2022 Fosun International Limited, together with its subsidiaries ("Fosun" or the "Group"), reported its financial results for the six months ended 30 June 2022 (the "Reporting Period") (Press release, Fosun, AUG 30, 2022, View Source [SID1234619300]).

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In the first half of 2022, against the backdrop of the complex and volatile external environment, Fosun demonstrated the resilience of sustainable development, and the Group’s achieved steady revenue growth, with total revenue reaching RMB82.89 billion, representing an increase of 17.7% over the same period in 2021; net profit attributable to owners of the parent amounted to RMB2.70 billion; enterprise operation profit amounted to RMB2.33 billion, representing a year-on-year increase of 35.5%.

Meanwhile, the Group’s funds remained stable and its capital structure continued to be optimized, thereby laying a solid financial foundation for long-term and stable business development. During the Reporting Period, the Group financed RMB17.67 billion in the domestic and offshore public market (including syndicated loans); the Group’s overall average cost of interest-bearing liabilities was at a historically low level 4.5%. As at the end of the Reporting Period, cash, bank balances and term deposits were abundant, amounting to RMB117.65 billion; the adjusted NAV remained stable at HK$24.2 per share.

Guo Guangchang, Chairman of Fosun International, said, "In the face of the volatile epidemic situation and many external uncertainties in the first half of the year, Fosun maintained its strategic focus, insisted on doing the right things, the difficult things, and things that take time to develop, continue to develop in technology and innovation and globalization, demonstrated full resilience in its interim results, accumulating momentum for future development."

Continued to Strengthen the Four Segments and Revenue achieved Sustainable Growth

Facing the severe challenges brought about by the pandemic and global market fluctuations in the first half of 2022, Fosun leveraged on its advantages in diversification and globalization and adhered to the twin-driver strategy of "Profound Industry Operations + Industrial Investment" to effectively overcome risks and maintain the steady development of the four major business segments of Health, Happiness, Wealth, and Intelligent Manufacturing.

During the Reporting Period, the Group’s Health segment of pharmaceutical, devices and diagnosis, healthcare services and products developed synergistically and steadily, and reported a total revenue of RMB23.37 billion, representing a year-on-year increase of 21.2%. Among them, the revenue of Fosun Pharma in the first half of the year was RMB21.275 billion, representing a year-on-year increase of 26.05%, and the revenue of new products and sub-new products accounted for more than 25% of the revenue from the pharmaceutical manufacturing segment. The vaccination of the mRNA COVID-19 vaccine (COMIRNATY), jointly developed by Fosun Pharma and BioNTech, a German biotechnology company, has become available for children aged 5 to 11 in Macau SAR and the Taiwan region in April and May 2022 successively, and the vaccination of infant dosage for young children aged 6 months to 4 was approved in the Taiwan region in August 2022. As of the end of June 2022, a total of more than 30 million doses of COMIRNATY have been sold in Hong Kong SAR, Macau SAR and the Taiwan region. In July 2022, Fosun Pharmaceutical Industrial entered into an agreement with Genuine Biotech in relation to the strategic cooperation on, among other things, the joint development and Fosun Pharmaceutical Industrial’s exclusive commercialization of Azvudine, the first approved small molecular oral medication for COVID-19 independently developed by China, and entered into a strategic cooperation agreement with Sinopharm to accelerate the national channel network coverage. Fosun Kite’s CAR-T cell therapy, Yi Kai Da (Ejilunsai Injection), has been on the market for a year, as of the end of July 2022, Yi Kai Da has been included in the urban customized commercial health insurance of 44 provinces and municipalities and over 50 commercial insurances, while the number of treatment centers on file had reached nearly 100.

In the first half of the year, the Group’s Happiness segment achieved a total revenue of RMB32.07 billion, representing a year-on-year increase of 12.5%, mainly due to the robust revenue growth of Fosun Tourism Group. During the Reporting Period, Fosun Tourism Group’s revenue reached RMB6.42 billion, representing a year-on-year increase of more than 131%. In particular, the resort and hotel segment benefited from the strong growth of its business in Europe, Middle East and Africa (EMEA) and the Americas, with a year-on-year increase of 354%. Yuyuan’s jewelry and fashion segment grew against the trend, with a total revenue of RMB15.64 billion in the first half of the year. During the Reporting Period, Yuyuan Inc. opened 290 net stores, bringing the total number of stores to 4,271; regarding Laomiao, a jewelry brand under Yuyuan Inc., after the "Guyun Gold" series achieved record-breaking sales of RMB2.9 billion in the first half of the year, Laomiao launched the "Youque" series, a China-chic gold wedding jewelry line in July. In terms of the food and beverage segment, there are a total of 106 Songhelou noodle shops, and 71 shops have been signed but not opened or are in the process of signing the contract as of 20 August.

In the first half of the year, the Group’s Wealth segment recorded a total revenue of RMB22.97 billion, representing a year-on-year increase of 16.9%. Among which, the revenue from insurance segment amounted to RMB15.89 billion, representing a year-on-year increase of 2.7%; the revenue from asset management segment was RMB7.08 billion, representing a year-on-year increase of 69.7%. During the Reporting Period, Fosun Insurance Portugal achieved a total premium income of EUR2.63 billion, representing a year-on-year increase of 12.8%. The gross revenue of HAL, a German private bank was EUR192 million, representing a year-on-year increase of 41%.

The Group’s Intelligent Manufacturing segment continued to deepen industry operations and recorded a total revenue of RMB5.13 billion in the first half of the year, representing a year-on-year increase of 43.6%. Nanjing Iron & Steel promoted the optimization and upgrading of product structure, and the sales volume of advanced iron and steel materials grew 2.27%, accounting for 18.63% of the total sales volume. Meanwhile, many products such as low-temperature structural steel and crack arrest steel achieved breakthroughs. Among them, the 100 mm thick crack arrest steel for the application of the world’s massive 24000TEU container ships was certified by ship classification societies of seven countries. The pace of improvement of the industrial ecosystem is also accelerating, Nanjing Iron & Steel’s 2.6 million-ton coke project was successfully put into operation in PT. KinRui New Energy, Indonesia in May; the 20,000-ton battery-grade lithium hydroxide project invested by Hainan Mining was signed and settled in Yangpu Economic Development Zone, Danzhou, Hainan Province in July.

Guided by Globalization Strategy, Core Competencies Continued to Improve

In the first half of 2022, Fosun further consolidated its positioning as a global consumer group, and continued to polish and enhance the four core competencies of innovation-driven, globalization, FC2M ecosystem, and FES system, so as to ensure the sustainable development of the Group.

As a global innovation-driven consumer group, Fosun has established profound industrial presence in over 30 countries and regions. In the first half of the year, Fosun’s globalization and ecological synergy capabilities played an important role in driving the continuous growing momentum of overseas business. During the Reporting Period, the Group’s overseas revenue reached RMB38.76 billion, representing a year-on-year increase of 30.7% and accounting for 46.8% of the total revenue. Revenue of China-overseas Two-way empowerment[5] is RMB 6.5 billion, with 48 overseas brand enterprises and over 41,000 overseas employees. FTG’s overseas business saw a robust recovery, the business volume of Club Med in the first half of the year reached RMB5.74 billion, representing a year-on-year increase of 336%. The capacity of Club Med’s resorts in EMEA and the Americas increased by 411.4% and 90.6%, respectively, compared to the same period in 2021. Meanwhile, the Group’s global business has been continuously strengthened and extended to the high value-added industrial chain. Shanghai Henlius entered into a license agreement with Eurofarma and Organon respectively, for the commercialization of five independently developed Hang Li Kang (rituximab biosimilar) products in designated areas. Lanvin Group is proposed to be listed on the New York Stock Exchange through a business combination with Primavera Capital Acquisition Corporation to build a global luxury fashion group. Fusionride established European R&D centers in Germany and the United Kingdom respectively, achieving important milestones; Easun Technology established manufacturing and operation structure covering various regions including China, North America, Europe (Germany, Romania, Spain, Poland, etc.) to foster collaborative business development.

Innovation-driven is an important endogenous driving force supporting the steady development of Fosun. During the Reporting Period, the Group’s investment in technology and innovation increased to RMB4.6 billion, representing a year-on-year increase of 21%. The long-term accumulation of technological innovation capabilities has also continued to bear fruit. In March 2022, Shanghai Henlius’ self-developed PD-1 inhibitor, Han Si Zhuang (serplulimab injection), was conditionally approved by the National Medical Products Administration (NMPA) for the treatment of adult patients with advanced unresectable or metastatic MSI-H (Microsatellite Instability-High) solid tumors that have failed to respond to previous standard therapy, and has achieved revenue of approximately RMB76.9 million as of the end of June. In addition to the Health segment, innovative gene has also continued to penetrate into other segments of the Group. In 2020, Yuyuan proposed to build five technological innovation centers in five consumer fields: jewelry, cosmetics, food and beverage, tea, and liquor. At present, the Fosun Cosmetics Innovation Center and the Yuyuan Jewelry Creative House designer platform have been put into operation and reaped results, including the launch of the first fully independently developed and incubated functional skin care brand, YOGAN. In August 2022, the construction of Intuitive Fosun’s headquarters and industrialization base project, Intuitive Fosun Medical Robotics Manufacturing and R&D Center, officially started, which will be used to promote the R&D and application of da Vinci and other series of medical robots, and promote the development of world-leading medical technologies and products in China.

In the first half of 2022, the development of Fosun’s FC2M ecosystem further accelerated and continued to realize the multiplier effect. During the Reporting Period, the Group’s ecosystem has created a total value of approximately RMB3.8 billion and acquired 18 million newly registered members, bringing the total number of operational members to 414 million. The two C-end platforms continued to be upgraded. Among them, the Fosun Alliance internet platform has facilitated cross-sector consumption from 40% of its active members, and Fosun Health has accumulated 18.14 million registered users, and carried out innovative ecological cooperation with nearly 50 internal and external enterprises to create high-quality products and services. Su Ke Xin, Han Li Kang, and Akynzeo have established in-depth synergies with the Fosun Health ecosystem, and achieved cross-sector sales of RMB1.28 billion.

The FES (Fosun Entrepreneurship / Ecosystem System) system built by Fosun has continued to evolve and achieved remarkable results. In the first half of the year, the Group completed the refinement and certification of 20 FES tools, more than 200 senior, junior and other levels of FES experts have certified the FES tools, more than 1,200 improvement projects are in progress this year, the value of cost reduction and efficiency enhancement of completed projects has exceeded RMB1.0 billion. The FES management system has been promoted and deeply applied in various industries of the Group. For example, Club Med Joyview uses VSM[6] tool to optimize the opening process, shortening the opening process from nine months to six months, and managing multiple openings at the same time.

Delivered Outstanding ESG Performance with a Clear Objective and Mission to Make "Contribution to Society"

While developing its businesses, Fosun emphasizes the use of ESG (environmental, social and governance) criteria to assess its own sustainable development capability and level.

As a participant of the United Nations Global Compact (UNGC), Fosun actively engaging its member companies in the implementation of ESG strategies. On the environmental front, Fosun has made a commitment to the society to achieve carbon emission peak by 2028 and carbon neutrality by 2050", and is making steady progress towards these targets.

Moreover, Fosun continued to make unremitting efforts for social welfare. The Group and its member companies carried out public welfare projects such as supporting the combat against the pandemic, assisting in the fight against malaria in Africa, disaster relief, Rural Doctors program, fostering education, culture promotion, and entrepreneurial support to actively promote community development and help people’s livelihood and improve social well-being.

Since the beginning of this year, the domestic epidemic situation has shown an overall sporadic outbreaks and cluster infections in some regions. Fosun’s "epidemic wartime mechanism" has maintained efficient operation, continued to respond to the needs of all parties for assistance, and successively supported the anti-epidemic work in Hong Kong SAR, Xi’an, Shanghai, Sanya and other places. When Shanghai was faced with the severe challenge of the epidemic in the first half of the year, Fosun immediately supported the city in the battle against the epidemic and mobilized a large quantity of materials to help the frontline fight against the epidemic. In addition, employees of the Fosun family participated in volunteer work. From the outbreak of the current wave of the epidemic in early March to 13 July, Fosun has donated more than 6.40 million pieces of anti-epidemic materials and daily necessities to 952 communities (including 279 nursing homes) and more than 200 schools, hospitals and other institutions in 16 districts in Shanghai.

Fosun’s outstanding performance in ESG has been recognized by global professional institutions. As at the end of the Reporting Period, Fosun International’s MSCI ESG rating was AA, making it the only conglomerate in Greater China with a MSCI ESG rating of AA. Fosun International was selected as a constituent of the MSCI CHINA ESG LEADERS 10-40 Index; its Hang Seng Sustainability Rating was A, and it was selected as a constituent of the Hang Seng Corporate Sustainability Benchmark Index (HSSUSB) and Hang Seng ESG 50 Index. Fosun International’s FTSE Russell ESG rating has improved for two consecutive years, and it became a constituent of the FTSE4Good Index Series for the first time.

Guo Guangchang said, "This year, Fosun enters into the 30 years of establishment. Thirty years ago, at the beginning of its establishment, we put forward the core value of ‘Self-improvement, Teamwork, Performance, and Contribution to Society’ to help Fosuners stay motivated. Fosun, which has been strengthening its presence in the four major business segments of Health, Happiness, Wealth, and Intelligent Manufacturing in recent years, has developed into a global innovation-driven consumer group, and strive to create happier lives for families worldwide. Standing at the new starting point of 30 years of development, Fosun proposes to ‘Sharing Happiness’, hoping to join hands with customers, partners, investors and all parties in the society to create a happy ecosystem and share the value of Fosun."

[1] Enterprise operation profit: It includes the profit contribution of the major members of the Group, of which the profit of A-share listed members is adjusted to exclude the gain/loss of the non-recurring items.

[2] Investment in technology and innovation includes scientific research investment (expensed and capitalized), but does not include digital investment.

[3] An operational member is defined as a consumer who has agreed to the brand’s official membership terms and conditions and granted privacy in any channel, has actively retained personal information including phone number, and is identifiable, reachable and traceable. From 2021 onwards, this statistic includes consumers within the Fosun Health ecosystem.

[4] Ecological value creation refers to the revenue contribution (before intercompany eliminations) directly or indirectly created by companies within the Fosun ecosystem for other companies within the ecosystem, including but not limited to ecological cross-selling, ecological product co-creation, ecological membership contribution, membership sales transformation, and ecological sales collaboration, joint industrial investment, financing cooperation empowerment, industrial resource coordination, etc.

[5]Two-way empowerment revenue includes: the introduction of overseas technologies, products and services into the Chinese market, and the income generated by exporting Chinese excellent technologies and products to overseas markets.

[6]VSM: Value Stream Mapping.

2022 Interim Results Announcement

Full details of the interim results announcement of Fosun International can be found on the Company’s website (www.fosun.com) and on the website of the Hong Kong Stock Exchange.

Fosun International 2022 interim results presentation will be held online on 31 August 2022, from 16:00 to 17:30. The management will introduce the key financial performance and strategic outlook of the Group. The live webcast is available in the links below. The latest PPT presentation of the Company is also available for download on Fosun’s website.

Chinese live webcast: View Source

English live webcast: View Source

About Fosun

Founded in 1992, Fosun is a global innovation-driven consumer group dedicated to providing high-quality products and services for families around the world in Health, Happiness, Wealth, and Intelligent Manufacturing segments. In 2007, Fosun International Limited was listed on the main board of the Hong Kong Stock Exchange (stock code: 00656.HK). As of 30 June 2022, Fosun International’s total assets amounted to RMB849.7 billion. Fosun International ranks No.589 on the 2022 Forbes Global 2000 List, with a MSCI ESG rating of AA.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes forward-looking statements. All statements, other than statements of historical facts, that address activities, events or developments that Fosun International Limited (the "Company") expects or anticipates will or may occur in the future (including but not limited to projections, targets, estimates and business plans) are forward-looking statements. The Company’s actual results or developments may differ materially from those indicated by these forward-looking statements as a result of various factors and uncertainties, and other risks and factors beyond our control. In addition, the Company makes the forward-looking statements referred to herein as of today and undertakes no obligation to update these statements. The 2022 interim financial figures in this press release are calculated using the average exchange rate for the Reporting Period from January to June 2022 (USD/CNY= 6.48139, HKD/CNY= 0.82821, EUR/CNY=7.08089), and period-end exchange rate as of 30 June 2022 (USD/CNY=6.71140, HKD/CNY=0.85520, EUR/CNY=7.00840), unless otherwise stated.

On August 30, 2022 Sihuan Pharmaceutical reported its interim results for the six months ended 30 June 2022 (Press release, Sihuan Pharmaceutical, AUG 30, 2022, View Source [SID1234618979]).

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On August 30, 2022, Nascent Biotech Inc. (the "Company") reported that entered into an agreement with YA II PN, Ltd. ("YA II"), an unrelated third party. YA II is loaning the Company $1,500,000.00 (Filing, 8-K, Nascent Biotech, AUG 30, 2022, View Source [SID1234618967]). The first tranche of $500,000.00 will be paid at Closing. In connection with the loan, the Company is issuing YA II its Convertible Debentures (the "Debentures"). The first Debenture is for $500,000.00, has a maturity date of one year and is due on August 30, 2023. The interest rate is six percent (6%) per annum. The Debenture may be converted at the lesser of $0.30 per share or eighty percent (80%) of the lowest traded VWAP price of the Company’s common stock for ten consecutive trading days immediately prior to the conversion date. The Debenture may be prepaid in accordance with the terms set forth in the Debenture. The Debenture also contains certain representations, warranties, covenants, and events of default including, among other things, if the Company becomes delinquent in its periodic report filings with the Securities and Exchange Commission (the "SEC"). If an event of default occurs, the amount of the principal and interest rate due under the Debentures increases.

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YA II will not affect any conversion which will result in its holding more than 4.99% of our common stock. The Debenture provides for certain penalties for failure to timely deliver stock and contains other protective provisions for YA II. $500,000 principal amount of the Debenture has been funded, the next tranche of $500,000 will be due when the Company files a registration statement covering the shares of our common stock issuable upon conversion of the Debenture and upon exercise of a warrant that the Company has issued as part of the transaction. The final tranche of $500,000 will be funded upon the effectiveness of the registration statement.

As part of this transaction, the Company and YA II entered into to a Securities Purchase Agreement dated August 30, 2022 (the "SPA"). The Company also issued a warrant to YA II to purchase 750,000 shares of the Company’s common stock for a period of two years, expiring on August 30, 2024, at an exercise price of $0.60 per share.

In connection with the Debenture and SPA, the Company also entered into a Registration Rights Agreement obligating the Company to register with the SEC the shares issuable upon conversion of the Debentures and issuable upon exercise of the Warrant.

The foregoing descriptions of the terms of the Debenture, the Warrant, the SPA, and the Registration Rights Agreement do not purport to be complete and are qualified in their entirety by the complete text of the documents attached as Exhibits 4.1 through 4.2 and Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K.

On August 30, 2022 I-Mab reported that it would concentrate its drug development efforts on five key candidates, for which it will seek international partners once the candidates show Phase I or II proof of concept (Press release, I-Mab Biopharma, AUG 30, 2022, View Source [SID1234618928]). It plans to out-license ex-China rights, while retaining China rights, though it will also partner commercialization in China to avoid the cost of building a sales force. The detailed presentation of the company’s assets seems an oblique denial that I-Mab is seeking to sell the entire company, a possibility raised in recent press reports. I-Mab pointed out that it has almost $600 million in cash, enough to support three years of operations.

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On August 30, 2022 Adagene Inc. ("Adagene") (Nasdaq: ADAG), a platform-driven, clinical-stage biotechnology company transforming the discovery and development of novel antibody-based therapies, reported financial results for the six months ended June 30, 2022 and provided corporate updates (Press release, Adagene, AUG 30, 2022, View Source [SID1234618819]).

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"We are prioritizing development of two anti-CTLA-4 antibodies, which have best-in-class profiles and are on track to deliver proof-of-concept clinical results in combination therapy in 2023. Anti-CTLA-4 therapy is known for dose dependent toxicity, making it extremely difficult to optimize dosing levels, dosing frequency and dosing intervals for prevailing anti-CTLA-4 therapy, especially in combination therapy with anti-PD-1. We have solved this problem with differentiated candidates suitable for the massive market opportunity for next generation anti-CTLA-4 therapies, increasing market penetration into known and new indications with enhanced safety and efficacy, especially for tumor types not addressed with the currently available therapy, and rapid entry into new markets such as China with few approved indications for anti-CTLA-4 in combination with widely accessible anti-PD-1 therapy," said Peter Luo, Ph.D., Co-founder, Chief Executive Officer and Chairman of Adagene. "We are also excited to advance our next generation anti-CD137 agonistic antibody, ADG206, into clinic given its first- and best-in-class potential in both monotherapy and in combination with multiple agents."

Dr. Luo continued: "On the longer-term horizon, we have developed a portfolio of masked, bispecific T cell engagers (TCEs) for tumor directed T cell therapies, armed with proprietary, tailor-made anti-CD3 and CD28 by leveraging our NEObody and SAFEbody technologies, that aim to push the boundaries of what is possible with TCEs – to achieve safe, potent and durable responses for patients by combining our novel modalities with the fundamental pathways across the cancer immunity cycle."

He concluded: "Building on success of existing technology licensing deals, we are also pursuing additional collaboration agreements that leverage our pipeline, our integrated AI-powered antibody discovery platform, and our SAFEbody precision masking technology, to bring potential non-dilutive funding to Adagene. We believe that the combination of our proprietary technology platforms and our highly differentiated clinical and preclinical pipelines presents us with many value-creating levers to navigate today’s turbulent financial markets."

PIPELINE & BUSINESS HIGHLIGHTS

ADG116 (anti-CTLA-4 NEObody targeting a unique epitope)

Encouraging efficacy demonstrated as a single agent and in combination with anti-PD-1:
Observed one partial response with ADG116 monotherapy in a tumor type where no anti-CTLA-4 therapy is currently approved.
Observed one confirmed rapid complete response with repeat dosing for ADG116 in combination with toripalimab in a tumor type where no anti-CTLA-4 therapy is currently approved.
Presentation of data from this phase 1b/2 trial will take place at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper)’s 37th Annual Meeting (SITC 2022) in Boston, November 8-12, 2022.
For competitive reasons, Adagene is currently not disclosing the dose or tumor types of these objective responses.
Compelling safety demonstrated as a single agent and in combination with anti-PD-1:
Completed monotherapy dose escalation of ADG116 in 30 patients up to 15 mg/kg administered every three weeks with repeat dosing, and continued to enroll patients in dose expansion at 10 mg/kg.
Only one dose-limiting toxicity event reported at ESMO (Free ESMO Whitepaper)-IO 2021 for the 10 mg/kg dose. As of this release, no additional or late-onset dose-limiting toxicities reported with ADG116 monotherapy, including in patients who received more than four cycles.
A safety review committee cleared advancement to dose expansion with 3 mg/kg of ADG116 for combination cohorts with toripalimab.
Continued advancement of combinations with anti-PD-1 or anti-CD137:
Completing dose escalation of ADG116 in combination with the anti-PD-1 antibody, pembrolizumab (ADG116-P001 / KEYNOTE-C97). Presentation of data from this phase 1b/2 trial will take place at SITC (Free SITC Whitepaper) 2022.
Evaluation ongoing of ADG116 in combination with the anti-CD137 therapy, ADG106, to optimize the dose and schedule for this novel, proprietary combination. Adagene is a global leader in exploring the synergistic clinical effects for the dual pathway targeting CTLA-4 and CD137 given the compelling preclinical rationale for this powerful combination.
Paving the way for combination trials in China, advanced dose escalation to 10 mg/kg in phase 1 monotherapy trial (ADG116-1002). A significant untapped clinical and market opportunity exists for the proven combination of anti-CTLA-4 and anti-PD-1 therapies as the combination is only approved in one tumor type in China.
ADG126 (anti-CTLA-4 SAFEbody targeting a unique epitope with precision masking)

Compelling clinical safety demonstrated at unprecedented dosing levels with repeat dosing:
Completed monotherapy dose escalation of ADG126 in 19 patients up to 20 mg/kg administered every three weeks with repeat dosing, and continued to enroll patients in dose expansion at 10 mg/kg.
ADG126 monotherapy was well tolerated with no dose-limiting toxicities or treatment-related serious adverse events observed following repeat dosing across all dose levels, as reported in an abstract at the 2022 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) annual meeting.
Clinical evaluation with anti-PD-1 therapies is ongoing to establish the dose and schedule for phase 2 combination cohorts. In combination cohorts with toripalimab, the safety review committee has cleared the 6 mg/kg dose administered every three weeks, approved dose expansion at 6 mg/kg, and recommended further dose escalation to 10 mg/kg, the highest dose level ever reported for the combination of anti-CTLA-4 and anti-PD-1 therapies.
Encouraging antitumor activity observed as monotherapy in cold tumors:
In a cohort of heavily pre-treated patients, ADG126 monotherapy resulted in durable reductions in target lesions over 20% in two patients with cold tumors:
One ovarian cancer patient who experienced significant, continued reduction of an established ovarian cancer biomarker, CA125, dropping 90% to within the normal range for full clinical benefit after receiving up to 18 cycles of treatment at 1 mg/kg, as of this release.
One uveal melanoma patient who received prior immuno-oncology treatment, having progressed after the combination of nivolumab and ipilimumab.
Updated interim results will be presented in a poster on September 12 at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress 2022 in Paris, September 9 – 13, 2022
Both monotherapy and combination trials continue to enroll patients with advanced, metastatic tumors in the US, China and APAC, evaluating optimized doses of ADG126 in targeted tumors.
Pharmacokinetics show effectiveness of precision masking technology:
In monotherapy evaluation, ADG126 plasma pharmacokinetics (PK) were approximately linear and activated ADG126 accumulated steadily during repeat dosing across different dose levels.
This reflects prolonged exposures of activated ADG126 in the tumor microenvironment (TME), with cleaved ADG126 in plasma on average accumulating >2-fold during repeat dosing.
ADG106 (agonistic anti-CD137 NEObody)

Given prioritization of anti-CTLA-4 programs, combination trial with toripalimab in China is winding down:
Results from the phase 1b/2 trial (ADG106-1008) in China evaluating ADG106 in combination with toripalimab, showed one observed partial response in a nasopharyngeal carcinoma (NPC) patient out of 20 patients enrolled. Currently, four patients remain on therapy.
Given prioritization of its two anti-CTLA-4 clinical programs and potential of its next generation anti-CD137 therapy, ADG206, Adagene is winding down the ADG106-1008 trial and does not intend to proceed with the previously planned trial of ADG106 and pembrolizumab.
Focusing clinical development on investigator-initiated trials (IITs) in selected indications:
Reflecting its strategic presence and collaborations in Singapore, Adagene continues to support the ongoing IITs in Singapore and explore the anti-CD137 opportunity with ADG106 in selected indications in a combination setting, including:
An ongoing phase 1b/2 clinical trial (ADG106-T6001) evaluating ADG106 in combination with the anti-PD-1 antibody, nivolumab, for patients with advanced non-small cell lung cancer (NSCLC) who have progressed after prior treatment. Dose escalation is complete and dose expansion is ongoing.
An ongoing Phase 1b/2 clinical trial (ADG106-T6002) evaluating ADG106 in combination with neoadjuvant chemotherapy (doxorubicin and cyclophosphamide followed by paclitaxel) in patients with early-stage, HER2 negative breast cancer.
ADG206 (masked, IgG1 FC engineered anti-CD137 POWERbody)

On track for clinical development as a next generation anti-CD137 candidate that combines masking, Fc-engineering and novel epitope to deliver balance between safety and efficacy:
Adagene submitted a Human Research Ethics Committee (HREC) regulatory filing in Australia to advance this anti-CD137 POWERbody, ADG206, into a phase 1 clinical trial in patients with advanced metastatic solid tumors.
Patient dosing is planned in early 2023.
ADG206 is designed to solve the safety and efficacy challenges of anti-CD137 therapy, leveraging the same novel epitope as ADG106 and 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.
Preclinical data demonstrated that ADG206 was well tolerated and had robust anti-tumor activity as a single agent in multiple tumor models, with approximately 4-fold stronger anti-CD137 agonistic activity of its activated form than a urelumab analog; ADG206 also demonstrated enhanced anti-tumor activity in combination with other agents, including checkpoint inhibitors and anti-CTLA-4 therapy.
Preclinical Discovery Programs

ADG153: Given updated program timelines and ongoing business development activities, Adagene now plans the regulatory submission for its masked, IgG1 anti-CD47 SAFEbody, ADG153, in the first half of 2023. This candidate is differentiated by its strong antibody-dependent cellular cytotoxicity (ADCC) and antibody-dependent cellular phagocytosis (ADCP) activity designed to realize the full potential of anti-CD47 therapy for both hematologic and solid tumor indications. Preclinical data demonstrated that ADG153 IgG1 was well tolerated, did not induce human hemagglutination and significantly reduced anemia-related and antigen sink liabilities; ADG153 IgG1 also demonstrated greater anti-tumor activity than the benchmark (magrolimab analog).
American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2022: Data demonstrated the potential best-in-class profiles for three differentiated preclinical product candidates in IND-enabling studies (ADG206, ADG153, ADG138), which all apply SAFEbody precision masking technology. The robust preclinical poster presentations for these and other product candidates are available on the Publications page of the company’s website.
CD28 T-cell engagers (TCEs): Data at AACR (Free AACR Whitepaper) introduced a new capability for Adagene’s proprietary bispecific TCEs with CD28. CD28 bispecific POWERbody TCEs exhibit enormous potential to fulfill the promises of safe and durable T cell-mediated synergistic immunotherapies when combined with CD3 bispecific TCEs and/or checkpoint inhibitors. Preclinical data demonstrated the potential to mitigate the serious safety concerns of CD28 activation and make custom designed antibodies targeting a highly conserved epitope with broad species reactivity. Multiple tumor associated antigen (TAA) x CD28 POWERbodies are in progress, such as B7-H3xCD28 and TROP2xCD28, which can also be combined with the company’s CD3 TCEs and/or checkpoint inhibitors to achieve safe, powerful and durable immunotherapy for solid tumors. The full poster presentation may be viewed here.
Collaborations

Sanofi: Established a technology licensing agreement with Sanofi in March 2022 to generate masked versions of antibodies provided by Sanofi, including monoclonal and bispecific candidate antibodies, with a potential transaction value of US$2.5 billion. The collaboration includes an upfront payment of US$17.5 million received in April 2022 for the initial two programs (US$8.75 million per program), an option fee for two additional programs, potential milestone payments of up to US$2.5 billion (US$625 million per program), and tiered royalties.
Exelixis: Received a US$3.0 million milestone payment from Exelixis in January 2022 for the successful nomination of lead SAFEbody candidates for one of the collaboration programs and an additional $1.1 million upfront payment in June 2022, based on a technology licensing agreement to develop novel masked antibody-drug conjugate candidates. Terms of the agreement, which was executed in February 2021, include an upfront payment of US$11 million for two programs, potential milestones and tiered royalties.
China: Advanced global partnerships and collaboration with Sanjin and Dragon Boat Biopharmaceutical for two antibodies out-licensed in Greater China, including an anti-PD-L1 (ADG104) in phase 2 development, and a novel anti-CSF-1R (ADG125/BC006) in phase 1.
Corporate

Adagene is making progress to evaluate business processes that meet the requirements of the Holding Foreign Companies Accountable Act (HFCAA) and the Accelerating Holding Foreign Companies Accountable Act (AHFCAA) in the event that AHFCAA becomes enacted prior to the filing of annual report for the year of 2023 on Form 20-F. The company is closely monitoring the status and implications of HFCAA and AHFCAA in order to take decisive action to minimize its impact on the company.
Adagene continues to streamline its operations while focusing on its most advanced and promising clinical and preclinical programs to reduce its cash burn.
UPDATED MILESTONES & OUTLOOK

Adagene is updating its business outlook to reflect prioritization of its anti-CTLA-4 clinical development programs and achievement of meaningful milestones with its current cash resources. Based on current plans, Adagene expects its cash balance to sufficiently fund operations into late 2024, with the following upcoming milestones:

2022

Present ADG126 monotherapy dose escalation data at ESMO (Free ESMO Whitepaper) 2022
Present additional ADG116 data at SITC (Free SITC Whitepaper) 2022
ADG116 results of dose escalation in combination with anti-PD-1 therapy to establish the dose(s) and schedule(s) for dose expansion; advance phase 2a dose expansion cohorts in targeted tumors
ADG126 results of dose escalation in combination with anti-PD-1 therapy to establish the dose(s) and schedule(s) for dose expansion; advance phase 2a dose expansion cohorts in targeted tumors
2023

ADG116 phase 2a proof-of-concept data from combination dose expansion cohorts
ADG126 phase 2a proof-of-concept data from combination dose expansion cohorts
Establish registration path and strategy (e.g., recommended phase 2 dose, indication and design) for phase 2/3 pivotal trial of anti-CTLA-4 in combination with anti-PD-1 therapy in targeted tumors
Initiate patient dosing in ADG206 phase 1 trial
Submit IND or equivalent for ADG153, and initiate phase 1 trial
Results from IIT combination studies of ADG106
Additional collaborations and/or technology licensing agreements
FINANCIAL HIGHLIGHTS

Cash and Cash Equivalents:
Cash and cash equivalents were US$168.0 million as of June 30, 2022, compared to US$174.4 million as of December 31, 2021. The 2022 cash balance includes an upfront payment of US$17.5 million from Sanofi, and a milestone payment of US$3.0 million and upfront payment of US$1.1 million from Exelixis, related to Adagene’s respective collaboration and technology licensing agreements with those companies.

Net Revenue:
Net revenue was US$3.9 million for the six months ended June 30, 2022, compared to US$1.4 million for the same period in 2021. The increase was related to revenue recognized due to fulfillment of performance obligations over time associated with the collaboration and technology licensing agreement with Sanofi to develop antibody-based therapies. Due to the Sanofi and Exelixis collaborations, contract liabilities also increased to US$20.2 million as of June 30, 2022, compared to US$5.5 million as of December 31, 2021.

Research and Development (R&D) Expenses:
R&D expenses were US$45.1 million for the six months ended June 30, 2022, compared to US$31.5 million for the same period in 2021. The rise in R&D expenses was primarily due to increased R&D activities for the company’s clinical programs, as well as preclinical testing for candidates in the IND-enabling phase.

Administrative Expenses:
Administrative expenses were US$6.8 million for the six months ended June 30, 2022, compared to US$7.4 million for the same period in 2021. The decrease was primarily due to reduction in share-based compensation expenses.

Net Loss:
The net loss attributable to Adagene Inc.’s shareholders was US$47.6 million for the six months ended June 30, 2022, compared to US$37.2 million for the six months ended June 30, 2021.

Ordinary Shares Outstanding:
As of June 30, 2022, there were 54,278,981 ordinary shares issued and outstanding. Please note that each American depository share, or ADS, represents one and one quarter (1.25) ordinary shares of the company.

Non-GAAP Net Loss:
Non-GAAP net loss, which is defined as net loss attributable to ordinary shareholders for the period after excluding (i) share-based compensation expenses and (ii) accretion of convertible redeemable preferred shares to redemption value, as appliable, was US$41.9 million for the six months ended June 30, 2022, compared to US$27.0 million for the six months ended June 30, 2021. Please refer to the section in this press release titled "Reconciliation of GAAP and Non-GAAP Results" for details.

Non-GAAP Financial Measures

The Company uses non-GAAP net loss and non-GAAP net loss per ordinary shares for the year, which are non-GAAP financial measures, in evaluating its operating results and for financial and operational decision-making purposes. The Company believes that non-GAAP net loss and non-GAAP net loss per ordinary shares for the year help identify underlying trends in the Company’s business that could otherwise be distorted by the effect of certain expenses that the Company includes in its loss for the year. The Company believes that non-GAAP net loss and non-GAAP net loss per ordinary shares for the year provide useful information about its results of operations, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.

Non-GAAP net loss and non-GAAP net loss per ordinary shares for the year should not be considered in isolation or construed as an alternative to operating profit, loss for the year or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review non-GAAP net loss and non-GAAP net loss per ordinary shares for the year and the reconciliation to their most directly comparable GAAP measures. Non-GAAP net loss and non-GAAP net loss per ordinary shares for the year here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

Non-GAAP net loss and non-GAAP net loss per ordinary shares for the year represent net loss attributable to ordinary shareholders for the year excluding (i) share-based compensation expenses, and (ii) accretion of convertible redeemable preferred shares to redemption value. Share-based compensation expense is a non-cash expense arising from the grant of stock-based awards to employees. The Company believes that the exclusion of share-based compensation expenses from the net loss in the Reconciliation of GAAP and Non-GAAP Results assists management and investors in making meaningful period-to-period comparisons in the Company’s operating performance or peer group comparisons because (i) the amount of share-based compensation expenses in any specific period may not directly correlate to the Company’s underlying performance, (ii) such expenses can vary significantly between periods as a result of the timing of grants of new stock-based awards, and (iii) other companies may use different forms of employee compensation or different valuation methodologies for their share-based compensation.

Please see the "Reconciliation of GAAP and Non-GAAP Results" included in this press release for a full reconciliation of non-GAAP net loss and non-GAAP net loss per ordinary shares for the year to net loss attributable to ordinary shareholders for the year/period.