Adagene (ADAG) 20-F 28 Apr 21 2020 FY Annual report (foreign) Financial data

Document and Entity Information

Document and Entity Information	12 Months Ended
	Dec. 31, 2020shares
Document and Entity Information [Abstract]
Document Type	20-F
Document Registration Statement	false
Document Annual Report	true
Document Transition Report	false
Document Shell Company Report	false
Document Period End Date	Dec. 31, 2020
Entity Registrant Name	Adagene Inc.
Entity Common Stock, Shares Outstanding	43,852,894
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Central Index Key	0001818838
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 75,150,998	$ 92,532,788
Shortterm investments		8,000,000
Accounts receivable, net		480,000
Amounts due from related parties	132,396	1,433,186
Prepayments and other current assets	3,813,984	1,476,973
Total current assets	79,097,378	103,922,947
Property, equipment and software, net	2,067,125	1,879,325
Other noncurrent assets	3,098,234	87,227
TOTAL ASSETS	84,262,737	105,889,499
Current liabilities:
Accounts payable	1,809,975	712,714
Contract liabilities	725,536	993,378
Amounts due to related parties	2,535,358	1,895,779
Accruals and other current liabilities	6,059,497	2,540,164
Shortterm borrowings	3,831,476	716,723
Current portion of longterm borrowings	1,183,926	322,525
Total current liabilities	16,145,768	7,181,283
Longterm borrowings	2,965,563	1,515,868
Other noncurrent liabilities	91,955
TOTAL LIABILITIES	19,203,286	8,697,151
Commitments and contingencies
Mezzanine equity:
Total mezzanine equity	154,449,407	154,201,294
Shareholders' deficit:
Ordinary shares (par value of US$0.0001 per share; 500,000,000 and 500,000,000 shares authorized; 15,193,136 shares issued and outstanding as of December 31, 2019; 18,888,070 shares issued and 16,603,070 shares outstanding as of December 31, 2020)	1,889	1,519
Subscriptions receivable from shareholders	(7,172,192)	(197,068)
Additional paidin capital	23,786,652	6,789,542
Accumulated other comprehensive loss	(350,981)	(344,894)
Accumulated deficit	(105,655,324)	(63,258,045)
Total shareholders' deficit	(89,389,956)	(57,008,946)
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT	84,262,737	105,889,499
Series A-1 convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	5,473,957	5,473,957
Series A-2 convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	3,000,000	3,000,000
Series B convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	27,999,995	27,999,995
Series C-1 convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	48,975,456	48,727,343
Series C-2 convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	18,999,999	18,999,999
Series C-3 convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	$ 50,000,000	$ 50,000,000

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Ordinary shares, par value	$ 0.0001	$ 0.0001
Ordinary shares, shares authorized	500,000,000	500,000,000
Ordinary shares, shares issued	18,888,070	15,193,136
Ordinary shares, shares outstanding	16,603,070	15,193,136
Series A-1 convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	5,473,957	5,473,957
Convertible redeemable preferred shares, shares issued	5,473,957	5,473,957
Convertible redeemable preferred shares, shares outstanding	5,473,957	5,473,957
Series A-2 convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	2,370,414	2,370,414
Convertible redeemable preferred shares, shares issued	2,370,414	2,370,414
Convertible redeemable preferred shares, shares outstanding	2,370,414	2,370,414
Series B convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	7,494,537	7,494,537
Convertible redeemable preferred shares, shares issued	7,494,537	7,494,537
Convertible redeemable preferred shares, shares outstanding	7,494,537	7,494,537
Series C-1 convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	5,597,354	5,597,354
Convertible redeemable preferred shares, shares issued	5,597,354	5,597,354
Convertible redeemable preferred shares, shares outstanding	5,597,354	5,597,354
Series C-2 convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	1,861,121	1,861,121
Convertible redeemable preferred shares, shares issued	1,861,121	1,861,121
Convertible redeemable preferred shares, shares outstanding	1,861,121	1,861,121
Series C-3 convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	4,452,441	4,452,441
Convertible redeemable preferred shares, shares issued	4,452,441	4,452,441
Convertible redeemable preferred shares, shares outstanding	4,452,441	4,452,441

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Licensing revenue	$ 700,913	$ 480,000	$ 1,511,168
Expenses
Research and development expenses	(33,538,035)	(16,211,750)	(16,080,560)
Third parties	(23,645,740)	(10,507,444)	(8,575,969)
Related parties	(9,892,295)	(5,704,306)	(7,504,591)
Administrative expenses	(10,314,536)	(3,437,900)	(2,765,134)
Loss from operations	(43,151,658)	(19,169,650)	(17,334,526)
Interest income	629,288	922,680	710,711
Interest expense	(202,165)	(138,096)	(91,085)
Other income	971,949	723,476	901,713
Foreign exchange gain, net	(644,693)	21,867	12,698
Change in fair value of warrant liabilities	0	1,207,415	534,305
Loss before income tax	(42,397,279)	(16,432,308)	(15,266,184)
Net loss attributable to Adagene Inc.'s shareholders	(42,397,279)	(16,432,308)	(15,266,184)
Other comprehensive income (loss)
Foreign currency translation adjustments, net of nil tax	(6,087)	65,799	(11,288)
Total comprehensive loss attributable to Adagene Inc.'s shareholders	(42,403,366)	(16,366,509)	(15,277,472)
Net loss attributable to Adagene Inc.'s shareholders	(42,397,279)	(16,432,308)	(15,266,184)
Deemed contribution from convertible redeemable preferred shareholders			1,186,187
Accretion of convertible redeemable preferred shares to redemption value	(248,113)	(246,184)	(222,846)
Net loss attributable to ordinary shareholders	$ (42,645,392)	$ (16,678,492)	$ (14,302,843)
Weighted average number of ordinary shares used in per share calculation:
-Basic	15,950,698	15,178,232	15,159,136
-Diluted	15,950,698	15,178,232	15,159,136
Net loss per ordinary share
-Basic	$ (2.67)	$ (1.10)	$ (0.94)
-Diluted	$ (2.67)	$ (1.10)	$ (0.94)

CONSOLIDATED STATEMENTS OF CO_2

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Foreign currency translation adjustments, tax	$ 0	$ 0	$ 0

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT - USD ($)	Ordinary shares	Subscriptions receivable from shareholders	Additional paid in capital	Accumulated other comprehensive loss	Accumulated deficit	Total
Balance at the beginning at Dec. 31, 2017	$ 1,516	$ (197,068)	$ 7,687,811	$ (399,405)	$ (32,745,740)	$ (25,652,886)
Balance at the beginning (in shares) at Dec. 31, 2017	15,159,136
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Loss					(15,266,184)	(15,266,184)
Other comprehensive income (loss)				(11,288)		(11,288)
Sharebased compensation			126,540			126,540
Modification of convertible redeemable preferred shares			(1,186,187)		1,186,187
Accretion of convertible redeemable preferred shares to redemption value			(222,846)			(222,846)
Balance at the end at Dec. 31, 2018	$ 1,516	(197,068)	6,405,318	(410,693)	(46,825,737)	(41,026,664)
Balance at the end (in shares) at Dec. 31, 2018	15,159,136
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Loss					(16,432,308)	(16,432,308)
Other comprehensive income (loss)				65,799		65,799
Exercise of share options	$ 3		18,697			$ 18,700
Exercise of share options (in shares)	34,000					34,000
Sharebased compensation			611,711			$ 611,711
Accretion of convertible redeemable preferred shares to redemption value			(246,184)			(246,184)
Balance at the end at Dec. 31, 2019	$ 1,519	(197,068)	6,789,542	(344,894)	(63,258,045)	(57,008,946)
Balance at the end (in shares) at Dec. 31, 2019	15,193,136
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Loss					(42,397,279)	(42,397,279)
Other comprehensive income (loss)				(6,087)		(6,087)
Exercise of share options	$ 370	(6,975,124)	7,115,682			$ 140,928
Exercise of share options (in shares)	3,694,934					3,694,934
Sharebased compensation			10,129,541			$ 10,129,541
Accretion of convertible redeemable preferred shares to redemption value			(248,113)			(248,113)
Balance at the end at Dec. 31, 2020	$ 1,889	$ (7,172,192)	$ 23,786,652	$ (350,981)	$ (105,655,324)	$ (89,389,956)
Balance at the end (in shares) at Dec. 31, 2020	18,888,070

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net loss	$ (42,397,279)	$ (16,432,308)	$ (15,266,184)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	858,408	816,686	909,002
Gain on disposal of property, equipment and software	327	(1,841)	(846)
Sharebased compensation	10,129,541	611,711	126,540
Change in fair value of warrant liabilities	0	(1,207,415)	(534,305)
Foreign exchange gain, net	644,693	(21,867)	(12,698)
Changes in operating assets and liabilities:
Accounts receivable, net	480,000	(480,000)
Prepayments and other current assets	(2,337,011)	111,516	(1,337,063)
Amount due from related parties	1,300,790	(704,253)	268,671
Other noncurrent assets	(13,292)	(38,040)	(28,808)
Accounts payable	1,097,261	153,737	389,124
Contract liabilities	(267,842)	993,378
Amount due to related parties	639,579	(1,778,469)	2,135,397
Accruals and other current liabilities	1,243,150	(34,277)	(913,495)
Other noncurrent liabilities	91,955	(142,114)
Net cash used in operating activities	(28,529,720)	(18,153,556)	(14,264,665)
Cash flows from investing activities:
Placement of shortterm investments		(19,000,000)	(58,000,000)
Withdrawal of shortterm investments	8,000,000	44,000,000	29,000,000
Proceeds from disposal of property, equipment and software	7,930	7,697	5,166
Purchase of property, equipment and software	(935,199)	(151,829)	(514,703)
Net cash (used in) generated from investing activities	7,072,731	24,855,868	(29,509,537)
Cash flows from financing activities:
Proceeds from borrowings	6,083,650	2,651,874	2,417,868
Proceeds from issuance of convertible redeemable preferred shares and warrants		68,999,999	50,000,033
Proceeds from exercise of share options	140,928	459,796
Repayment of borrowings	(1,063,670)	(2,417,192)	(1,360,051)
Payment of initial public offering costs	(721,532)
Net cash generated from financing activities	4,439,376	69,694,477	51,057,850
Effect of exchange rate on cash and cash equivalents	(364,177)	77,544	38,703
Net increase (decrease) in cash and cash equivalents	(17,381,790)	76,474,333	7,322,351
Cash and cash equivalents at the beginning of year	92,532,788	16,058,455	8,736,104
Cash and cash equivalents at the end of year	75,150,998	92,532,788	16,058,455
Supplemental cashflow disclosures:
Interest paid	202,165	142,058	91,085
Noncash activities:
Accretion of convertible redeemable preferred shares to redemption value	248,113	$ 246,184	222,846
Deemed contribution from convertible redeemable preferred shareholders			$ 1,186,187
Payables for deferred initial public offering cost	$ 2,276,183

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	12 Months Ended
	Dec. 31, 2020
ORGANIZATION AND BASIS OF PRESENTATION
ORGANIZATION AND BASIS OF PRESENTATION	1. ORGANIZATION AND BASIS OF PRESENTATION Adagene Inc. (the “Company”) is a limited liability company incorporated in the Cayman Islands on February 25, 2011. The Company, together with its subsidiaries (collectively, the “Group”) are principally engaged in research, development and production of monoclonal antibody drugs for cancers. As of December 31, 2020, the Company’s principal subsidiaries are as follows: Percentage of legal Date of Place of ownership Entity incorporation incorporation by the Company Principal activities Adagene (Hong Kong) Limited December 12, 2011 Hong Kong 100 % Investment holding Adagene Incorporated September 20, 2017 The United States of America 100 % Research and development of innovative medicines Adagene (Suzhou) Limited February 28, 2012 The People’s Republic of China (“PRC” or “China”) 100 % Research and development of innovative medicines Adagene Australia PTY Ltd. May 30, 2018 Australia 100 % Research and development of innovative medicines Adagene PTE. Ltd. March 27, 2020 Singapore 100 % Research and development of innovative medicines Adagene AG August 31, 2020 Switzerland 100 % Research and development of innovative medicines

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompany consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Principles of Consolidation The consolidated financial statements of the Group include the financial statements of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated upon consolidation. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the balance sheet dates and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in the Group’s consolidated financial statements include, but are not limited to, the useful lives and impairment of long‑lived assets, tax valuation allowance, share‑based compensation expenses and the fair value of warrant liabilities. Management bases the estimates on historical experience and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could materially differ from those estimates. Foreign currency translation The functional currency of the Company, Adagene (Hong Kong) Limited, Adagene Incorporated and Adagene PTE. Ltd. is the United States dollar (“US$”). The functional currency of the Company’s PRC subsidiary is Renminbi (“RMB”). The functional currency of the Company’s Australia subsidiary is Australian dollar (“AU$”). The functional currency of the Company’s Switzerland subsidiary is Swiss Franc (“CHF”). The determination of the respective functional currency is based on the criteria stated in Accounting Standard Codification (“ASC”) 830, Foreign Currency Matters . The Company uses US$ as its reporting currency. The financial statements of the Company’s PRC, Australia and Switzerland subsidiaries are translated from the functional currency to the reporting currency. Transactions denominated in foreign currencies are remeasured into the functional currency at the exchange rates quoted by the People’s Bank of China (the “PBOC”) prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are re‑measured at the exchange rates prevailing at the balance sheet date. Non‑monetary items that are measured in terms of historical costs in foreign currency are re‑measured using the exchange rates at the dates of the initial transactions. Exchange gains and losses are included in the consolidated statements of comprehensive loss. Assets and liabilities are translated at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as accumulated comprehensive loss and are shown as a separate component of other comprehensive loss in the consolidated statements of comprehensive loss. Cash and cash equivalents Cash and cash equivalents primarily consist of cash and demand deposits which are highly liquid. The Group considers highly liquid investments that are readily convertible to known amounts of cash and with original maturities from the date of purchase of three months or less to be cash equivalents. All cash and cash equivalents are unrestricted as to withdrawal and use. Short‑term investments Short‑term investments are deposits at bank with maturities of greater than three months, but less than twelve months. Short‑term investments are stated at cost, which approximates fair value. Interest earned is included in interest income. Accounts receivable and allowance for doubtful accounts Account receivable is recorded when the Group has an unconditional right to consideration. A right to consideration is unconditional if only the passage of time is required before payment of that consideration is due. Accounts receivable are carried at net realizable value. An allowance for doubtful accounts is recorded in the period when collection of the amount is no longer probable. In evaluating the collectability of receivable balances, the Group considers specific evidence including the aging of the receivable, the customer’s payment history, its current credit‑worthiness and other factors. Accounts receivable are written off when management determines a balance is uncollectable after all collection efforts have ceased. Fair value measurements The Group applies ASC 820, Fair Value Measurements and Disclosures . ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 requires disclosures to be provided for fair value measurements. ASC 820 establishes a three‑tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Includes other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. The carrying amounts of cash and cash equivalent, short‑term investments, accounts receivable, amounts due to related parties and other current assets, accounts payable, amounts due to related parties, accrued liabilities and other current liabilities and short‑term borrowings approximate their fair values because of their generally short maturities. The carrying amount of long‑term borrowings approximate their fair values since they bear interest rates which approximate market interest rates. As more fully described in Note 8, the Group issued warrants to two Series C-1 preferred shareholders to purchase its preferred shares. The warrants have expired on April 1, 2019. The Group measured its warrant liabilities at fair value on a recurring basis. As the Group’s warrants are not traded in an active market with readily observable prices, the Group uses significant unobservable inputs to measure the fair value of warrant liabilities. These instruments are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. The following table presents a reconciliation of all financial instruments measured at fair value on a recurring basis using Level 3 unobservable inputs: Warrant liabilities US$ Initial recognition during the year ended December 31, 2018 1,741,720 Fair value change (534,305) Balance as of December 31, 2018 1,207,415 Fair value change (1,207,415) Balance as of December 31, 2019 — The Group did not transfer any assets or liabilities in or out of Level 3 during the years ended December 31, 2018, 2019 and 2020. The Group had no financial assets and liabilities measured and recorded at fair value on a nonrecurring basis as of December 31, 2019 and 2020. Property, equipment and software Property and equipment and software are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight‑line method over the estimated useful lives of the assets as follows: Category Estimated Useful Life Machinery and laboratory equipment 5 years Vehicles 4 years Furniture and tools 3 - 5 years Electronic equipment 3 years Computer software 3 - 5 years Leasehold improvements Lesser of lease terms or estimated useful lives of the assets Repair and maintenance costs are charged to expense as incurred, whereas the cost of renewals and betterments that extend the useful lives of property, equipment and software are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated depreciation and amortization from the asset and accumulated depreciation and amortization accounts with any resulting gain or loss reflected in the consolidated statements of comprehensive loss. Impairment of long‑lived assets The Group evaluates the recoverability of its long‑lived assets, including fixed assets and intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. When these events occur, the Group measures impairment by comparing the carrying amount of the assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group recognizes an impairment loss based on the excess of the carrying amount of the assets over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available. The adjusted carrying amount of the assets is the new cost basis and is depreciated over the assets’ remaining useful lives. Long‑lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. No impairment loss was recorded for the years ended December 31, 2019 and 2020. Segment reporting In accordance with ASC 280, Segment Reporting , the Group’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer. The Group’s CODM reviews the consolidated results of operations when making decisions about allocating resources and assessing performance of the Group. The Group operates and manages it business as a single segment. No geographical segments are presented as substantially all of the Group’s long‑lived assets are located in the PRC. Revenue recognition At contract inception of collaboration and out‑licensing arrangements, the Group analyzes its arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Group first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are reflective of a vendor‑customer relationship and therefore within the scope of ASC 606. For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently. Under the criteria of Accounting Standard Codification (“ASC”) 606, Revenue from Contracts with Customers (Topic 606) (“ASC 606”), the Group recognizes revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. The Group adopted ASC 606 for all periods presented. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Group only applies the five‑step model to contracts when it is probable that the entity will collect substantially all the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. The Group reviews the contract to determine which performance obligations are distinct and represent a promise to provide distinct goods or services or a series of distinct goods or services as defined by the standard. The Group recognizes as revenue the amount of the transaction price that is allocated to each performance obligation as and when that performance obligation is satisfied. Licenses of Intellectual Property: Upfront non‑refundable payments for licensing the Group’s intellectual property are evaluated to determine if the license is distinct from the other performance obligations identified in the arrangement. For licenses determined to be distinct, the Group recognizes revenues from non‑refundable, up‑front fees allocated to the license at a point in time, when the transfer of control of the license to the licensee occurs and the licensee is able to use and benefit from the license. Milestone Payments: At the inception of each arrangement that includes development, commercialization, and regulatory milestone payments, the Group evaluates whether the milestones are considered probable of being reached and to the extent that a significant reversal of cumulative revenue would not occur in future periods, estimates the amount to be included in the transaction price using the most likely amount method. The transaction price is then allocated to each performance obligation on a relative stand‑alone selling price basis, for which the Group recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Group re‑evaluates the probability of achieving such development milestones and any related constraint, and if necessary, adjust the estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch‑up basis, which would affect revenues and earnings in the period of adjustment. Royalties: For arrangements that include sales‑based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Group recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, no milestone payments or royalty payments were received. Substantially all of the Group’s revenue has been derived from its out‑licensing agreements with respect to licensed products such as DNA sequences, cell lines, etc., and such revenues are recognized when the customer obtains control of the licensed product, which occurs at a point in time, upon delivery to the customer. Contract assets and contract liabilities When a customer pays consideration before the Group transfers products or services, the Group records its obligation as a contract liability; When the Group satisfies its performance obligations by providing products or services to a customer before the customer pays consideration and before payment is due, the Group recognizes its rights to consideration as a contract asset. Research and development expenses Elements of research and development expenses primarily include (1) payroll and other related costs of personnel engaged in research and development activities, (2) costs related to pre‑clinical testing of the Group’s technologies under development and clinical trials such as payments to contract research organizations (“CRO”) and contract manufacturing organizations (“CMO”), investigators and clinical trial sites that conduct the clinical studies; (3) costs to develop the product candidates, including raw materials and supplies, product testing, depreciation and amortization, and facility related expenses, (4) other research and development expenses. Research and development expenses are charged to expense as incurred when these expenditures relate to the Group’s research and development services and have no alternative future uses. As of December 31, 2020, the Group has several ongoing clinical studies in various clinical trial stages. The contracts with CRO and CMO are generally cancellable, with notice, at the Group’s option. The Group did not record any accrued expenses related to cancellation of CRO or CMO contracts as of December 31, 2020 as the Group did not have any plan to cancel the existing CRO or CMO contracts. Government subsidies Government subsidies primarily consist of financial subsidies received from provincial and local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the governments. The Group’s PRC based subsidiary received government subsidies from certain local government. The Group’s government subsidies consist of specific subsidies and other subsidies. Specific subsidies are subsidies that the local government has set certain conditions for the subsidies. Other subsidies are the subsidies that the local government has not set any conditions and are not tied to future trends or performance of the Group, receipt of such subsidy income is not contingent upon any further actions or performance of the Group and the amounts do not have to be refunded under any circumstances. The Group recorded specific subsidies as other non‑current liabilities when received and recognized as other income when the conditions are met. Other subsidies are recognized as other income upon receipt as further performance by the Group is not required. Leases Leases are classified at the inception date as either a capital lease or an operating lease. The Group assesses a lease to be a capital lease if any of the following conditions exists: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are expensed on a straight‑line basis over their respective lease terms. The Group leases certain office space under non‑cancelable operating lease agreements. Certain lease agreements contain rent holidays. Rent holidays are considered in determining the straight‑line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the leased property for purpose of recognizing lease expense on straight‑line basis over the term of the lease. Comprehensive loss Comprehensive loss is defined as the changes in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Accumulated other comprehensive loss of the Group includes foreign currency translation adjustments related to the Group and its subsidiaries whose functional currency is not US$. Income taxes The Group follows the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”). Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Group records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax rate. The Group evaluates its uncertain tax positions using the provisions of ASC 740, which prescribes a recognition threshold that a tax position is required to meet before being recognized in the consolidated financial statements. The Group recognizes in the consolidated financial statements the benefit of a tax position which is “more likely than not” to be sustained under examination based solely on the technical merits of the position assuming a review by tax authorities having all relevant information. Tax positions that meet the recognition threshold are measured using a cumulative probability approach, at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. It is the Group’s policy to recognize interest and penalties related to unrecognized tax benefits, if any, as a component of income tax expense. Borrowings Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the consolidated statements of comprehensive loss over the period of the borrowings using the effective interest method. Share‑based compensation The Company grants restricted shares and stock options to eligible employees and nonemployees and accounts for share-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Share-based compensation awards are measured at the grant date fair value of the awards and recognized as expenses a) immediately at the grant date if no vesting conditions are required; or b) for share-based awards granted with only service conditions, using the straight-line method over the vesting period; or c) for share-based awards granted with service conditions and performance conditions, using the graded vesting method over the vesting period if and when the company concludes that it is probable that the performance conditions will be achieved. A change in any of the terms or conditions of share-based awards is accounted for as a modification of the awards. The Group calculates incremental compensation expense of a modification as the excess of the fair value of the modified awards over the fair value of the original awards immediately before its terms are modified at the modification date. For vested awards, the Group recognizes incremental compensation cost in the period when the modification occurs. For awards not being fully vested, the Group recognizes the sum of the incremental compensation expense and the remaining unrecognized compensation expense for the original awards over the remaining requisite service period after modification. Net loss per share In accordance with ASC 260, Earnings Per Share , basic net loss per share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of unrestricted ordinary shares outstanding during the year using the two‑class method. Under the two‑class method, net loss is allocated between ordinary shares and other participating securities based on dividends declared (or accumulated) and participating rights in undistributed earnings as if all the earnings for the reporting period had been distributed. The Company’s convertible redeemable preferred shares are participating securities because they are entitled to receive dividends or distributions on an as converted basis. Diluted net loss per share is calculated by dividing net loss attributable to ordinary shareholders, as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares include ordinary shares issuable upon the conversion of the convertible redeemable preferred shares using the if‑converted method, and ordinary shares issuable upon the exercise of share options, using the treasury stock method. Ordinary share equivalents are excluded from the computation of diluted earnings per share if their effects are anti‑dilutive. For the periods presented herein, the computation of basic net loss per share using the two‑class method is not applicable as the Group is in a net loss position and the participating securities do not have contractual rights and obligations to share in the losses of the Group. Employee defined contribution plan As stipulated by the regulations of the PRC, full‑time employees of the Group are entitled to staff welfare benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a PRC government‑mandated multi‑employer defined contribution plan. The Group is required to accrue for these benefits based on certain percentages of the qualified employees’ salaries. The Group is required to make contributions to the plans out of the amounts accrued. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Group’s obligations are limited to the amounts contributed. The Group has no further payment obligations once the contributions have been paid. The Group recorded employee benefit expenses of US$1,145,165 and US$622,377 for the years ended December 31, 2019 and 2020, respectively. Concentration of risks Concentration of credit risk As of December 31, 2019 and 2020, the aggregate amount of cash and cash equivalents and short‑term investments of US$801,923 and US$3,424,456 respectively, were held at major financial institutions located in the mainland of China, and US$99,730,865 and US$71,726,542, respectively, were deposited with major financial institutions located outside the mainland of China. Management believes that these financial institutions are of high credit quality and continually monitors the credit worthiness of these financial institutions. Accounts receivable are typically unsecured and denominated in US$ and are derived from revenues earned from customers. The Group manages credit risk of accounts receivable through ongoing monitoring of the outstanding balances. Concentration of suppliers A significant portion of the Group’s research and development services were purchased from its one supplier, who collectively accounted for 23.13% and 21.51% of the Group’s total research and development services purchases for the years ended December 31, 2019 and 2020, respectively. Business and economic risk The Group believes that changes in any of the following areas could have a material adverse effect on the Group’s future consolidated financial position, results of operations or cash flows: changes in the overall demand for services; competitive pressures due to new entrants; advances and new trends in new technologies and industry standards; changes in certain strategic relationships; regulatory considerations and risks associated with the Group’s ability to attract employees necessary to support its growth. The Group’s operations could also be adversely affected by significant political, regulatory, economic and social uncertainties in the PRC. Foreign currency exchange rate risk A significant portion of the Group’s businesses are transacted in RMB, which is not a freely convertible currency. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China (the “PBOC”). However, the unification of the exchange rates does not imply that the RMB may be readily convertible into US$ or other foreign currencies. All foreign exchange transactions continue to take place either through the PBOC or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC. Approval of foreign currency payments by the PBOC or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. From July 21, 2005, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. For U.S. dollar against RMB, there was appreciation and depreciation of approximately 1.3% and 6.5% in the years ended December 31, 2019 and 2020, respectively. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The functional currency and the reporting currency of the Company are the US$. However, large portion of the expenses of the Group are denominated in RMB. Any significant fluctuation of the valuation of RMB may materially affect the Group’s cash flows, expenses, losses and financial position, and the value of any dividends payable on the American Depositary Shares in US$. Recently issued accounting pronouncements The Group is an emerging growth company (“EGC”) as defined by the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an EGC can take advantage of extended transition periods for complying with new or revised accounting standards. This allows an EGC to delay adoption of certain accounting standards until those standards would otherwise apply to private companies. The Group elected to take advantage of the extended transition periods. However, this election will not apply should the Group cease to be classified as an EGC. In February 2016, the FASB issued ASU No. 2016‑02 (“ASU 2016‑02”), Leases (Topic 842), which modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. In July 2018, the FASB issued ASU No. 2018‑10 (“ASU 2018‑10”), Codification Improvements to Topic 842, Leases, which clarifies certain aspects of the guidance issued in ASU 2016‑02; and ASU No. 2018‑11 (“ASU 2018‑11”), Leases (Topic 842): Targeted Improvements, which provides entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative‑effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP (Topic 840, Leases). Further, the FASB issued ASU No. 2020-05 (“ASU 2020-05”), Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, which extends the adoption date for certain entities. For the Group, the updated guidance is effective for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Group does not plan to early adopt the new lease standards and the Group expects that applying the ASU 2016‑02 would materially increase the assets and liabilities due to the recognition of right‑of‑use assets and lease liabilities on its consolidated balance sheets, with an immaterial impact on its consolidated statements of comprehensive loss and consolidated statements of cash flows. In June 2016, the FASB issued ASU No. 2016‑13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016‑13”). ASU 2016‑13 is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU requires enhanced disclosures to help

ACCOUNTS RECEIVABLE, NET

ACCOUNTS RECEIVABLE, NET	12 Months Ended
	Dec. 31, 2020
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET	3. ACCOUNTS RECEIVABLE, NET As of December 31, 2019 2020 US$ US$ Accounts receivable 480,000 — Allowance for doubtful accounts — — 480,000 —

PREPAYMENTS AND OTHER CURRENT A

PREPAYMENTS AND OTHER CURRENT ASSETS	12 Months Ended
	Dec. 31, 2020
PREPAYMENTS AND OTHER CURRENT ASSETS
PREPAYMENTS AND OTHER CURRENT ASSETS	4. PREPAYMENTS AND OTHER CURRENT ASSETS Prepayments and other current assets consist of the following: As of December 31, 2019 2020 US$ US$ Prepayments 211,435 1,907,781 Deposits(a) 970,394 1,646,446 Interest receivables 227,278 — Others 67,866 259,757 1,476,973 3,813,984 Note (a): The deposits represented the amounts that the Group paid to its CRO vendors for various outsourced research and development programs according to the terms of respective CRO agreement. The Group expects to recover the deposits if the program fails or the contract is cancelled.

PROPERTY, EQUIPMENT AND SOFTWAR

PROPERTY, EQUIPMENT AND SOFTWARE	12 Months Ended
	Dec. 31, 2020
PROPERTY, EQUIPMENT AND SOFTWARE
PROPERTY, EQUIPMENT AND SOFTWARE	5. PROPERTY, EQUIPMENT AND SOFTWARE Property, equipment and software consist of the following: As of December 31, 2019 2020 US$ US$ Machinery and laboratory equipment 3,462,343 4,150,822 Leasehold improvements 767,205 915,208 Electronic equipment 605,882 962,684 Furniture and tools 98,396 106,492 Vehicles 80,133 126,764 Software 71,056 95,586 Total property, equipment and software 5,085,015 6,357,556 Less: accumulated depreciation and amortization (3,205,690) (4,290,431) Net book value 1,879,325 2,067,125 Depreciation and amortization expenses recognized for the years ended December 31, 2019 and 2020 were US$816,686 and US$858,408, respectively.

ACCRUALS AND OTHER CURRENT LIAB

ACCRUALS AND OTHER CURRENT LIABILITIES	12 Months Ended
	Dec. 31, 2020
ACCRUALS AND OTHER CURRENT LIABILITIES
ACCRUALS AND OTHER CURRENT LIABILITIES	6. ACCRUALS AND OTHER CURRENT LIABILITIES Accrued liabilities and other current liabilities consist of the following: As of December 31, 2019 2020 US$ US$ Professional service fees 145,157 3,459,430 Payroll and related liabilities 2,370,523 2,390,025 Utility and maintenance 4,595 459 Other taxes and surcharge — 63,919 Others 19,889 145,664 2,540,164 6,059,497

BORROWINGS

BORROWINGS	12 Months Ended
	Dec. 31, 2020
BORROWINGS
BORROWINGS	7. BORROWINGS As of December 31, 2019 2020 US$ US$ Current Short‑term borrowings: Bank loans 716,723 3,831,476 Current portion of long‑term borrowings 322,525 1,183,926 Total current borrowings 1,039,248 5,015,402 Non‑Current Long‑term borrowings: Bank loans 1,515,868 2,965,563 Total non‑current borrowings 1,515,868 2,965,563 Total borrowings 2,555,116 7,980,965 Short‑term borrowings In March 2018, the Group borrowed a loan with the amount of RMB3,000,000 (equivalent to approximately US$437,114) from Bank of Jiangsu Co., Ltd. for a term of one year and at the interest rate of 5.22% per annum. The borrowing was repaid in March 2019. In June 2018, the Group borrowed a loan with the amount of RMB2,000,000 (equivalent to approximately US$291,409) from Bank of Jiangsu Co., Ltd. for a term of one year and at the interest rate of 5.22% per annum. The borrowing was repaid in June 2019. These borrowings with Bank of Jiangsu Co., Ltd were guaranteed by Peter Luo and Kristine She. Peter Luo is the Chairman, Chief Executive Officer and a principal shareholder of the Company. Kristine She is one of the senior management personnel of the Company. In May 2018, the Group borrowed a loan with the amount of RMB3,000,000 (equivalent to approximately US$437,114) from Bank of Ningbo Co., Ltd. for a term of one year and at the interest rate of 5.00% per annum. The borrowing was repaid in May 2019. In June 2018, the Group borrowed a loan with the amount of RMB2,000,000 (equivalent to approximately US$291,409) from Bank of Ningbo Co., Ltd. for a term of one year and at the interest rate of 5.00% per annum. The borrowing was repaid in June 2019. In July 2018, the Group borrowed a loan with amount of RMB6,000,000 (equivalent to approximately US$874,228) from Agricultural Bank of China Limited for a term of one year and at the interest rate of 5.22% per annum. The borrowing was guaranteed by Peter Luo, who is the Chairman, Chief Executive Officer and a principal shareholder of the Company. The borrowing was repaid in July 2019. In September 2019, the Group borrowed a loan with amount of RMB5,000,000 (equivalent to approximately US$766,295.27) from Bank of Ningbo Co., Ltd. for a term of one year and at the interest rate of 4.35% per annum and the borrowing was repaid in September 2020. In June 2020, the Group borrowed a loan with the amount of RMB10,000,000 (equivalent to approximately US$1,532,590.54) from Agricultural Bank of China Limited for a term of one year and at the interest rate of 4.2% per annum. In September 2020, the Group borrowed a loan with the amount of RMB5,000,000 (equivalent to approximately US$766,295.27) from Bank of Ningbo Co., Ltd. for a term of one year and at the interest rate of 4.2% per annum. In November 2020, the Group borrowed a loan with the amount of RMB5,000,000 (equivalent to approximately US$766,295.27) from China Merchants Bank Co., Ltd. for a term of one year and at the interest rate of 4.1% per annum. In November 2020, the Group borrowed another loan with the amount of RMB5,000,000 (equivalent to approximately US$766,295.27) from China Merchants Bank Co., Ltd. for a term of one year and at the interest rate of 4.1% per annum. Long‑term borrowings In February 2019, the Group borrowed a loan with amount of RMB7,500,000 (equivalent to approximately US$1,149,442.90) from Shanghai Pudong Development Bank Co., Ltd. for a term of three years and at the interest rate of 5.46% per annum. The Group repaid RMB375,000 (equivalent to approximately US$57,472.15) in August 2019 and RMB1,250,000 (equivalent to approximately US$191,573.82) in 2020. As of December 31, 2020, RMB3,375,000 (equivalent to approximately US$517,249.31) repayable within twelve months for this agreement was classified as “Current portion of long‑term borrowing”. In June 2019, the Group borrowed a loan with amount of RMB6,000,000 (equivalent to approximately US$919,554.32) from Shanghai Pudong Development Bank Co., Ltd. for a term of three years and at the interest rate of 5.23% per annum. The Group repaid RMB300,000 (equivalent to approximately US$45,977.72) in December 2019 and RMB1,000,000 (equivalent to approximately US$153,259.05) in December 2020. As of December 31, 2020, RMB2,700,000 (equivalent to approximately US$413,799.45) repayable within twelve months for this agreement was classified as “Current portion of long‑term borrowing”. In September 2020, the Group borrowed a loan with amount of RMB16,500,000 (equivalent to approximately US$2,528,774.39) from Shanghai Pudong Development Bank Co., Ltd. for a term of three years and at the interest rate of 4.27% per annum. As of December 31, 2020, RMB1,650,000 (equivalent to approximately US$252,877.44) repayable within twelve months for this agreement was classified as "Current portion of long-term borrowing". Future maturities of short‑term borrowings and long‑term borrowings Future principal maturities of short‑term borrowings and long‑term borrowings as of December 31, 2020 are as followings: US$ 2021 5,015,402 2022 1,279,713 2023 1,685,850 7,980,965

CONVERTIBLE REDEEMABLE PREFERRE

CONVERTIBLE REDEEMABLE PREFERRED SHARES AND WARRANTS	12 Months Ended
	Dec. 31, 2020
CONVERTIBLE REDEEMABLE PREFERRED SHARES AND WARRANTS
CONVERTIBLE REDEEMABLE PREFERRED SHARES AND WARRANTS	8. CONVERTIBLE REDEEMABLE PREFERRED SHARES AND WARRANTS In November 2011, the Company issued convertible notes (“Series Pre‑A Convertible Notes”) to certain investors in the amount of 4,590,908. The notes carried a simple interest (non‑compounding) of 6% per annum as set out in the note purchase agreement. All outstanding principal balance and accrued but unpaid interest of the notes should be automatically converted into the convertible redeemable preferred shares of the Company at a price no more than US$1 per share. In November 2014, the Company issued 5,473,957 Series A‑1 convertible redeemable preferred shares (“Series A‑1 Preferred Shares”) to certain investors upon conversion of the Company’s Series Pre‑A convertible notes at a conversion price of US$1 per share. Concurrently, the Company issued 2,370,414 Series A‑2 convertible redeemable preferred shares (“Series A‑2 Preferred Shares”) to certain investors at US$1.27 per share for a total consideration of US$3,000,000. Series A‑1 Preferred Shares and Series A‑2 Preferred Shares are collectively referred to as the Series A Preferred Shares. From January through June 2016, the Company issued 7,494,537 Series B convertible redeemable preferred shares (“Series B Preferred Shares”) to certain investors at US$3.74 per share for a total consideration of US$27,999,995. From February through May 2018, the Company issued 5,597,354 Series C‑1 convertible redeemable preferred shares (“Series C‑1 Preferred Shares”) to certain investors at US$8.93 per share for a total consideration of US$50,000,033. Concurrently, in February 2018, the Company also issued warrants to two Series C‑1 investors at nil consideration (“Series C‑1 Warrants”). The Series C‑1 Warrants allowed the holders to purchase Series C‑2 Preferred Shares (defined below) at the exercise price of US$10.21 per share for a total consideration of up to US$7,500,000. Series C‑1 Warrants were exercisable, in whole or in part, at any time from the warrant issuance date to the earlier of i) April 1, 2019, ii) a deemed liquidation event or iii) the closing of the Qualified IPO. Series C‑1 Warrants expired on April 1, 2019. From June through November 2019, the Company issued 1,861,121 Series C‑2 convertible redeemable preferred shares (“Series C‑2 Preferred Shares”) to certain investors at US$10.21 per share for a total consideration of US$18,999,999. In December 2019, the Company issued 4,452,441 Series C‑3 convertible redeemable preferred shares (“Series C‑3 Preferred Shares”) to a certain investor at US$11.23 per share for a total consideration of US$50,000,000. Series C‑1 Preferred Shares, Series C‑2 Preferred Shares and Series C‑3 Preferred Shares are collectively referred to as the Series C Preferred Shares. The key features of the Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares (collectively the “Preferred Shares”) are as follows: Dividends Each holder of the Preferred Shares will be entitled to receive non‑cumulative dividends when declared by the Board of Directors prior and in preference to ordinary shareholders. The dividend should be paid at the rate of 6% of the original issue price per share per annum on each Preferred Shares in the sequence of Series C Preferred Shares and Preferred Shares other than the Series C Preferred Shares. After the preferential dividends relating to the Preferred Shares have been paid in full or declared and set apart in any fiscal year of the Company, any additional dividends out of funds or assets legally available therefore may be declared in that fiscal year for the Shares and, if such additional dividends are declared, the preferred shareholders shall be entitled to participate on an as converted‑basis pro‑rata in any dividends or distributions paid to the ordinary shareholders. Voting Each Preferred Share has voting rights equivalent to the number of ordinary shares to which it is convertible at the record date. The Preferred Shares shall vote separately as a class with respect to certain specified matters. Otherwise, the preferred shareholders and ordinary shareholders shall vote together as a single class. Liquidation preference In the event of any liquidation, dissolution or winding up of the Company, or the cessation of the business of the Company or of a substantial portion of the business of the Company, whether voluntary or involuntary, or any deemed liquidation event (unless waived by the preferred shareholders), the preferred shareholders shall be entitled to receive a per share amount equal to 100% of the original issue price of the respective series of the Preferred Shares, in the sequence of Series C Preferred Shares, Series B Preferred Shares and Series A Preferred Shares. After such liquidation amounts have been paid in full, the preferred shareholders are entitled to receive a simple interest accruing on each Preferred Share at 6% of its original issue price per annum from the date of issuance of such Preferred Share to the date of distribution of such amount, in the sequence of Series C Preferred Shares, Series B Preferred Shares and Series A Preferred Shares. After such interest amounts have been paid in full, any remaining funds or assets of the Company legally available for distribution to shareholders shall be distributed on a pro rata basis among the preferred shareholders, on an as‑converted basis, together with the ordinary shareholders. Conversion Each Preferred Share may be converted at any time into ordinary shares at the option of the preferred shareholders based on the then‑effective conversion price. The initial conversion ratio is 1:1, subject to adjustment in the event of share splits, share combinations, ordinary share dividends or distributions, other dividends, reorganizations, mergers, consolidations, reclassifications, exchanges, substitutions, or dilutive issuance. All Preferred Shares are converted automatically into ordinary shares at the then effective applicable conversion price upon the earlier of a Qualified Public Offering (public offering of the Company’s shares with an offering price (exclusive of underwriting commissions and expenses) that reflects a market capitalization (immediately prior to the public offering) of not less than US$650,000,000 and with an aggregate proceeds of no less than US$75 million)or a date specified by written consent or agreement of the holders of at least 80% of the voting power of the then outstanding Preferred Shares. Redemption The Preferred Shares are redeemable upon request by the holders of the majority outstanding Preferred Shares if the Company fails to consummate a Qualified Public Offering or complete a deemed liquidation event on or before March 31, 2025 at the redemption price equal to the original issue price plus any declared but unpaid dividends. Accounting for Preferred Shares The Preferred Shares are classified as mezzanine equity in the consolidated balance sheets because they are contingently redeemable upon the occurrence of an event outside of the Company’s control (e.g. the Company not achieving a Qualified Public Offering or a deemed liquidation event before March 31, 2025 (“Target QIPO Date”)). The Preferred Shares were determined to be mezzanine equity with no embedded feature to be bifurcated and no beneficial conversion features to be recognized. The Preferred Shares are initially recorded at their respective issuance date fair value, net of issuance cost and fair value allocated to the detachable warrants. The Company did not incur material issuance cost for any Preferred Shares issued. The Company concluded that the Preferred Shares are not currently redeemable, but are probable to become redeemable. The Company accreted changes in the redemption value over the period from the date of issuance to the earliest redemption date using the interest method. No accretion charge was recorded as the redemption value is fixed to original issue price for the years presented, except for Series C‑1 Preferred Shares issued with detachable warrants. Modification of Preferred Shares The Company made several amendments to the Preferred Shares, mainly including: 1) added redemption rights for Series A Preferred Shares upon the issuance of the Series B Preferred Shares; 2) extended the Target QIPO Date upon the issuance of the Series C‑1 Preferred Shares and the Series C‑3 Preferred Shares. These amendments are accounted for as modifications rather than extinguishments as the fair values of these Preferred Shares immediately after the amendments were not significantly different from their respective fair values immediately before the amendment. When Preferred Shares are modified and such modification results in value transfer between preferred shareholders and ordinary shareholders, the value transferred is treated as a deemed dividend to or deemed contribution from the preferred shareholders. On February 2, 2018, the Target QIPO Date was extended from January 19, 2023 to February 2, 2025 (7th anniversary of Series C‑1 closing) upon issuance of Series C‑1 Preferred Shares. On the date of the modifications, the Company assessed the total fair value of preferred shares immediately before and after the change of the terms with the assistance from an independent third‑party appraiser. The combined change in fair value of Preferred Shares immediately before and after the modification was US$1,186,187. The increase in fair value of the ordinary shares of is US$1,186,187, in substance, a transfer of wealth mostly from the preferred shareholders to the ordinary shareholder, and therefore are recorded as deemed contribution from the Preferred Shareholders. The Company’s Preferred Shares activities for the periods presented are summarized below: Mezzanine equity Series A‑1 Series A‑2 Series B Series C‑1 Series C‑2 Series C‑3 Total US$ US$ US$ US$ US$ US$ US$ Balance as of December 31, 2017 5,473,957 3,000,000 27,999,995 — — — 36,473,952 Issuance of Series C‑1 Preferred Shares — — — 48,258,313 — — 48,258,313 Accretion of Series C‑1 Preferred Shares to redemption value — — — 222,846 — — 222,846 Balance as of December 31, 2018 5,473,957 3,000,000 27,999,995 48,481,159 — — 84,955,111 Issuance of Series C‑2 Preferred Shares — — — — 18,999,999 — 18,999,999 Issuance of Series C‑3 Preferred Shares — — — — — 50,000,000 50,000,000 Accretion of Series C‑1 Preferred Shares to redemption value — — — 246,184 — — 246,184 Balance as of December 31, 2019 5,473,957 3,000,000 27,999,995 48,727,343 18,999,999 50,000,000 154,201,294 Accretion of Series C‑1 Preferred Shares to redemption value — — — 248,113 — — 248,113 Balance as of December 31, 2020 5,473,957 3,000,000 27,999,995 48,975,456 18,999,999 50,000,000 154,449,407 The warrants are freestanding instruments and classified as liabilities in accordance with ASC 480. The warrants are initially recognized at fair value, with subsequent changes in fair value recorded currently in earnings. The Company recognized gains from the decrease in fair value of the warrants of US$534,305, US$1,207,415 and nil for the years ended December 31, 2018, 2019 and 2020, respectively. The Company has measured the warrant liabilities at fair values on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2018. The Group used the Black‑Scholes option pricing model to estimate the fair value of warrant liabilities using the following assumptions: For the year ended December 31, 2018 Risk‑free interest rate 1.92%, 2.37% Exercise price US$10.2089 Maturity date 01/04/2019 Estimated volatility rate 63.78%, 71.00% The model requires the input of highly subjective assumptions including the risk‑free rate interest rate, maturity date, estimated volatility rate and fair value of underlying preferred shares. The risk‑free rate for periods within the contractual life is based on the US treasury strip bond with maturity similar to the maturity of the warrants as of valuation dates. For expected volatilities, the Company has made reference to the historical daily stock prices volatilities of ordinary shares of several comparable companies in the same industry as the Company. The estimated fair value of the preferred shares was determined with assistance from an independent third‑party valuation firm. The significant unobservable inputs used in the fair value measurement of the warrant liabilities include risk‑free interest rate, interval between valuation date and maturity date, estimated volatility rate and fair value of underlying preferred shares. Significant decreases in interval between valuation date and maturity date, estimated volatility rate and fair value of underlying preferred shares would result in a significantly lower fair value measurement. Significant increases in risk‑free interest rate would result in a significantly lower fair value measurement.

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	12 Months Ended
	Dec. 31, 2020
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION	9. SHARE‑BASED COMPENSATION On November 7, 2015, the Company adopted a share incentive plan (“2015 Plan”). Under the 2015 Plan, the Company’s Board of Directors has approved that a maximum aggregate number of shares that may be issued pursuant to all awards granted shall be 4,336,126. In September 2017, the Company replaced 2015 Plan with the amended and restated share incentive plan (“2017 Plan”) and increased the maximum number of shares issuable to 6,336,126. In December 2019, the Company replaced 2017 Plan with the second amended and restated share incentive plan (“2019 Plan”) and further increased the maximum number of shares issuable to 11,391,131. The terms of the 2015 Plan, 2017 Plan and 2019 Plan are substantially the same other than the maximum aggregate number of shares the Company may issue under the respective plan. Share options containing only service conditions granted to each grantee under the share incentive plan will generally be exercisable upon the grantee renders service to the Company in accordance with a stipulated vesting schedule. Grantees are generally subject to a vesting schedule of no longer than five years, under which the grantee earns an entitlement to vest a certain percentage of his option grants at the end of each month or year of completed service. The share option awards shall expire no more than 10 years from their grant dates. Share options containing both service conditions and performance conditions granted to each grantee under the share incentive plan shall become eligible for vesting upon the occurrence of their applicable performance conditions (including but not limited to the occurrence of an initial public offering ("IPO"), the completion of business and operational goals, etc.). Upon being eligible for vesting, each such performance-based option shall vest in a series of four equal and continuous annual installments for each full year of services completed following the award date of such option. On August 15, 2020, pursuant to board resolution, 184,692 share options that granted to a senior management was modified and the vesting period of the 184,692 share options has been shortened from 5 years to 4 years. Since the fair value of the modified award is lower than the fair value of the original award immediately before the modification, there is no incremental compensation cost to be recognized. On November 9, 2020, the Company passed a board resolution to waive the vesting schedules and conditions of 2,375,000 share options granted to certain management members. Pursuant to this board resolution, these management members exercised all these share options at the original exercise price per share ranging from US$1.83 to US$2.26 and as a result, 2,375,000 ordinary shares were issued to them. These management members paid the exercise price by issuing recourse promissory notes in the total amount of US$5,197,650. However, the Company still has the repurchase right to buy back such shares at the original exercise price if the grantees do not meet the original vesting conditions. The Company assessed and considered that in accordance with guidance set out in ASC 718-10-55-31, given such arrangement allows the shares received on exercise be returned to the Company if the original vesting conditions are not satisfied, there has been no substantial change to the vesting conditions and the Company shall continue to account for the share awards in accordance with their original terms. As of December 31, 2020, there were 2,285,000 shares unvested according to the original vesting conditions. As of December 31, 2020, the Company has granted 2,178,808 share options containing both service conditions and performance conditions. All other share options granted contain only service conditions. Weighted Weighted‑ Weighted‑ Average Average Average Remaining Aggregate Number of Exercise Grant Date Contractual Intrinsic Options Price Fair Value Term Value US$ per US$ per option option Years US$ Outstanding at January 1, 2018 848,828 0.38 3.75 8.56 4,907,569 Forfeited (274,500) 0.55 5.71 — — Outstanding at January 1, 2019 574,328 0.30 2.80 7.14 3,734,644 Granted 372,500 1.26 5.46 — — Exercised (34,000) 0.55 5.71 — — Forfeited (46,800) 1.22 5.75 — — Outstanding at December 31, 2019 866,028 0.65 3.67 7.27 6,328,171 Granted 6,313,373 2.00 7.01 — — Exercised (3,694,934) 1.93 6.55 — — Forfeited (190,000) 1.70 6.91 — — Outstanding at December 31, 2020 3,294,467 1.75 6.65 8.78 33,410,968 Vested and expected to vest at December 31, 2020 3,294,467 1.75 6.65 8.78 33,410,968 Exercisable at December 31, 2020 393,424 0.75 4.46 6.68 4,859,836 The aggregate intrinsic value in the table above represents the difference between the exercise price of the awards and the fair value of the underlying ordinary shares at each reporting date, for those awards that had exercise price below the estimated fair value of the relevant ordinary shares. The aggregate fair value of the equity awards vested during the years ended December 31, 2018, 2019 and 2020 was US$165,609, US$366,113 and US$8,430,085, respectively. As of December 31, 2020, there was US$34,096,227 of total unrecognized employee share‑based compensation expense, may be adjusted for actual forfeitures occurring in the future. Total unrecognized compensation cost will be recognized over a weighted‑average period of 3.39 years. Fair value of share options The fair value of share options was determined using the binomial option valuation model, with the assistance from an independent third‑party appraiser. The binomial model requires the input of highly subjective assumptions, including the expected volatility, the exercise multiple, the risk‑free rate and the dividend yield. For expected volatility, the Group has made reference to historical volatility of several comparable companies in the same industry. The exercise multiple was estimated as the average ratio of the stock price to the exercise price of when employees would decide to voluntarily exercise their vested share options. The risk‑free rate for periods within the contractual life of the share options is based on the market yield of U.S. Treasury Bonds in effect at the time of grant. The dividend yield is based on the expected dividend policy over the contractual life of the share options. The estimated fair value of the ordinary shares, at the share option grant dates, was determined with the assistance from an independent third‑party appraiser. The assumptions used to estimate the fair value of the share options granted are as follows: For the year For the year ended ended December 31, December 31, 2019 2020 Risk‑free interest rate 1.78% - 2.73% 0.68% - 0.83% Dividend yield 0% 0% Expected volatility range 67.5% - 71.0% 72.3% - 73.4% Exercise multiple 2.2 - 2.8 2.2 - 2.8 Contractual life 10 years 10 years Total share‑based compensation expenses recognized for the years ended December 31, 2018, 2019 and 2020 were as follows: For the years ended December 31, 2018 2019 2020 US$ US$ US$ Research and development expenses 126,540 404,620 6,472,083 Administrative expenses — 207,091 3,657,458 Total share‑based compensation expenses 126,540 611,711 10,129,541 Up to the date of the issuance of these consolidated financial statements, some proceeds of the subscription capital arising from the exercise of vested share options by certain employees remained outstanding and such amount was presented as subscriptions receivable, a contra‑equity balance on the consolidated balance sheets as of December 31, 2019 and 2020, respectively.

COLLABORATION ARRANGEMENTS

COLLABORATION ARRANGEMENTS	12 Months Ended
	Dec. 31, 2020
COLLABORATION ARRANGEMENTS
COLLABORATION ARRANGEMENTS	10. COLLABORATION ARRANGEMENTS Guilin Sanjin Pharmaceutical Co., Ltd. License Agreement In December 2018, the Group entered into (i) a collaboration agreement (the “Sanjin Greater China Agreement”) that covers Greater China with Guilin Sanjin Pharmaceutical Co., Ltd. (“Sanjin”) and certain of its subsidiaries (collectively, “Sanjin Parties”) and (ii) a collaboration agreement (the “Sanjin ROW Agreement”, together with the Sanjin Greater China Agreement, the “2018 Sanjin Agreements”) that covers the regions other than Greater China with Sanjin. Pursuant to the Sanjin Greater China Agreement, the Group licensed the Chinese intellectual property directly related to a monospecific antibody molecule that binds to the PD‑L1 target (the “PD‑L1 Project”), including patent rights, patent application rights and technologies based on the core sequence of the molecule, to Sanjin Parties. Sanjin Parties will own all the Chinese intellectual property developed in the exercise of Sanjin Parties’ rights under the agreement, including but not limited to improvements (including combination products), clinical trials, regulatory filings, and commercialization rights relating thereto. The Group also granted Sanjin Parties a royalty‑free license to use our other existing intellectual property and improvements thereto which are related to the PD‑L1 Project for the purposes of exploiting its rights and performing its obligations under the agreement. Sanjin Parties will enjoy all the economic benefits deriving from the PD‑L1 Project in Greater China, including but not limited to patent transfer fee, licensing fee, sales revenue and sales commission, etc. Sanjin Parties will pay the Group (i) single‑digit percentage of net sales of the products that use the licensed antibody after such products enter the market and (ii) a low to mid‑low double‑digit percentage of the profits resulting from any transfer of the license to any third parties depending on the timing of the transfer relative to the development stage of the product. The Group also received RMB10,000,000 (equivalent to approximately US$1,511,168) upfront fee upon the effectiveness of the agreement from Sanjin Parties. Pursuant to the Sanjin ROW Agreement, the Group granted Sanjin a royalty‑free license to use all intellectual property relating to (i) the collaboration under the agreement that the Group controlled before the Group entered into the agreement or acquired independently of the agreement and (ii) improvements thereto for the purposes of exploiting its rights and performing its obligations under the agreement. Any intellectual property generated independently by a party under the agreement will be solely owned by that party who generated such intellectual property, and any intellectual property generated from cooperation between the Group and Sanjin’s affiliates in connection with the collaboration will be jointly owned. The Group retain the ownership of patent rights of key intellectual property pertaining to PD‑L1 outside of the Greater China. In addition, all the results obtained by Sanjin relating to the research and development of any new antibody developed under the agreement will be owned by Sanjin. The Group retain a majority of the economic benefits derived from the Sanjin ROW Agreement, including but not limited to any patent transfer fee, licensing fee and gains realized under such transfer. In case the Group intend to transfer to a third party our share of economic interests in any country outside of Greater China, the Group must notify Sanjin and Sanjin will receive a right of first refusal if it pays the Group a deposit equal to a low double‑digit percentage of the consideration that the Group expect to receive from such third party. If Sanjin waives the right of first refusal, the Group can proceed with the transfer, provided that the final transaction price with the third party is not lower than the amount of the offering price that was included in our notice to Sanjin. The Group agreed not to (i) independently develop any monospecific antibodies that bind to the PD‑L1 target or (ii) grant any rights associated with such antibodies to any third parties during the three‑year period from the effective date of the agreement. The exclusivity obligation does not prevent the Group from (i) developing or granting any licenses to third parties for intellectual property that covers bispecific antibodies, ADCs, diagnostic antibodies, nano‑particles and masked antibody against PD‑L1 target and (ii) continuing to provide antibody screening service that were commenced before the execution of the Sanjin Greater China Agreement and either party has the independent right to conduct combination therapy studies outside of the Greater China. Either non‑breaching party may terminate the 2018 Sanjin Agreements if the other party’s ability to comply with its respective obligations under the agreements is negatively affected by contingencies such as failure to maintain operation or changes in core project management and the other party fails to take effective remedial measures. Each agreement automatically terminates upon the termination of the other agreement. Upon the rescission or termination, Sanjin Parties will return to the Group all the intellectual property, documents and data provided by the Group under the 2018 Sanjin Agreements. In the event that the failure of the development of the product candidate solely arises from the Group’s research and development basis specified under this agreement, Sanjin has the right to claim back all the payment made to the Group. The Group considers the possibility of occurrence of such event is very remote. For the year ended December 31, 2018, the Group recognized revenue of RMB10,000,000 (equivalent to approximately US$1,511,168) for this agreement. Dragon Boat Biopharmaceutical (Shanghai) Limited License Agreement In May 2019, the Group entered into (i) a collaboration agreement that covers Greater China (the “Dragon Boat Greater China Agreement”) and (ii) a collaboration agreement that covers the regions other than Greater China (the “Dragon Boat ROW Agreement,” together with the Dragon Boat Greater China Agreement, the “2019 Dragon Boat Agreements”), with Dragon Boat Biopharmaceutical (Shanghai) Limited (“Dragon Boat”), a subsidiary of Sanjin. Pursuant to the Dragon Boat Greater China Agreement, the Group will license the Chinese intellectual property directly related to a certain monospecific antibody molecule that binds to a specified target (the “Specified Project”), including the patent rights, patent application rights and technologies based on the core sequence of the molecule, to Dragon Boat. Dragon Boat will own all the Chinese intellectual property developed in the exercise of Dragon Boat’s rights under the agreement, including but not limited to improvements (including combination products), clinical trials, regulatory filings, and commercialization rights relating thereto. The Group also granted Dragon Boat a royalty‑free license to use our other existing intellectual property and improvements thereto which are related to the Specified Project for the purposes of exploiting its rights and performing its obligations under the agreement. Dragon Boat will enjoy all the economic benefits deriving from the Specified Project in Greater China, including but not limited to patent transfer fee, licensing fee, sales revenue and sales commission, etc. and will pay the Group (i) certain high‑six figure dollar milestone payments upon the achievement of certain milestones (including milestones of launch of pre‑clinical safety evaluation animal test, obtaining Investigational New Drug (“IND”) approval in PRC and completion of clinical phase I test in PRC) and (ii) a single‑digit percentage of net sales of the products that use the licensed antibody after such products enter the market. Pursuant to the Dragon Boat ROW Agreement, the Group granted Dragon Boat a royalty‑free license to use all intellectual property relating to (i) the collaboration under the agreement that the Group controlled before the Group entered into the agreement or acquired independently of the agreement and (ii) improvements thereto for the purposes of exploiting its rights and performing its obligations under the agreement. Any intellectual property generated independently by a party under the agreement will be solely owned by that party who generated such intellectual property, and any intellectual property generated from cooperation between the Group and Dragon Boat in connection with the collaboration will be jointly owned. The Group retain the ownership of patent rights of key intellectual property pertaining to the specified target outside of the Greater China. In addition, all the results obtained by Dragon Boat relating to the research and development of any new antibody developed under the agreement will be owned by Dragon Boat. The Group retains a majority of the economic benefits derived from the Dragon Boat ROW Agreement, including but not limited to any patent transfer fee, licensing fee and gains realized under such transfer. In case the Group intend to transfer to a third party our share of economic interests in any country outside of Greater China, the Group must notify Dragon Boat and Dragon Boat will receive a right of first refusal if it pays the Group a deposit equal to a low double‑digit percentage of the consideration that the Group expects to receive from such third party. If Dragon Boat waives the right of first refusal, the Group can proceed with the transfer, provided that the final transaction price with the third party is not lower than the amount of the offering price that was included in our notice to Dragon Boat. Under the 2019 Dragon Boat Agreements, the Group agreed not to (i) independently develop any monospecific antibodies that bind to the specified target or (ii) grant any rights associated with such antibodies to any third parties during the three‑year period from the effective date of the agreements. The exclusivity obligation does not prevent the Group from (i) developing or granting any licenses to third parties for intellectual property that covers bispecific antibodies, ADCs, diagnostic antibodies, nano‑particles and masked antibody against the specific target and (ii) continuing to provide antibody screening service that were commenced before the execution of the Dragon Boat Greater China Agreement and either party has the independent right to conduct combination therapy studies outside of the Greater China. Either nonbreaching party may terminate the 2019 Dragon Boat Agreements if the other party’s ability to comply with its obligations under the agreements is negatively affected by contingencies such as failure to maintain operation or changes in core project management and the other party fails to take effective remedial measures. Each agreement automatically terminates upon the termination of the other agreement. Upon the rescission or termination, Dragon Boat will return to the Group all the intellectual property, documents and data provided by the Group under the 2019 Dragon Boat Agreements. In the event that the failure of the development of the product candidate solely arises from the Group’s research and development basis specified under this agreement, Dragon Boat has the right to claim back all the payment made to the Group. For the year ended December 31, 2019, no revenue was recognized for this agreement since the licensed product has not been transferred to Dragon Boat. As of December 31, 2020, upfront fee of RMB4,000,000 (equivalent to approximately US$573,378) that was received by the Group was recorded as contract liabilities in the consolidated balance sheets, as the performance obligation had not been satisfied by the Group. Signal Pharmaceuticals LLC Agreements In January 2019, the Group entered into an agreement with Signal Pharmaceuticals LLC, a subsidiary of Celgene Corporation, for a purchase order of delivery of certain sequences with total consideration of US$480,000. For the year ended December 31, 2019, the Group recognized revenue of US$480,000 upon delivery of such sequences. In October 2018 and May 2019, the Group entered into agreements with Signal Pharmaceuticals LLC, for purchase orders of for a purchase order of delivery of certain sequences with total consideration of US$237,500 and US$72,000, respectively. For the year ended December 31, 2020, the Group recognized revenue of US$309,500 upon delivery of such sequences. ADC Therapeutics SA License and Collaboration Agreements In April 2019, the Group entered into a material transfer and collaboration agreement (the “ADCT Collaboration Agreement”) and a license agreement (the “ADCT License Agreement”) with ADC Therapeutics SA (“ADC Therapeutics”). These two agreements are combined as a single contract as the agreements were negotiated as a package with a single commercial objective. ADCT Collaboration Agreement Pursuant to the ADCT Collaboration Agreement, the Group agreed to generate masked antibodies with respect to up to two exclusive targets selected by ADC Therapeutics. Upon our delivery of certain initial results, ADC Therapeutics has the option to license the Group’s technology with respect to one or both targets as further detailed below. ADC Therapeutics has not yet exercised such options as of December 31, 2020. Under the ADCT Collaboration Agreement, the Group is eligible to receive up to a low‑seven‑figure dollar amount in consideration for the Group’s exclusivity obligations, upon achievement of certain development milestones (including milestones of delivery of certain amino acid sequences and successful outcome of the first in‑vivo study) and upon ADC Therapeutics’ election to proceed with development for the two elected targets. Apart from performance obligation to deliver the amino acid sequences of the corresponding masking peptides, the Group is not required to perform any additional research and development services. ADC Therapeutics has the right to terminate the ADCT Collaboration Agreement at any time and for any reason in its entirety or on a target‑by‑target basis upon thirty days’ prior written notice to the Group. Either party may terminate the ADCT Collaboration Agreement, in its entirety or on a target‑by‑target basis, upon the other party’s uncured material breach of the agreement or the other party’s insolvency‑related events. The Group also granted ADC Therapeutics an exclusive target reservation right for one year from the commencement of the agreement and an option to renewal for another year with a consideration of low‑six‑figure dollar amount. ADCT License Agreement Subject to the exercise of the options contained in the ADCT Collaboration Agreement, the Group has granted ADC Therapeutics, with respect to each elected target, an exclusive, worldwide, perpetual and irrevocable (subject only to the termination provisions) license (with the right to grant sublicenses) to develop, make, use, commercialize and import the antibody drug conjugates that comprise masked antibodies generated by the Group under these programs. Under the ADCT License Agreement, if ADC Therapeutics exercises both of its options granted thereunder, the Group could be eligible to receive up to a low‑nine‑figure dollar amount in development and regulatory milestone payments upon the achievement of certain milestones (including milestones of successful completion of Good Laboratory Practice Toxicology studies, launch of clinical trials and start of commercial sales in difference countries and etc.) and up to a mid‑eight‑figure dollar amount in sales milestone payments, in addition to mid‑single‑digit percentage net sales‑based tiered royalties on products licensed under the ADCT License Agreement, subject to certain reductions. Royalties, if any, will be payable on a country‑by‑country and product‑by‑product basis, until the earlier of (i) the tenth anniversary of the first commercial sale of such product or (ii) the expiration of the last‑to‑expire patent licensed under the agreement in such country, unless earlier terminated by the parties, following which any licenses granted to ADC Therapeutics under the ADCT License Agreement shall become fully paid up, perpetual and irrevocable. ADC Therapeutics has the right to terminate the ADCT License Agreement before the expiration of the royalty term on a product‑by‑product basis or in its entirety (i) for any reason or no reason upon thirty days’ written notice to the Group, or (ii) if ADC Therapeutics chooses to discontinue the development or sale of the applicable licensed product worldwide. Each party has certain rights to terminate the ADCT License Agreement with prior written notice upon the other party’s uncured material breach or insolvency. For the year ended December 31, 2020, the Group recognized US$225,000 upon delivery of such results. For the year ended December 31, 2020, the Group recognized US$100,000 as other income due to the expiration of exclusive target reservation right, which is not related to the Group's major operation activity.

INCOME TAX EXPENSE

INCOME TAX EXPENSE	12 Months Ended
	Dec. 31, 2020
INCOME TAX EXPENSE
INCOME TAX EXPENSE	11. INCOME TAX EXPENSE PRC Effective from January 1, 2008, the PRC’s statutory, Enterprise Income Tax (“EIT”) rate is 25%. In accordance with the implementation rules of EIT Law, a qualified “Technology Advanced Service Enterprises” (“TASE”) is eligible for a preferential tax rate of 15%. The TASE certificate is effective for three years. An entity must file required supporting documents with the tax authority and ensure fulfillment of the relevant TASE criteria before using the preferential rate. An entity could apply for the TASE certificate every year. Adagene (Suzhou) Limited was first recognized as a qualified TASE in March 2015 and renewed in December 2018. Adagene (Suzhou) Limited was authorized to enjoy the preferential tax rate of 15% from 2015 to 2021. Cayman Islands Adagene Inc. is incorporated in the Cayman Islands. Under the current laws of the Cayman Islands Adagene Inc. is not subject to tax on income or capital gain. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders. Hong Kong Adagene (Hong Kong) Limited is incorporated in Hong Kong. Companies registered in Hong Kong are subject to Hong Kong profits tax on the taxable income as reported in their respective statutory financial statements adjusted in accordance with the relevant Hong Kong tax laws. The applicable tax rate in Hong Kong is 16.5%. For the years ended December 31, 2018 and 2019, Adagene (Hong Kong) Limited did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earnings in Hong Kong for any of the periods presented. Under the Hong Kong tax law, Adagene (Hong Kong) Limited is exempted from income tax on its foreign‑derived income and there are no withholding taxes in Hong Kong on remittance of dividends. Australia Adagene Australia Pty Ltd. is incorporated in Australia. Companies registered in Australia are subject to Australia profits tax on the taxable income as reported in their respective statutory financial statements adjusted in accordance with the relevant Australia tax laws. The applicable tax rate in Australia is 30%. Adagene Australia Pty Ltd. has no taxable income for all periods presented, therefore, no provision for income taxes is required. United States Adagene Incorporated is incorporated in U.S. and is subject to U.S. federal corporate income tax at a rate of 21%. Adagene Incorporated is also subject to state income tax in California of 8.84%. Adagene Incorporated has no taxable income for all periods presented, therefore, no provision for income taxes is required. Reconciliation between the income tax expense computed by applying the statutory tax rate to loss before income tax and the actual provision for income tax is as follows: For the years ended December 31, 2018 2019 2020 US$ US$ US$ Loss before income tax (15,266,184) (16,432,308) (42,397,279) Income tax computed at respective applicable tax rate (30,560) 27,875 (1,073,105) Research and development super‑deduction (a) (579,090) (230,126) (718,979) Non‑deductible expenses 4,010 3,306 1,238 Changes in valuation allowance 605,640 198,945 1,790,846 Income tax expense — — — Note (a): Due to the impacts of research and development super‑deduction, the Group’s subsidiary, Adagene (Suzhou) Limited did not have any taxable profit for the years ended December 31, 2018, 2019 and 2020. Deferred tax assets and liabilities Deferred taxes were measured using the enacted tax rates for the periods in which the temporary differences are expected to be reversed. The tax effects of temporary differences that give rise to the deferred tax balances as of December 31, 2018, 2019 and 2020 are as follows: For the years ended December 31, 2018 2019 2020 US$ US$ US$ Deferred tax assets: Net operating loss carry forward 735,717 928,989 1,504,966 Depreciation and amortization of property, equipment and software 4,213 9,886 7,428 Gross deferred tax assets 739,930 938,875 1,512,394 Less: valuation allowance (739,930) (938,875) (1,512,394) Total deferred tax assets, net — — — Movement of the valuation allowance is as follows: For the years ended December 31, 2018 2019 2020 US$ US$ US$ Balance as of January 1 134,290 739,930 938,875 Addition 605,640 198,945 573,519 Balance as of December 31 739,930 938,875 1,512,394 A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion or all of the deferred tax assets will not be realized in the foreseeable future. In making such determination, the Group evaluates a variety of positive and negative factors including the Group’s operating history, accumulated deficit, the existence of taxable temporary differences and reversal periods. The Group has incurred net accumulated operating losses for income tax purposes since its inception. The Group believes that it is more likely than not that these net accumulated operating losses will not be utilized in the future. Therefore, the Group has provided full valuation allowances for the deferred tax assets as of December 31, 2019 and 2020. The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2019 and 2020, the Group did not have any significant unrecognized uncertain tax positions.

NET LOSS PER SHARE

NET LOSS PER SHARE	12 Months Ended
	Dec. 31, 2020
NET LOSS PER SHARE
NET LOSS PER SHARE	12. NET LOSS PER SHARE Basic and diluted net loss per share for the years ended December 31, 2018, 2019 and 2020 are calculated as follows: For the years ended December 31, 2018 2019 2020 US$ US$ US$ Numerator: Net loss attributable to Adagene Inc.’s shareholders (15,266,184) (16,432,308) (42,397,279) Deemed contribution from convertible redeemable preferred shareholders 1,186,187 — — Accretion of convertible redeemable preferred shares to redemption value (222,846) (246,184) (248,113) Net loss attributable to ordinary shareholders (14,302,843) (16,678,492) (42,645,392) Denominator: Weighted‑average number of ordinary shares outstanding—basic and diluted 15,159,136 15,178,232 15,950,698 Net Loss per share—basic and diluted (0.94) (1.10) (2.67) The effects of all outstanding convertible redeemable preferred shares and share options have been excluded from the computation of diluted loss per share for the years ended December 31, 2018, 2019 and 2020 as their effects would be anti‑dilutive. The potentially dilutive securities that have not been included in the calculation of diluted net loss per share as their inclusion would be anti‑dilutive are as follows: For the years ended December 31, 2018 2019 2020 Convertible redeemable preferred shares 20,430,200 21,977,914 27,249,824 Share options 293,133 582,526 1,795,932

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	12 Months Ended
	Dec. 31, 2020
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	13. RELATED PARTY TRANSACTIONS a) Related Parties Name of related parties Relationship Peter Luo Chairman, Chief Executive Officer and a principal shareholder of the Company Four senior management personnel Management and ordinary shareholders of the Company WuXi AppTec Co., Ltd. (“WuXi AppTec Group”) A principal shareholder of the Group WuXi Biologics (Shanghai) Co., Ltd. Controlled by the ultimate controlling party of a principal shareholder of the Group b) The Group had the following related party balances at the end of the year: As of December 31, 2019 2020 US$ US$ WuXi AppTec Group 739,051 124,704 Four senior management personnel(i) 350,865 — Peter Luo(i) 338,818 — WuXi Biologics (Shanghai) Co., Ltd. 4,452 7,692 Total amounts due from related parties 1,433,186 132,396 As of December 31, 2019 2020 US$ US$ WuXi Biologics (Shanghai) Co., Ltd. 1,379,741 2,361,503 WuXi AppTec Group 432,784 173,855 Peter Luo(ii) 83,254 — Total amounts due to related parties 1,895,779 2,535,358 c) The Group had the following related party transactions: For the years ended December 31, 2018 2019 2020 US$ US$ US$ Receipt of CRO and CMO services: WuXi Biologics (Shanghai) Co., Ltd. 6,535,512 3,567,962 7,217,709 WuXi AppTec Group 969,079 2,136,344 2,674,586 7,504,591 5,704,306 9,892,295 (i) In October and November 2017, Peter Luo and other four senior management personnel elected to exercise the vested share options that granted under 2015 Plan. As of December 31, 2018, the balance of amounts due from Peter Luo and other four senior management personnel represented the receivables arising from the exercise of share options and related withholding individual income tax amounts. The receivables arising from the exercise of share options were subsequently received in the year ended December 31, 2019. As of December 31, 2019, the balance of amounts due from Peter Luo and other four senior management personnel represented withholding individual income tax amounts. (ii) As of December 31, 2019, the balance of amounts due to Peter Luo represented the Group’s receipt of personal subsidy on behalf of Peter Luo, which was subsequently remitted to Peter Luo in May 2020.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 2020
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	14. COMMITMENTS AND CONTINGENCIES Operating lease commitments Future minimum payments under non‑cancelable operating leases with initial terms in excess of one year consist of the following as of December 31, 2020: US$ For the years ending: 2021 306,311 2022 240,530 2023 129,555 Total 676,396 Payments under operating leases are expensed on a straight‑line basis over the periods of their respective leases. The Group’s lease arrangements have no renewal options, rent escalation clauses, restrictions or contingent rents and are all executed with third parties. For the years ended December 31, 2019 and 2020, total rental related expenses for all operating leases amounted to US$175,812 and US$177,453, respectively. Contingencies The Group is currently not involved in any legal or administrative proceedings that may have a material adverse impact on the Group’s business, financial position or results of operations.

RESTRICTED NET ASSETS

RESTRICTED NET ASSETS	12 Months Ended
	Dec. 31, 2020
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS	15. RESTRICTED NET ASSETS The Group’s ability to pay dividends may depend on the Group receiving distributions of funds from its PRC subsidiary. Relevant PRC statutory laws and regulations permit payments of dividends by the Group’s PRC subsidiary only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Group’s PRC subsidiary. In accordance with the Company law of the PRC, a domestic enterprise is required to provide statutory reserves of at least 10% of its annual after‑tax profit until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. A domestic enterprise is also required to provide discretionary surplus reserve, at the discretion of the Board of Directors, from the profits determined in accordance with the enterprise’s PRC statutory accounts. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. The Group’s PRC subsidiary was established as domestic invested enterprise and therefore is subject to the above mentioned restrictions on distributable profits. As of December 31, 2019 and 2020, the total restricted net assets of the Company’s subsidiary incorporated in PRC and subjected to restriction amounted to approximately US$1,267,900 and US$1,267,900, respectively. Other subsidiaries are not subjected to such restriction. As a result of these PRC laws and regulations subject to the limit discussed above that require annual appropriations of 10% of after‑tax income to be set aside, prior to payment of dividends, as general reserve fund, the Group’s PRC subsidiary is restricted in their ability to transfer a portion of their net assets to the Group. Foreign exchange and other regulations in the PRC further restrict the Company’s PRC subsidiaries from transferring funds to the Company in the form of dividends, loans and advances. Since the Group has a consolidated shareholders’ deficit, its net asset base for purposes of calculating the proportionate share of restricted net assets of consolidated subsidiaries should be zero. Therefore, the restrictions placed on the net assets of the Company’s PRC subsidiaries with positive equity would result in the 25 percent threshold being exceeded and a corresponding requirement to provide parent company financial information (Note 18).

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	12 Months Ended
	Dec. 31, 2020
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	16. SUBSEQUENT EVENTS On January 16, 2021, the Company passed a board resolution whereby certain management members surrendered a total of 491,119 ordinary shares as repayment for their respective promissory notes issued in connection with the exercising of options granted to them. In the meantime, the Company further granted these management members the right to repurchase the surrendered shares by way of new option grants with an exercise price of US$13.85 per share. The fair values of these share options were US$7.85 per option, determined by using the binomial option valuation model. The share‑based compensation expense related to these share options is expected to be recognized immediately upon grants. Pursuant to the same board resolution, the 2021 Performance Incentive Plan (the “2021 Plan”) was also adopted, under which an aggregate of 2,994,000 ordinary shares shall be reserved for issuance, and the share limit will automatically increase on the first trading day in January of each year (commencing with 2022) by an amount equal to (1) 5% of the total number of the Company’s outstanding ordinary shares on December 31 of the prior year, or (2) such lesser number as determined by the board of directors. On March 12, 2021, pursuant to the 2021 Plan, the Compensation Committee of Board of Directors of the Company passed resolutions and granted 200,000 share options to a certain employee with an exercise price of US$17.10 per share. On March 16, 2021, pursuant to the 2021 Plan, the Chair of the Compensation Committee of the Company passed resolutions and (1) granted 408,000 share options to certain employees with an exercise price of US$17.56 per share, (2) issued 23,733 ordinary shares to management personnel. On January 18, 2021, the subscriptions receivable from shareholders of US$197,068 was settled. On February 1, 2021, the Company entered into a collaboration and license agreement (the “Exelixis Agreement”) with Exelixis, Inc., pursuant to which the Company agreed to generate masked antibodies with the Company’s SAFEbody technology against an initial target and a second target to be selected by Exelixis. Under the Exelixis Agreement, the Company has received an US$11,000,000 upfront payment. In addition, the Company could be eligible to receive, on a target‑by‑target basis, up to US$127,500,000 in development and regulatory milestone payments upon the achievement of specified development and regulatory milestones and up to US$262,500,000 in sales milestone payments upon the achievement of specified commercial milestones. In the aggregate, the Company could be eligible to receive up to US$255,000,000 in development and regulatory milestone payments and up to US$525,000,000 in sales milestone payments for both targets under the Exelixis Agreement. In addition, the Company are entitled to receive mid‑single‑digit percentage net sales‑based royalties on products developed under the Exelixis Agreement, subject to certain reductions. On February 11, 2021, the Company completed its IPO. At the closing of its IPO, the Company issued 8,457,100 American depositary shares (“ADSs”) at public offering price of US$19.00 per ADS. The number of ADSs issued at closing included the exercise in full of the underwriters’ option to purchase 1,103,100 additional ADSs from the Company. The aggregate gross proceeds from the IPO were approximately US$161 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. Each ADS represents one and one quarter (1.25) ordinary shares of the Company. Upon the completion of the IPO, the Company's then outstanding 5,473,957 Series A-1 Preferred Shares, 2,370,414 Series A-2 Preferred Shares, 7,494,537 Series B Preferred Shares, 5,597,354 Series C-1 Preferred Shares, 1,861,121 Series C-2 Preferred Shares and 4,452,441 Series C-3 Preferred Shares were converted into 5,473,957, 2,370,414, 7,494,537, 5,597,354, 1,861,121 and 4,452,441 ordinary shares, respectively.

CONDENSED FINANCIAL INFORMATION

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY	12 Months Ended
	Dec. 31, 2020
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY	17. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY The Company performed a test on the restricted net assets of consolidated subsidiaries in accordance with Securities and Exchange Commission Regulation S‑X Rule 4‑08 I(3), “General Notes to Financial Statements” and concluded that it was applicable for the Company to disclose the financial statements for the parent company. The subsidiaries did not pay any dividends to the Company for the years presented. For the purpose of presenting parent company only financial information, the Company records its investments in its subsidiaries under the equity method of accounting. Such investments are presented on the separate condensed balance sheets of the Company as “Investments (deficit) in subsidiaries” and the loss of the subsidiaries is presented as “share of losses of subsidiaries”. Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed and omitted. The footnote disclosures contain supplemental information relating to the operations of the Company, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company. The Company did not have significant capital and other commitments, long‑term obligations, other long‑term debt, or guarantees as of December 31, 2019 and 2020. Balance sheets As of December 31, 2019 2020 US$ US$ ASSETS Current assets: Cash and cash equivalents 91,168,159 52,973,889 Short‑term investments 8,000,000 — Amounts due from related parties (a) 6,362,724 27,308,613 Prepayments and other current assets 1,211,891 1,625,197 Total current assets 106,742,774 81,907,699 Investments in subsidiaries 2,507,052 — Other non‑current assets 4,299 3,056,931 TOTAL ASSETS 109,254,125 84,964,630 LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT Current liabilities: Accounts payable 326,762 443,604 Contract liabilities 325,000 112,500 Amounts due to related parties (a) 11,247,674 12,787,321 Accruals and other current liabilities 162,341 3,165,097 Warrant liabilities — — Total current liabilities 12,061,777 16,508,522 Deficit in subsidiaries — 3,396,657 TOTAL LIABILITIES 12,061,777 19,905,179 As of December 31, 2019 2020 US$ US$ LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT (CONTINUED) Mezzanine equity: Series A‑1 convertible redeemable preferred shares (par value of US$0.0001 per share; 5,473,957 and 5,473,957 shares authorized, issued and outstanding as of December 31, 2019 and 2020, respectively) 5,473,957 5,473,957 Series A‑2 convertible redeemable preferred shares (par value of US$0.0001 per share; 2,370,414 and 2,370,414 shares authorized, issued and outstanding as of December 31, 2019 and 2020, respectively) 3,000,000 3,000,000 Series B convertible redeemable preferred shares (par value of US$0.0001 per share; 7,494,537 and 7,494,537 shares authorized, issued and outstanding as of December 31, 2019 and 2020, respectively) 27,999,995 27,999,995 Series C‑1 convertible redeemable preferred shares (par value of US$0.0001 per share; 5,597,354 and 5,597,354 shares authorized, issued and outstanding as of December 31, 2019 and 2020, respectively) 48,727,343 48,975,456 Series C‑2 convertible redeemable preferred shares (par value of US$0.0001 per share; 1,861,121 and 1,861,121 shares authorized, issued and outstanding as of December 31, 2019 and 2020, respectively) 18,999,999 18,999,999 Series C‑3 convertible redeemable preferred shares (par value of US$0.0001 per share; 4,452,441 and 4,452,441 shares authorized, issued and outstanding as of December 31, 2019 and 2020, respectively) 50,000,000 50,000,000 Total mezzanine equity 154,201,294 154,449,407 Shareholders’ deficit: Ordinary shares (par value of US$0.0001 per share; 500,000,000 and 500,000,000 shares authorized; 15,193,136 shares issued and outstanding as of December 31, 2019; 18,888,070 shares issued and 16,603,070 shares outstanding as of December 31, 2020) 1,519 1,889 Subscriptions receivable from shareholders (197,068) (7,172,192) Additional paid‑in capital 6,789,542 23,786,652 Accumulated other comprehensive loss (344,894) (350,981) Accumulated deficit (63,258,045) (105,655,324) Total shareholders’ deficit (57,008,946) (89,389,956) TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT 109,254,125 84,964,630 Statements of comprehensive loss For the years ended December 31, 2018 2019 2020 US$ US$ US$ Revenues Service revenue from a related party (b) — 288,983 398,883 Licensing revenue — — 225,000 Expenses Research and development expenses (15,803,341) (18,318,724) (31,745,136) Third parties (1,810,899) (2,844,722) (9,582,687) Related parties (13,992,442) (15,474,002) (22,162,449) Administrative expenses (556,382) (787,568) (6,092,443) Loss from operations (16,359,723) (18,817,309) (37,213,696) Interest income 691,448 908,981 616,933 Other income, net — — 103,896 Foreign exchange loss, net — (47) 1,616 Change in fair value of warrant liabilities 534,305 1,207,415 — Equity in income (share of losses) of subsidiaries (132,214) 268,652 (5,906,028) Loss before income tax (15,266,184) (16,432,308) (42,397,279) Income tax expense — — — Net loss attributable to Adagene Inc.’s shareholders (15,266,184) (16,432,308) (42,397,279) Other comprehensive income (loss) Foreign currency translation adjustments, net of nil tax (11,288) 65,799 (6,087) Total comprehensive loss attributable to Adagene Inc.’s shareholders (15,277,472) (16,366,509) (42,403,366) Net loss attributable to Adagene Inc.’s shareholders (15,266,184) (16,432,308) (42,397,279) Deemed contribution from convertible redeemable preferred shareholders 1,186,187 — — Accretion of convertible redeemable preferred shares to redemption value (222,846) (246,184) (248,113) Net loss attributable to ordinary shareholders (14,302,843) (16,678,492) (42,645,392) Statements of cash flows For the years ended December 31, 2018 2019 2020 US$ US$ US$ Net cash used in operating activities (16,346,700) (14,521,997) (45,755,914) Third parties (2,919,363) (2,660,397) (26,135,688) Related parties (13,427,337) (11,861,600) (19,620,226) Net cash generated from (used in) investing activities (28,535,658) 25,941,876 7,991,594 Net cash generated from (used in) financing activities 50,018,733 68,999,999 (429,950) Net increase (decrease) in cash and cash equivalents 5,136,375 80,419,878 (38,194,270) Cash and cash equivalents at the beginning of year 5,611,906 10,748,281 91,168,159 Cash and cash equivalents at the end of year 10,748,281 91,168,159 52,973,889 (a) The Company had the following related party balances at the end of the year: As of December 31, 2019 2020 US$ US$ Adagene (Hong Kong) Limited (i) 3,032,766 4,331,082 Adagene Incorporated (i) 2,790,233 7,123,583 Adagene PTE. Ltd (i) — 15,192,454 Adagene AG (i) — 630,719 Adagene Australia PTY Ltd. (i) 22,557 — WuXi AppTec Group 517,168 30,775 Total amounts due from related parties 6,362,724 27,308,613 As of December 31, 2019 2020 US$ US$ Adagene (Suzhou) Limited (ii) 9,126,474 12,743,614 Adagene Incorporated (ii) 1,743,435 — Adagene (Hong Kong) Limited (ii) 13 — WuXi AppTec Group 377,752 43,707 Total amounts due to related parties 11,247,674 12,787,321 (i) As of December 31, 2019 and 2020, the amounts due from Adagene (Hong Kong) Limited, Adagene Incorporated and Adagene Australia PTY Ltd. represented the receivables arising from the expenses paid by the Company on behalf of these subsidiaries. (ii) As of December 31, 2019 and 2020, the amounts due to Adagene (Suzhou) Limited and Adagene Incorporated mainly represented the payables arising from the research and development services provided by these two subsidiaries. (b) For the years ended December 31, 2020, the service revenue from a related party was for Adagene Incorporated, with zero gross margin rate charged.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation	Basis of presentation The accompany consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
Principles of Consolidation	Principles of Consolidation The consolidated financial statements of the Group include the financial statements of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated upon consolidation.
Use of estimates	Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the balance sheet dates and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in the Group’s consolidated financial statements include, but are not limited to, the useful lives and impairment of long‑lived assets, tax valuation allowance, share‑based compensation expenses and the fair value of warrant liabilities. Management bases the estimates on historical experience and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could materially differ from those estimates.
Foreign currency translation	Foreign currency translation The functional currency of the Company, Adagene (Hong Kong) Limited, Adagene Incorporated and Adagene PTE. Ltd. is the United States dollar (“US$”). The functional currency of the Company’s PRC subsidiary is Renminbi (“RMB”). The functional currency of the Company’s Australia subsidiary is Australian dollar (“AU$”). The functional currency of the Company’s Switzerland subsidiary is Swiss Franc (“CHF”). The determination of the respective functional currency is based on the criteria stated in Accounting Standard Codification (“ASC”) 830, Foreign Currency Matters . The Company uses US$ as its reporting currency. The financial statements of the Company’s PRC, Australia and Switzerland subsidiaries are translated from the functional currency to the reporting currency. Transactions denominated in foreign currencies are remeasured into the functional currency at the exchange rates quoted by the People’s Bank of China (the “PBOC”) prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are re‑measured at the exchange rates prevailing at the balance sheet date. Non‑monetary items that are measured in terms of historical costs in foreign currency are re‑measured using the exchange rates at the dates of the initial transactions. Exchange gains and losses are included in the consolidated statements of comprehensive loss. Assets and liabilities are translated at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as accumulated comprehensive loss and are shown as a separate component of other comprehensive loss in the consolidated statements of comprehensive loss.
Cash and cash equivalents	Cash and cash equivalents Cash and cash equivalents primarily consist of cash and demand deposits which are highly liquid. The Group considers highly liquid investments that are readily convertible to known amounts of cash and with original maturities from the date of purchase of three months or less to be cash equivalents. All cash and cash equivalents are unrestricted as to withdrawal and use.
Short-term investments	Short‑term investments Short‑term investments are deposits at bank with maturities of greater than three months, but less than twelve months. Short‑term investments are stated at cost, which approximates fair value. Interest earned is included in interest income.
Accounts receivable and allowance for doubtful accounts	Accounts receivable and allowance for doubtful accounts Account receivable is recorded when the Group has an unconditional right to consideration. A right to consideration is unconditional if only the passage of time is required before payment of that consideration is due. Accounts receivable are carried at net realizable value. An allowance for doubtful accounts is recorded in the period when collection of the amount is no longer probable. In evaluating the collectability of receivable balances, the Group considers specific evidence including the aging of the receivable, the customer’s payment history, its current credit‑worthiness and other factors. Accounts receivable are written off when management determines a balance is uncollectable after all collection efforts have ceased.
Fair value measurements	Fair value measurements The Group applies ASC 820, Fair Value Measurements and Disclosures . ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 requires disclosures to be provided for fair value measurements. ASC 820 establishes a three‑tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Includes other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. The carrying amounts of cash and cash equivalent, short‑term investments, accounts receivable, amounts due to related parties and other current assets, accounts payable, amounts due to related parties, accrued liabilities and other current liabilities and short‑term borrowings approximate their fair values because of their generally short maturities. The carrying amount of long‑term borrowings approximate their fair values since they bear interest rates which approximate market interest rates. As more fully described in Note 8, the Group issued warrants to two Series C-1 preferred shareholders to purchase its preferred shares. The warrants have expired on April 1, 2019. The Group measured its warrant liabilities at fair value on a recurring basis. As the Group’s warrants are not traded in an active market with readily observable prices, the Group uses significant unobservable inputs to measure the fair value of warrant liabilities. These instruments are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. The following table presents a reconciliation of all financial instruments measured at fair value on a recurring basis using Level 3 unobservable inputs: Warrant liabilities US$ Initial recognition during the year ended December 31, 2018 1,741,720 Fair value change (534,305) Balance as of December 31, 2018 1,207,415 Fair value change (1,207,415) Balance as of December 31, 2019 — The Group did not transfer any assets or liabilities in or out of Level 3 during the years ended December 31, 2018, 2019 and 2020. The Group had no financial assets and liabilities measured and recorded at fair value on a nonrecurring basis as of December 31, 2019 and 2020.
Property, equipment and software	Property, equipment and software Property and equipment and software are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight‑line method over the estimated useful lives of the assets as follows: Category Estimated Useful Life Machinery and laboratory equipment 5 years Vehicles 4 years Furniture and tools 3 - 5 years Electronic equipment 3 years Computer software 3 - 5 years Leasehold improvements Lesser of lease terms or estimated useful lives of the assets Repair and maintenance costs are charged to expense as incurred, whereas the cost of renewals and betterments that extend the useful lives of property, equipment and software are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated depreciation and amortization from the asset and accumulated depreciation and amortization accounts with any resulting gain or loss reflected in the consolidated statements of comprehensive loss.
Impairment of long-lived assets	Impairment of long‑lived assets The Group evaluates the recoverability of its long‑lived assets, including fixed assets and intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. When these events occur, the Group measures impairment by comparing the carrying amount of the assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group recognizes an impairment loss based on the excess of the carrying amount of the assets over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available. The adjusted carrying amount of the assets is the new cost basis and is depreciated over the assets’ remaining useful lives. Long‑lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. No impairment loss was recorded for the years ended December 31, 2019 and 2020.
Segment reporting	Segment reporting In accordance with ASC 280, Segment Reporting , the Group’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer. The Group’s CODM reviews the consolidated results of operations when making decisions about allocating resources and assessing performance of the Group. The Group operates and manages it business as a single segment. No geographical segments are presented as substantially all of the Group’s long‑lived assets are located in the PRC.
Revenue recognition	Revenue recognition At contract inception of collaboration and out‑licensing arrangements, the Group analyzes its arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Group first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are reflective of a vendor‑customer relationship and therefore within the scope of ASC 606. For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently. Under the criteria of Accounting Standard Codification (“ASC”) 606, Revenue from Contracts with Customers (Topic 606) (“ASC 606”), the Group recognizes revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. The Group adopted ASC 606 for all periods presented. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Group only applies the five‑step model to contracts when it is probable that the entity will collect substantially all the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. The Group reviews the contract to determine which performance obligations are distinct and represent a promise to provide distinct goods or services or a series of distinct goods or services as defined by the standard. The Group recognizes as revenue the amount of the transaction price that is allocated to each performance obligation as and when that performance obligation is satisfied. Licenses of Intellectual Property: Upfront non‑refundable payments for licensing the Group’s intellectual property are evaluated to determine if the license is distinct from the other performance obligations identified in the arrangement. For licenses determined to be distinct, the Group recognizes revenues from non‑refundable, up‑front fees allocated to the license at a point in time, when the transfer of control of the license to the licensee occurs and the licensee is able to use and benefit from the license. Milestone Payments: At the inception of each arrangement that includes development, commercialization, and regulatory milestone payments, the Group evaluates whether the milestones are considered probable of being reached and to the extent that a significant reversal of cumulative revenue would not occur in future periods, estimates the amount to be included in the transaction price using the most likely amount method. The transaction price is then allocated to each performance obligation on a relative stand‑alone selling price basis, for which the Group recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Group re‑evaluates the probability of achieving such development milestones and any related constraint, and if necessary, adjust the estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch‑up basis, which would affect revenues and earnings in the period of adjustment. Royalties: For arrangements that include sales‑based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Group recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, no milestone payments or royalty payments were received. Substantially all of the Group’s revenue has been derived from its out‑licensing agreements with respect to licensed products such as DNA sequences, cell lines, etc., and such revenues are recognized when the customer obtains control of the licensed product, which occurs at a point in time, upon delivery to the customer. Contract assets and contract liabilities When a customer pays consideration before the Group transfers products or services, the Group records its obligation as a contract liability; When the Group satisfies its performance obligations by providing products or services to a customer before the customer pays consideration and before payment is due, the Group recognizes its rights to consideration as a contract asset.
Research and development expenses	Research and development expenses Elements of research and development expenses primarily include (1) payroll and other related costs of personnel engaged in research and development activities, (2) costs related to pre‑clinical testing of the Group’s technologies under development and clinical trials such as payments to contract research organizations (“CRO”) and contract manufacturing organizations (“CMO”), investigators and clinical trial sites that conduct the clinical studies; (3) costs to develop the product candidates, including raw materials and supplies, product testing, depreciation and amortization, and facility related expenses, (4) other research and development expenses. Research and development expenses are charged to expense as incurred when these expenditures relate to the Group’s research and development services and have no alternative future uses. As of December 31, 2020, the Group has several ongoing clinical studies in various clinical trial stages. The contracts with CRO and CMO are generally cancellable, with notice, at the Group’s option. The Group did not record any accrued expenses related to cancellation of CRO or CMO contracts as of December 31, 2020 as the Group did not have any plan to cancel the existing CRO or CMO contracts.
Government subsidies	Government subsidies Government subsidies primarily consist of financial subsidies received from provincial and local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the governments. The Group’s PRC based subsidiary received government subsidies from certain local government. The Group’s government subsidies consist of specific subsidies and other subsidies. Specific subsidies are subsidies that the local government has set certain conditions for the subsidies. Other subsidies are the subsidies that the local government has not set any conditions and are not tied to future trends or performance of the Group, receipt of such subsidy income is not contingent upon any further actions or performance of the Group and the amounts do not have to be refunded under any circumstances. The Group recorded specific subsidies as other non‑current liabilities when received and recognized as other income when the conditions are met. Other subsidies are recognized as other income upon receipt as further performance by the Group is not required.
Leases	Leases Leases are classified at the inception date as either a capital lease or an operating lease. The Group assesses a lease to be a capital lease if any of the following conditions exists: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are expensed on a straight‑line basis over their respective lease terms. The Group leases certain office space under non‑cancelable operating lease agreements. Certain lease agreements contain rent holidays. Rent holidays are considered in determining the straight‑line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the leased property for purpose of recognizing lease expense on straight‑line basis over the term of the lease.
Comprehensive loss	Comprehensive loss Comprehensive loss is defined as the changes in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Accumulated other comprehensive loss of the Group includes foreign currency translation adjustments related to the Group and its subsidiaries whose functional currency is not US$.
Income taxes	Income taxes The Group follows the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”). Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Group records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax rate. The Group evaluates its uncertain tax positions using the provisions of ASC 740, which prescribes a recognition threshold that a tax position is required to meet before being recognized in the consolidated financial statements. The Group recognizes in the consolidated financial statements the benefit of a tax position which is “more likely than not” to be sustained under examination based solely on the technical merits of the position assuming a review by tax authorities having all relevant information. Tax positions that meet the recognition threshold are measured using a cumulative probability approach, at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. It is the Group’s policy to recognize interest and penalties related to unrecognized tax benefits, if any, as a component of income tax expense.
Borrowings	Borrowings Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the consolidated statements of comprehensive loss over the period of the borrowings using the effective interest method.
Share-based compensation	Share‑based compensation The Company grants restricted shares and stock options to eligible employees and nonemployees and accounts for share-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Share-based compensation awards are measured at the grant date fair value of the awards and recognized as expenses a) immediately at the grant date if no vesting conditions are required; or b) for share-based awards granted with only service conditions, using the straight-line method over the vesting period; or c) for share-based awards granted with service conditions and performance conditions, using the graded vesting method over the vesting period if and when the company concludes that it is probable that the performance conditions will be achieved. A change in any of the terms or conditions of share-based awards is accounted for as a modification of the awards. The Group calculates incremental compensation expense of a modification as the excess of the fair value of the modified awards over the fair value of the original awards immediately before its terms are modified at the modification date. For vested awards, the Group recognizes incremental compensation cost in the period when the modification occurs. For awards not being fully vested, the Group recognizes the sum of the incremental compensation expense and the remaining unrecognized compensation expense for the original awards over the remaining requisite service period after modification.
Net loss per share	Net loss per share In accordance with ASC 260, Earnings Per Share , basic net loss per share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of unrestricted ordinary shares outstanding during the year using the two‑class method. Under the two‑class method, net loss is allocated between ordinary shares and other participating securities based on dividends declared (or accumulated) and participating rights in undistributed earnings as if all the earnings for the reporting period had been distributed. The Company’s convertible redeemable preferred shares are participating securities because they are entitled to receive dividends or distributions on an as converted basis. Diluted net loss per share is calculated by dividing net loss attributable to ordinary shareholders, as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares include ordinary shares issuable upon the conversion of the convertible redeemable preferred shares using the if‑converted method, and ordinary shares issuable upon the exercise of share options, using the treasury stock method. Ordinary share equivalents are excluded from the computation of diluted earnings per share if their effects are anti‑dilutive. For the periods presented herein, the computation of basic net loss per share using the two‑class method is not applicable as the Group is in a net loss position and the participating securities do not have contractual rights and obligations to share in the losses of the Group.
Employee defined contribution plan	Employee defined contribution plan As stipulated by the regulations of the PRC, full‑time employees of the Group are entitled to staff welfare benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a PRC government‑mandated multi‑employer defined contribution plan. The Group is required to accrue for these benefits based on certain percentages of the qualified employees’ salaries. The Group is required to make contributions to the plans out of the amounts accrued. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Group’s obligations are limited to the amounts contributed. The Group has no further payment obligations once the contributions have been paid. The Group recorded employee benefit expenses of US$1,145,165 and US$622,377 for the years ended December 31, 2019 and 2020, respectively.
Concentration of risks	Concentration of risks Concentration of credit risk As of December 31, 2019 and 2020, the aggregate amount of cash and cash equivalents and short‑term investments of US$801,923 and US$3,424,456 respectively, were held at major financial institutions located in the mainland of China, and US$99,730,865 and US$71,726,542, respectively, were deposited with major financial institutions located outside the mainland of China. Management believes that these financial institutions are of high credit quality and continually monitors the credit worthiness of these financial institutions. Accounts receivable are typically unsecured and denominated in US$ and are derived from revenues earned from customers. The Group manages credit risk of accounts receivable through ongoing monitoring of the outstanding balances. Concentration of suppliers A significant portion of the Group’s research and development services were purchased from its one supplier, who collectively accounted for 23.13% and 21.51% of the Group’s total research and development services purchases for the years ended December 31, 2019 and 2020, respectively. Business and economic risk The Group believes that changes in any of the following areas could have a material adverse effect on the Group’s future consolidated financial position, results of operations or cash flows: changes in the overall demand for services; competitive pressures due to new entrants; advances and new trends in new technologies and industry standards; changes in certain strategic relationships; regulatory considerations and risks associated with the Group’s ability to attract employees necessary to support its growth. The Group’s operations could also be adversely affected by significant political, regulatory, economic and social uncertainties in the PRC. Foreign currency exchange rate risk A significant portion of the Group’s businesses are transacted in RMB, which is not a freely convertible currency. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China (the “PBOC”). However, the unification of the exchange rates does not imply that the RMB may be readily convertible into US$ or other foreign currencies. All foreign exchange transactions continue to take place either through the PBOC or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC. Approval of foreign currency payments by the PBOC or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. From July 21, 2005, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. For U.S. dollar against RMB, there was appreciation and depreciation of approximately 1.3% and 6.5% in the years ended December 31, 2019 and 2020, respectively. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The functional currency and the reporting currency of the Company are the US$. However, large portion of the expenses of the Group are denominated in RMB. Any significant fluctuation of the valuation of RMB may materially affect the Group’s cash flows, expenses, losses and financial position, and the value of any dividends payable on the American Depositary Shares in US$.
Recently issued accounting pronouncements	Recently issued accounting pronouncements The Group is an emerging growth company (“EGC”) as defined by the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an EGC can take advantage of extended transition periods for complying with new or revised accounting standards. This allows an EGC to delay adoption of certain accounting standards until those standards would otherwise apply to private companies. The Group elected to take advantage of the extended transition periods. However, this election will not apply should the Group cease to be classified as an EGC. In February 2016, the FASB issued ASU No. 2016‑02 (“ASU 2016‑02”), Leases (Topic 842), which modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. In July 2018, the FASB issued ASU No. 2018‑10 (“ASU 2018‑10”), Codification Improvements to Topic 842, Leases, which clarifies certain aspects of the guidance issued in ASU 2016‑02; and ASU No. 2018‑11 (“ASU 2018‑11”), Leases (Topic 842): Targeted Improvements, which provides entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative‑effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP (Topic 840, Leases). Further, the FASB issued ASU No. 2020-05 (“ASU 2020-05”), Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, which extends the adoption date for certain entities. For the Group, the updated guidance is effective for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Group does not plan to early adopt the new lease standards and the Group expects that applying the ASU 2016‑02 would materially increase the assets and liabilities due to the recognition of right‑of‑use assets and lease liabilities on its consolidated balance sheets, with an immaterial impact on its consolidated statements of comprehensive loss and consolidated statements of cash flows. In June 2016, the FASB issued ASU No. 2016‑13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016‑13”). ASU 2016‑13 is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of the Group’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. In November 2019, the FASB issued ASU 2019‑10, which extends the adoption date for certain registrants. The amendments in ASU 2016‑13 are effective for fiscal years beginning after December 15, 2022, including interim periods within fiscal years beginning after December 15, 2023. The Group does not plan to early adopt ASU 2016‑13 and is currently in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements. In June 2018, the FASB issued ASU No. 2018‑07, Compensation—Stock Compensation (Topic 718): Improvements to nonemployee share‑based payment accounting (“ASU 2018‑07”). The amendments in this update expand the scope of Topic 718 to include share‑based payment transactions for acquiring goods and services from nonemployees. The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Group adopted on January 1, 2018 this guidance which do not have a significant impact on the consolidated financial statements. In August 2018, the FASB issued ASU No. 2018‑13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018‑13”). ASU 2018‑13 modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The amendments in ASU 2018‑13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of ASU 2018‑13. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU 2018‑13 and delay adoption of the additional disclosures until their effective date. The Group elected to early adopt this ASU and applied this guidance retrospectively to all periods presented. The impact of this ASU to the consolidated financial statements is immaterial. In November 2018, the FASB issued ASU 2018‑18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. This update clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer and precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. The update is effective in fiscal years beginning after December 15, 2021, and interim periods therein, and early adoption is permitted for entities that have adopted ASC 606. This guidance should be applied retrospectively to the date of initial application of Topic 606. The Group elected to early adopt this ASU and applied this guidance retrospectively to all periods presented. The impact of this ASU to the consolidated financial statements is immaterial. In December 2019, the FASB issued ASU 2019‑12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This update simplifies the accounting for income taxes as part of the FASB’s overall initiative to reduce complexity in accounting standards. The amendments include removal of certain exceptions to the general principles of ASC 740, Income taxes , and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. The update is effective in fiscal years beginning after December 15, 2022, and interim periods therein, and early adoption is permitted. Certain amendments in this update should be applied retrospectively or modified retrospectively, all other amendments should be applied prospectively. The Group does not plan to early adopt ASU 2019‑12 and is currently evaluating the impact on its financial statements of adopting this guidance. In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for convertible instruments by removing certain separation models in Subtopic 470-20, Debt-Debt with Conversion and Other Options, for convertible instruments and also increases information transparency by making disclosure amendments. The standard is effective for private companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently evaluating the impact of this accounting standard update on its condensed consolidated financial statements.

ORGANIZATION AND BASIS OF PRE_2

ORGANIZATION AND BASIS OF PRESENTATION (Tables)	12 Months Ended
	Dec. 31, 2020
ORGANIZATION AND BASIS OF PRESENTATION
Summary of principal subsidiaries	Percentage of legal Date of Place of ownership Entity incorporation incorporation by the Company Principal activities Adagene (Hong Kong) Limited December 12, 2011 Hong Kong 100 % Investment holding Adagene Incorporated September 20, 2017 The United States of America 100 % Research and development of innovative medicines Adagene (Suzhou) Limited February 28, 2012 The People’s Republic of China (“PRC” or “China”) 100 % Research and development of innovative medicines Adagene Australia PTY Ltd. May 30, 2018 Australia 100 % Research and development of innovative medicines Adagene PTE. Ltd. March 27, 2020 Singapore 100 % Research and development of innovative medicines Adagene AG August 31, 2020 Switzerland 100 % Research and development of innovative medicines

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Summary of reconciliation of all financial instruments measured at fair value on a recurring basis using Level 3 unobservable inputs	Warrant liabilities US$ Initial recognition during the year ended December 31, 2018 1,741,720 Fair value change (534,305) Balance as of December 31, 2018 1,207,415 Fair value change (1,207,415) Balance as of December 31, 2019 —
Summary of estimated useful lives of property, equipment and software	Category Estimated Useful Life Machinery and laboratory equipment 5 years Vehicles 4 years Furniture and tools 3 - 5 years Electronic equipment 3 years Computer software 3 - 5 years Leasehold improvements Lesser of lease terms or estimated useful lives of the assets

ACCOUNTS RECEIVABLE, NET (Table

ACCOUNTS RECEIVABLE, NET (Tables)	12 Months Ended
	Dec. 31, 2020
ACCOUNTS RECEIVABLE, NET
Summary of accounts receivable	As of December 31, 2019 2020 US$ US$ Accounts receivable 480,000 — Allowance for doubtful accounts — — 480,000 —

PREPAYMENTS AND OTHER CURRENT_2

PREPAYMENTS AND OTHER CURRENT ASSETS (Tables)	12 Months Ended
	Dec. 31, 2020
PREPAYMENTS AND OTHER CURRENT ASSETS
Summary of prepayments and other current assets	As of December 31, 2019 2020 US$ US$ Prepayments 211,435 1,907,781 Deposits(a) 970,394 1,646,446 Interest receivables 227,278 — Others 67,866 259,757 1,476,973 3,813,984 Note (a): The deposits represented the amounts that the Group paid to its CRO vendors for various outsourced research and development programs according to the terms of respective CRO agreement. The Group expects to recover the deposits if the program fails or the contract is cancelled.

PROPERTY, EQUIPMENT AND SOFTW_2

PROPERTY, EQUIPMENT AND SOFTWARE (Tables)	12 Months Ended
	Dec. 31, 2020
PROPERTY, EQUIPMENT AND SOFTWARE
Summary of property, equipment and software	As of December 31, 2019 2020 US$ US$ Machinery and laboratory equipment 3,462,343 4,150,822 Leasehold improvements 767,205 915,208 Electronic equipment 605,882 962,684 Furniture and tools 98,396 106,492 Vehicles 80,133 126,764 Software 71,056 95,586 Total property, equipment and software 5,085,015 6,357,556 Less: accumulated depreciation and amortization (3,205,690) (4,290,431) Net book value 1,879,325 2,067,125

ACCRUALS AND OTHER CURRENT LI_2

ACCRUALS AND OTHER CURRENT LIABILITIES (Tables)	12 Months Ended
	Dec. 31, 2020
ACCRUALS AND OTHER CURRENT LIABILITIES
Summary of accrued liabilities and other current liabilities	As of December 31, 2019 2020 US$ US$ Professional service fees 145,157 3,459,430 Payroll and related liabilities 2,370,523 2,390,025 Utility and maintenance 4,595 459 Other taxes and surcharge — 63,919 Others 19,889 145,664 2,540,164 6,059,497

BORROWINGS (Tables)

BORROWINGS (Tables)	12 Months Ended
	Dec. 31, 2020
BORROWINGS
Schedule of borrowings	As of December 31, 2019 2020 US$ US$ Current Short‑term borrowings: Bank loans 716,723 3,831,476 Current portion of long‑term borrowings 322,525 1,183,926 Total current borrowings 1,039,248 5,015,402 Non‑Current Long‑term borrowings: Bank loans 1,515,868 2,965,563 Total non‑current borrowings 1,515,868 2,965,563 Total borrowings 2,555,116 7,980,965
Schedule of future maturities of short-term borrowings and long-term borrowings	Future principal maturities of short‑term borrowings and long‑term borrowings as of December 31, 2020 are as followings: US$ 2021 5,015,402 2022 1,279,713 2023 1,685,850 7,980,965

CONVERTIBLE REDEEMABLE PREFER_2

CONVERTIBLE REDEEMABLE PREFERRED SHARES AND WARRANTS (Tables)	12 Months Ended
	Dec. 31, 2020
CONVERTIBLE REDEEMABLE PREFERRED SHARES AND WARRANTS
Schedule of Company's Preferred Shares activities	Mezzanine equity Series A‑1 Series A‑2 Series B Series C‑1 Series C‑2 Series C‑3 Total US$ US$ US$ US$ US$ US$ US$ Balance as of December 31, 2017 5,473,957 3,000,000 27,999,995 — — — 36,473,952 Issuance of Series C‑1 Preferred Shares — — — 48,258,313 — — 48,258,313 Accretion of Series C‑1 Preferred Shares to redemption value — — — 222,846 — — 222,846 Balance as of December 31, 2018 5,473,957 3,000,000 27,999,995 48,481,159 — — 84,955,111 Issuance of Series C‑2 Preferred Shares — — — — 18,999,999 — 18,999,999 Issuance of Series C‑3 Preferred Shares — — — — — 50,000,000 50,000,000 Accretion of Series C‑1 Preferred Shares to redemption value — — — 246,184 — — 246,184 Balance as of December 31, 2019 5,473,957 3,000,000 27,999,995 48,727,343 18,999,999 50,000,000 154,201,294 Accretion of Series C‑1 Preferred Shares to redemption value — — — 248,113 — — 248,113 Balance as of December 31, 2020 5,473,957 3,000,000 27,999,995 48,975,456 18,999,999 50,000,000 154,449,407
Schedule of assumptions used in estimating the fair value of warrant liabilities	For the year ended December 31, 2018 Risk‑free interest rate 1.92%, 2.37% Exercise price US$10.2089 Maturity date 01/04/2019 Estimated volatility rate 63.78%, 71.00%

SHARE-BASED COMPENSATION (Table

SHARE-BASED COMPENSATION (Tables)	12 Months Ended
	Dec. 31, 2020
SHARE-BASED COMPENSATION
Summary of stock option activity	Weighted Weighted‑ Weighted‑ Average Average Average Remaining Aggregate Number of Exercise Grant Date Contractual Intrinsic Options Price Fair Value Term Value US$ per US$ per option option Years US$ Outstanding at January 1, 2018 848,828 0.38 3.75 8.56 4,907,569 Forfeited (274,500) 0.55 5.71 — — Outstanding at January 1, 2019 574,328 0.30 2.80 7.14 3,734,644 Granted 372,500 1.26 5.46 — — Exercised (34,000) 0.55 5.71 — — Forfeited (46,800) 1.22 5.75 — — Outstanding at December 31, 2019 866,028 0.65 3.67 7.27 6,328,171 Granted 6,313,373 2.00 7.01 — — Exercised (3,694,934) 1.93 6.55 — — Forfeited (190,000) 1.70 6.91 — — Outstanding at December 31, 2020 3,294,467 1.75 6.65 8.78 33,410,968 Vested and expected to vest at December 31, 2020 3,294,467 1.75 6.65 8.78 33,410,968 Exercisable at December 31, 2020 393,424 0.75 4.46 6.68 4,859,836
Summary of assumptions used to estimate the fair value of the share options granted	For the year For the year ended ended December 31, December 31, 2019 2020 Risk‑free interest rate 1.78% - 2.73% 0.68% - 0.83% Dividend yield 0% 0% Expected volatility range 67.5% - 71.0% 72.3% - 73.4% Exercise multiple 2.2 - 2.8 2.2 - 2.8 Contractual life 10 years 10 years
Summary of total share based compensation expenses recognized	For the years ended December 31, 2018 2019 2020 US$ US$ US$ Research and development expenses 126,540 404,620 6,472,083 Administrative expenses — 207,091 3,657,458 Total share‑based compensation expenses 126,540 611,711 10,129,541

INCOME TAX EXPENSE (Tables)

INCOME TAX EXPENSE (Tables)	12 Months Ended
	Dec. 31, 2020
INCOME TAX EXPENSE
Schedule of reconciliation between the income tax expense and the actual provision	For the years ended December 31, 2018 2019 2020 US$ US$ US$ Loss before income tax (15,266,184) (16,432,308) (42,397,279) Income tax computed at respective applicable tax rate (30,560) 27,875 (1,073,105) Research and development super‑deduction (a) (579,090) (230,126) (718,979) Non‑deductible expenses 4,010 3,306 1,238 Changes in valuation allowance 605,640 198,945 1,790,846 Income tax expense — — — Note (a): Due to the impacts of research and development super‑deduction, the Group’s subsidiary, Adagene (Suzhou) Limited did not have any taxable profit for the years ended December 31, 2018, 2019 and 2020.
Schedule of tax effects of temporary differences that give rise to the deferred tax balances	For the years ended December 31, 2018 2019 2020 US$ US$ US$ Deferred tax assets: Net operating loss carry forward 735,717 928,989 1,504,966 Depreciation and amortization of property, equipment and software 4,213 9,886 7,428 Gross deferred tax assets 739,930 938,875 1,512,394 Less: valuation allowance (739,930) (938,875) (1,512,394) Total deferred tax assets, net — — —
Schedule of movement of the valuation allowance	For the years ended December 31, 2018 2019 2020 US$ US$ US$ Balance as of January 1 134,290 739,930 938,875 Addition 605,640 198,945 573,519 Balance as of December 31 739,930 938,875 1,512,394

NET LOSS PER SHARE (Tables)

NET LOSS PER SHARE (Tables)	12 Months Ended
	Dec. 31, 2020
NET LOSS PER SHARE
Schedule of basic and diluted net loss per share	For the years ended December 31, 2018 2019 2020 US$ US$ US$ Numerator: Net loss attributable to Adagene Inc.’s shareholders (15,266,184) (16,432,308) (42,397,279) Deemed contribution from convertible redeemable preferred shareholders 1,186,187 — — Accretion of convertible redeemable preferred shares to redemption value (222,846) (246,184) (248,113) Net loss attributable to ordinary shareholders (14,302,843) (16,678,492) (42,645,392) Denominator: Weighted‑average number of ordinary shares outstanding—basic and diluted 15,159,136 15,178,232 15,950,698 Net Loss per share—basic and diluted (0.94) (1.10) (2.67)
Schedule of potentially dilutive securities that are not included in the calculation of diluted net loss per share	For the years ended December 31, 2018 2019 2020 Convertible redeemable preferred shares 20,430,200 21,977,914 27,249,824 Share options 293,133 582,526 1,795,932

RELATED PARTY TRANSACTIONS (Tab

RELATED PARTY TRANSACTIONS (Tables)	12 Months Ended
	Dec. 31, 2020
RELATED PARTY TRANSACTIONS
Schedule of related party transactions	a) Related Parties Name of related parties Relationship Peter Luo Chairman, Chief Executive Officer and a principal shareholder of the Company Four senior management personnel Management and ordinary shareholders of the Company WuXi AppTec Co., Ltd. (“WuXi AppTec Group”) A principal shareholder of the Group WuXi Biologics (Shanghai) Co., Ltd. Controlled by the ultimate controlling party of a principal shareholder of the Group b) The Group had the following related party balances at the end of the year: As of December 31, 2019 2020 US$ US$ WuXi AppTec Group 739,051 124,704 Four senior management personnel(i) 350,865 — Peter Luo(i) 338,818 — WuXi Biologics (Shanghai) Co., Ltd. 4,452 7,692 Total amounts due from related parties 1,433,186 132,396 As of December 31, 2019 2020 US$ US$ WuXi Biologics (Shanghai) Co., Ltd. 1,379,741 2,361,503 WuXi AppTec Group 432,784 173,855 Peter Luo(ii) 83,254 — Total amounts due to related parties 1,895,779 2,535,358 c) The Group had the following related party transactions: For the years ended December 31, 2018 2019 2020 US$ US$ US$ Receipt of CRO and CMO services: WuXi Biologics (Shanghai) Co., Ltd. 6,535,512 3,567,962 7,217,709 WuXi AppTec Group 969,079 2,136,344 2,674,586 7,504,591 5,704,306 9,892,295 (i) In October and November 2017, Peter Luo and other four senior management personnel elected to exercise the vested share options that granted under 2015 Plan. As of December 31, 2018, the balance of amounts due from Peter Luo and other four senior management personnel represented the receivables arising from the exercise of share options and related withholding individual income tax amounts. The receivables arising from the exercise of share options were subsequently received in the year ended December 31, 2019. As of December 31, 2019, the balance of amounts due from Peter Luo and other four senior management personnel represented withholding individual income tax amounts. (ii) As of December 31, 2019, the balance of amounts due to Peter Luo represented the Group’s receipt of personal subsidy on behalf of Peter Luo, which was subsequently remitted to Peter Luo in May 2020.

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	12 Months Ended
	Dec. 31, 2020
COMMITMENTS AND CONTINGENCIES
Schedule of future minimum payments under non-cancelable operating leases	Future minimum payments under non‑cancelable operating leases with initial terms in excess of one year consist of the following as of December 31, 2020: US$ For the years ending: 2021 306,311 2022 240,530 2023 129,555 Total 676,396

CONDENSED FINANCIAL INFORMATI_2

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Tables) - Parent Company	12 Months Ended
	Dec. 31, 2020
Condensed Financial Statements, Captions [Line Items]
Schedule of Balance sheets	As of December 31, 2019 2020 US$ US$ ASSETS Current assets: Cash and cash equivalents 91,168,159 52,973,889 Short‑term investments 8,000,000 — Amounts due from related parties (a) 6,362,724 27,308,613 Prepayments and other current assets 1,211,891 1,625,197 Total current assets 106,742,774 81,907,699 Investments in subsidiaries 2,507,052 — Other non‑current assets 4,299 3,056,931 TOTAL ASSETS 109,254,125 84,964,630 LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT Current liabilities: Accounts payable 326,762 443,604 Contract liabilities 325,000 112,500 Amounts due to related parties (a) 11,247,674 12,787,321 Accruals and other current liabilities 162,341 3,165,097 Warrant liabilities — — Total current liabilities 12,061,777 16,508,522 Deficit in subsidiaries — 3,396,657 TOTAL LIABILITIES 12,061,777 19,905,179 As of December 31, 2019 2020 US$ US$ LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT (CONTINUED) Mezzanine equity: Series A‑1 convertible redeemable preferred shares (par value of US$0.0001 per share; 5,473,957 and 5,473,957 shares authorized, issued and outstanding as of December 31, 2019 and 2020, respectively) 5,473,957 5,473,957 Series A‑2 convertible redeemable preferred shares (par value of US$0.0001 per share; 2,370,414 and 2,370,414 shares authorized, issued and outstanding as of December 31, 2019 and 2020, respectively) 3,000,000 3,000,000 Series B convertible redeemable preferred shares (par value of US$0.0001 per share; 7,494,537 and 7,494,537 shares authorized, issued and outstanding as of December 31, 2019 and 2020, respectively) 27,999,995 27,999,995 Series C‑1 convertible redeemable preferred shares (par value of US$0.0001 per share; 5,597,354 and 5,597,354 shares authorized, issued and outstanding as of December 31, 2019 and 2020, respectively) 48,727,343 48,975,456 Series C‑2 convertible redeemable preferred shares (par value of US$0.0001 per share; 1,861,121 and 1,861,121 shares authorized, issued and outstanding as of December 31, 2019 and 2020, respectively) 18,999,999 18,999,999 Series C‑3 convertible redeemable preferred shares (par value of US$0.0001 per share; 4,452,441 and 4,452,441 shares authorized, issued and outstanding as of December 31, 2019 and 2020, respectively) 50,000,000 50,000,000 Total mezzanine equity 154,201,294 154,449,407 Shareholders’ deficit: Ordinary shares (par value of US$0.0001 per share; 500,000,000 and 500,000,000 shares authorized; 15,193,136 shares issued and outstanding as of December 31, 2019; 18,888,070 shares issued and 16,603,070 shares outstanding as of December 31, 2020) 1,519 1,889 Subscriptions receivable from shareholders (197,068) (7,172,192) Additional paid‑in capital 6,789,542 23,786,652 Accumulated other comprehensive loss (344,894) (350,981) Accumulated deficit (63,258,045) (105,655,324) Total shareholders’ deficit (57,008,946) (89,389,956) TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT 109,254,125 84,964,630 (a) The Company had the following related party balances at the end of the year: As of December 31, 2019 2020 US$ US$ Adagene (Hong Kong) Limited (i) 3,032,766 4,331,082 Adagene Incorporated (i) 2,790,233 7,123,583 Adagene PTE. Ltd (i) — 15,192,454 Adagene AG (i) — 630,719 Adagene Australia PTY Ltd. (i) 22,557 — WuXi AppTec Group 517,168 30,775 Total amounts due from related parties 6,362,724 27,308,613 As of December 31, 2019 2020 US$ US$ Adagene (Suzhou) Limited (ii) 9,126,474 12,743,614 Adagene Incorporated (ii) 1,743,435 — Adagene (Hong Kong) Limited (ii) 13 — WuXi AppTec Group 377,752 43,707 Total amounts due to related parties 11,247,674 12,787,321 (i) As of December 31, 2019 and 2020, the amounts due from Adagene (Hong Kong) Limited, Adagene Incorporated and Adagene Australia PTY Ltd. represented the receivables arising from the expenses paid by the Company on behalf of these subsidiaries. (ii) As of December 31, 2019 and 2020, the amounts due to Adagene (Suzhou) Limited and Adagene Incorporated mainly represented the payables arising from the research and development services provided by these two subsidiaries.
Schedule of Statements of comprehensive loss	For the years ended December 31, 2018 2019 2020 US$ US$ US$ Revenues Service revenue from a related party (b) — 288,983 398,883 Licensing revenue — — 225,000 Expenses Research and development expenses (15,803,341) (18,318,724) (31,745,136) Third parties (1,810,899) (2,844,722) (9,582,687) Related parties (13,992,442) (15,474,002) (22,162,449) Administrative expenses (556,382) (787,568) (6,092,443) Loss from operations (16,359,723) (18,817,309) (37,213,696) Interest income 691,448 908,981 616,933 Other income, net — — 103,896 Foreign exchange loss, net — (47) 1,616 Change in fair value of warrant liabilities 534,305 1,207,415 — Equity in income (share of losses) of subsidiaries (132,214) 268,652 (5,906,028) Loss before income tax (15,266,184) (16,432,308) (42,397,279) Income tax expense — — — Net loss attributable to Adagene Inc.’s shareholders (15,266,184) (16,432,308) (42,397,279) Other comprehensive income (loss) Foreign currency translation adjustments, net of nil tax (11,288) 65,799 (6,087) Total comprehensive loss attributable to Adagene Inc.’s shareholders (15,277,472) (16,366,509) (42,403,366) Net loss attributable to Adagene Inc.’s shareholders (15,266,184) (16,432,308) (42,397,279) Deemed contribution from convertible redeemable preferred shareholders 1,186,187 — — Accretion of convertible redeemable preferred shares to redemption value (222,846) (246,184) (248,113) Net loss attributable to ordinary shareholders (14,302,843) (16,678,492) (42,645,392) (b) For the years ended December 31, 2020, the service revenue from a related party was for Adagene Incorporated, with zero gross margin rate charged.
Schedule of Statements of cash flows	For the years ended December 31, 2018 2019 2020 US$ US$ US$ Net cash used in operating activities (16,346,700) (14,521,997) (45,755,914) Third parties (2,919,363) (2,660,397) (26,135,688) Related parties (13,427,337) (11,861,600) (19,620,226) Net cash generated from (used in) investing activities (28,535,658) 25,941,876 7,991,594 Net cash generated from (used in) financing activities 50,018,733 68,999,999 (429,950) Net increase (decrease) in cash and cash equivalents 5,136,375 80,419,878 (38,194,270) Cash and cash equivalents at the beginning of year 5,611,906 10,748,281 91,168,159 Cash and cash equivalents at the end of year 10,748,281 91,168,159 52,973,889

ORGANIZATION AND BASIS OF PRE_3

ORGANIZATION AND BASIS OF PRESENTATION (Details)	Dec. 31, 2020
Adagene (Hong Kong) Limited
ORGANIZATION AND BASIS OF PRESENTATION
Percentage of legal ownership by the Company	100.00%
Adagene Incorporated
ORGANIZATION AND BASIS OF PRESENTATION
Percentage of legal ownership by the Company	100.00%
Adagene (Suzhou) Limited
ORGANIZATION AND BASIS OF PRESENTATION
Percentage of legal ownership by the Company	100.00%
Adagene Australia PTY Ltd.
ORGANIZATION AND BASIS OF PRESENTATION
Percentage of legal ownership by the Company	100.00%
Adagene PTE. Ltd.
ORGANIZATION AND BASIS OF PRESENTATION
Percentage of legal ownership by the Company	100.00%
Adagene AG
ORGANIZATION AND BASIS OF PRESENTATION
Percentage of legal ownership by the Company	100.00%

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	1 Months Ended		12 Months Ended
	Feb. 28, 2018shareholder	Feb. 28, 2018item	Dec. 31, 2019USD ($)	Dec. 31, 2018USD ($)
Series C-1 convertible redeemable preferred shares
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Number of Series C-1 shareholders to whom warrants were issued	2	2
Warrant liabilities | Fair Value, Inputs, Level 3 | Recurring
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at the beginning			$ 1,207,415
Initial recognition during the year ended December 31, 2018				$ 1,741,720
Fair value change			$ (1,207,415)	(534,305)
Balance at the end				$ 1,207,415

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nonrecurring (Details) - Nonrecurring basis - USD ($)	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items}
Financial assets and liabilities	$ 0	$ 0	$ 0
Financial assets	0	0
Financial liabilities	$ 0	$ 0

SUMMARY OF SIGNIFICANT ACCOUN_6

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, equipment and software (Details)	12 Months Ended
	Dec. 31, 2020
Machinery and laboratory equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Life	5 years
Vehicles
Property, Plant and Equipment [Line Items]
Estimated Useful Life	4 years
Furniture and tools | Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Life	3 years
Furniture and tools | Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Life	5 years
Electronic equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Life	3 years
Software | Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Life	3 years
Software | Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Life	5 years

SUMMARY OF SIGNIFICANT ACCOUN_7

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment of long lived assets to Employee defined contribution plan (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Impairment of long lived assets
Impairment loss	$ 0	$ 0
Revenue recognition
Milestone payments or royalty payments received	0
Employee defined contribution plan
Employee benefit expenses	$ 622,377	$ 1,145,165

SUMMARY OF SIGNIFICANT ACCOUN_8

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of credit risk (Details)	12 Months Ended
	Dec. 31, 2020USD ($)item	Dec. 31, 2019USD ($)item
Concentration of credit risk | Cash and cash equivalents and short-term investments | Mainland of China
Concentration Risk [Line Items]
Cash, Cash Equivalents, and Short-term Investments	$ 3,424,456	$ 801,923
Concentration of credit risk | Cash and cash equivalents and short-term investments | Outside the mainland of China
Concentration Risk [Line Items]
Cash, Cash Equivalents, and Short-term Investments	$ 71,726,542	$ 99,730,865
Concentration of suppliers | Research and development services purchased
Concentration Risk [Line Items]
Number of major supplier | item	1	1
Concentration of suppliers | Research and development services purchased | One supplier
Concentration Risk [Line Items]
Concentration risk percentage	21.51%	23.13%

SUMMARY OF SIGNIFICANT ACCOUN_9

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign currency exchange rate risk (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Appreciation of foreign currency (as a percent)		1.30%
Depreciation of foreign currency (as a percent)	6.50%

ACCOUNTS RECEIVABLE, NET (Detai

ACCOUNTS RECEIVABLE, NET (Details)	Dec. 31, 2019USD ($)
ACCOUNTS RECEIVABLE, NET
Accounts receivable	$ 480,000
Accounts receivable, net	$ 480,000

PREPAYMENTS AND OTHER CURRENT_3

PREPAYMENTS AND OTHER CURRENT ASSETS (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
PREPAYMENTS AND OTHER CURRENT ASSETS
Prepayments	$ 1,907,781	$ 211,435
Deposits	1,646,446	970,394
Interest receivables		227,278
Others	259,757	67,866
Prepayments and other current assets	$ 3,813,984	$ 1,476,973

PROPERTY, EQUIPMENT AND SOFTW_3

PROPERTY, EQUIPMENT AND SOFTWARE (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment, Net, by Type [Abstract]
Total property, equipment and software	$ 6,357,556	$ 5,085,015
Less: accumulated depreciation and amortization	(4,290,431)	(3,205,690)
Net book value	2,067,125	1,879,325
Depreciation and amortization	858,408	816,686	$ 909,002
Machinery and laboratory equipment
Property, Plant and Equipment, Net, by Type [Abstract]
Total property, equipment and software	4,150,822	3,462,343
Leasehold improvements
Property, Plant and Equipment, Net, by Type [Abstract]
Total property, equipment and software	915,208	767,205
Electronic equipment
Property, Plant and Equipment, Net, by Type [Abstract]
Total property, equipment and software	962,684	605,882
Furniture and tools
Property, Plant and Equipment, Net, by Type [Abstract]
Total property, equipment and software	106,492	98,396
Vehicles
Property, Plant and Equipment, Net, by Type [Abstract]
Total property, equipment and software	126,764	80,133
Software
Property, Plant and Equipment, Net, by Type [Abstract]
Total property, equipment and software	$ 95,586	$ 71,056

ACCRUALS AND OTHER CURRENT LI_3

ACCRUALS AND OTHER CURRENT LIABILITIES (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
ACCRUALS AND OTHER CURRENT LIABILITIES
Professional service fees	$ 3,459,430	$ 145,157
Payroll and related liabilities	2,390,025	2,370,523
Utility and maintenance	459	4,595
Other taxes and surcharge	63,919
Others	145,664	19,889
Accruals and other current liabilities	$ 6,059,497	$ 2,540,164

BORROWINGS - Components (Detail

BORROWINGS - Components (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Short term borrowings:
Bank loans	$ 3,831,476	$ 716,723
Current portion of long term borrowings	1,183,926	322,525
Total current borrowings	5,015,402	1,039,248
Long term borrowings:
Bank loans	2,965,563	1,515,868
Total non current borrowings	2,965,563	1,515,868
Total borrowings	$ 7,980,965	$ 2,555,116

BORROWINGS - Short term borrowi

BORROWINGS - Short term borrowings (Details)	1 Months Ended
	Nov. 30, 2020CNY (¥)	Sep. 30, 2020CNY (¥)	Jun. 30, 2020CNY (¥)	Sep. 30, 2019CNY (¥)	Jul. 31, 2018CNY (¥)	Jun. 30, 2018CNY (¥)	May 31, 2018CNY (¥)	Mar. 31, 2018CNY (¥)	Nov. 30, 2020USD ($)	Sep. 30, 2020USD ($)	Jun. 30, 2020USD ($)	Sep. 30, 2019USD ($)	Jul. 31, 2018USD ($)	Jun. 30, 2018USD ($)	May 31, 2018USD ($)	Mar. 31, 2018USD ($)
Borrowings from Bank of Jiangsu Co., Ltd
Short-term Debt [Line Items]
Amount borrowed						¥ 2,000,000		¥ 3,000,000						$ 291,409		$ 437,114
Term of the debt						1 year		1 year
Interest rate (as a percent)						5.22%		5.22%						5.22%		5.22%
Borrowings from Bank of Ningbo Co., Ltd
Short-term Debt [Line Items]
Amount borrowed		¥ 5,000,000		¥ 5,000,000		¥ 2,000,000	¥ 3,000,000			$ 766,295.27		$ 766,295.27		$ 291,409	$ 437,114
Term of the debt		1 year		1 year		1 year	1 year
Interest rate (as a percent)		4.20%		4.35%		5.00%	5.00%			4.20%		4.35%		5.00%	5.00%
Borrowings from Agricultural Bank of China Limited
Short-term Debt [Line Items]
Amount borrowed			¥ 10,000,000		¥ 6,000,000						$ 1,532,590.54		$ 874,228
Term of the debt			1 year		1 year
Interest rate (as a percent)			4.20%		5.22%						4.20%		5.22%
China Merchants Bank Co., Ltd
Short-term Debt [Line Items]
Amount borrowed	¥ 5,000,000								$ 766,295.27
Term of the debt	1 year
Interest rate (as a percent)	4.10%								4.10%
China Merchants Bank Co., Ltd., two
Short-term Debt [Line Items]
Amount borrowed	¥ 5,000,000								$ 766,295.27
Term of the debt	1 year
Interest rate (as a percent)	4.10%								4.10%

BORROWINGS - Long term borrowin

BORROWINGS - Long term borrowings (Details)	1 Months Ended						12 Months Ended
	Dec. 31, 2020CNY (¥)	Dec. 31, 2020USD ($)	Dec. 31, 2019CNY (¥)	Dec. 31, 2019USD ($)	Aug. 31, 2019CNY (¥)	Aug. 31, 2019USD ($)	Dec. 31, 2020CNY (¥)	Dec. 31, 2020USD ($)	Dec. 31, 2019USD ($)	Dec. 31, 2018USD ($)	Dec. 31, 2020USD ($)	Sep. 30, 2020CNY (¥)	Sep. 30, 2020USD ($)	Jun. 30, 2019CNY (¥)	Jun. 30, 2019USD ($)	Feb. 28, 2019CNY (¥)	Feb. 28, 2019USD ($)
Debt Instrument [Line Items]
Amount repaid								$ 1,063,670	$ 2,417,192	$ 1,360,051
Current portion of longterm borrowings				$ 322,525					$ 322,525		$ 1,183,926
Borrowings from Shanghai Pudong Development Bank Co., Ltd., one
Debt Instrument [Line Items]
Amount borrowed																¥ 7,500,000	$ 1,149,442.90
Term of the debt																3 years	3 years
Interest rate (as a percent)																5.46%	5.46%
Amount repaid					¥ 375,000	$ 57,472.15	¥ 1,250,000	$ 191,573.82
Current portion of longterm borrowings	¥ 3,375,000						3,375,000				517,249.31
Borrowings from Shanghai Pudong Development Bank Co., Ltd., two
Debt Instrument [Line Items]
Amount borrowed														¥ 6,000,000	$ 919,554.32
Term of the debt														3 years	3 years
Interest rate (as a percent)														5.23%	5.23%
Amount repaid	1,000,000	$ 153,259.05	¥ 300,000	$ 45,977.72
Current portion of longterm borrowings	2,700,000						2,700,000				413,799.45
Borrowings from Shanghai Pudong Development Bank Co., Ltd., three
Debt Instrument [Line Items]
Amount borrowed												¥ 16,500,000	$ 2,528,774.39
Term of the debt												3 years	3 years
Interest rate (as a percent)												4.27%	4.27%
Current portion of longterm borrowings	¥ 1,650,000						¥ 1,650,000				$ 252,877.44

BORROWINGS - Future maturities

BORROWINGS - Future maturities of short term borrowings and long term borrowings (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
BORROWINGS
2021	$ 5,015,402	$ 1,039,248
2022	1,279,713
2023	1,685,850
Total borrowings	$ 7,980,965	$ 2,555,116

CONVERTIBLE REDEEMABLE PREFER_3

CONVERTIBLE REDEEMABLE PREFERRED SHARES AND WARRANTS - Preferred Shares (Details)

Feb. 02, 2018USD ($)

Dec. 31, 2019USD ($)$ / sharesshares

Feb. 28, 2018shareholder$ / shares

Feb. 28, 2018item$ / shares

Feb. 28, 2018USD ($)$ / shares

Nov. 30, 2014USD ($)$ / sharesshares

May 31, 2018USD ($)$ / sharesshares

Nov. 30, 2019USD ($)$ / sharesshares

Jun. 30, 2016USD ($)$ / sharesshares

Dec. 31, 2020USD ($)shares

Dec. 31, 2018USD ($)

Nov. 30, 2011USD ($)$ / shares

Temporary Equity [Line Items]

Total maximum consideration from exercise of warrants

$ 7,500,000

Dividend rate (as a percent)

6.00%

Liquidation preference (as a percent)

100.00%

Simple interest accruing on original issue price (as a percent)

6.00%

Conversion ratio | shares

1

Minimum market capitalization from Qualified Public Offering

$ 650,000,000

Minimum aggregate proceeds from Qualified Public Offering

$ 75,000,000

Minimum percentage of voting power held by preferred share holders to provide written consent

80.00%

Deemed contribution from convertible redeemable preferred shareholders

$ 1,186,187

$ 1,186,187

Series C 1 Warrants

Temporary Equity [Line Items]

Consideration from issuance of warrants

$ 0

Exercise price of warrants (in dollars per share) | $ / shares

$ 10.21

$ 10.21

$ 10.21

Series A-1 convertible redeemable preferred shares

Temporary Equity [Line Items]

Conversion price (in dollars per share) | $ / shares

$ 1

Shares issued upon conversion of Series Pre-A Convertible Notes (in shares) | shares

5,473,957

Series A-2 convertible redeemable preferred shares

Temporary Equity [Line Items]

Number of new shares issued | shares

2,370,414

Shares issued price per share (in dollars per share) | $ / shares

$ 1.27

Total consideration from issuance of convertible redeemable preferred shares

$ 3,000,000

Series B convertible redeemable preferred shares

Temporary Equity [Line Items]

Number of new shares issued | shares

7,494,537

Shares issued price per share (in dollars per share) | $ / shares

$ 3.74

Total consideration from issuance of convertible redeemable preferred shares

$ 27,999,995

Series C-1 convertible redeemable preferred shares

Temporary Equity [Line Items]

Number of new shares issued | shares

5,597,354

Shares issued price per share (in dollars per share) | $ / shares

$ 8.93

Total consideration from issuance of convertible redeemable preferred shares

$ 50,000,033

Number of Series C-1 investors to whom warrants were issued

2

2

Series C-2 convertible redeemable preferred shares

Temporary Equity [Line Items]

Number of new shares issued | shares

1,861,121

Shares issued price per share (in dollars per share) | $ / shares

$ 10.21

Total consideration from issuance of convertible redeemable preferred shares

$ 18,999,999

Series C-3 convertible redeemable preferred shares

Temporary Equity [Line Items]

Number of new shares issued | shares

4,452,441

Shares issued price per share (in dollars per share) | $ / shares

$ 11.23

Total consideration from issuance of convertible redeemable preferred shares

$ 50,000,000

Series Pre-A Convertible Notes

Temporary Equity [Line Items]

Amount of Series Pre A Convertible Notes issued

$ 4,590,908

Series Pre A Convertible Notes, Interest rate (as a percent)

6.00%

Conversion price (in dollars per share) | $ / shares

$ 1

CONVERTIBLE REDEEMABLE PREFER_4

CONVERTIBLE REDEEMABLE PREFERRED SHARES AND WARRANTS - Preferred Share Activities (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance	$ 154,201,294	$ 84,955,111	$ 36,473,952
Ending balance	154,449,407	154,201,294	84,955,111
Series A-1 convertible redeemable preferred shares
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance	5,473,957	5,473,957	5,473,957
Ending balance	5,473,957	5,473,957	5,473,957
Series A-2 convertible redeemable preferred shares
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance	3,000,000	3,000,000	3,000,000
Ending balance	3,000,000	3,000,000	3,000,000
Series B convertible redeemable preferred shares
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance	27,999,995	27,999,995	27,999,995
Ending balance	27,999,995	27,999,995	27,999,995
Series C-1 convertible redeemable preferred shares
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance	48,727,343	48,481,159
Issuance of Preferred Shares			48,258,313
Accretion of Preferred Shares to redemption value	248,113	246,184	222,846
Ending balance	48,975,456	48,727,343	$ 48,481,159
Series C-2 convertible redeemable preferred shares
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance	18,999,999
Issuance of Preferred Shares		18,999,999
Ending balance	18,999,999	18,999,999
Series C-3 convertible redeemable preferred shares
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance	50,000,000
Issuance of Preferred Shares		50,000,000
Ending balance	$ 50,000,000	$ 50,000,000

CONVERTIBLE REDEEMABLE PREFER_5

CONVERTIBLE REDEEMABLE PREFERRED SHARES AND WARRANTS - Warrants (Details)	12 Months Ended
	Dec. 31, 2020USD ($)	Dec. 31, 2019USD ($)	Dec. 31, 2018USD ($)$ / shares
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Gains from decrease in fair value of warrants | $	$ 0	$ 1,207,415	$ 534,305
Exercise price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and Rights Outstanding, Measurement Input | $ / shares			10.2089
Minimum | Risk free interest rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and Rights Outstanding, Measurement Input			1.92
Minimum | Estimated volatility rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and Rights Outstanding, Measurement Input			63.78
Maximum | Risk free interest rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and Rights Outstanding, Measurement Input			2.37
Maximum | Estimated volatility rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and Rights Outstanding, Measurement Input			71

SHARE-BASED COMPENSATION (Detai

SHARE-BASED COMPENSATION (Details)	Nov. 09, 2020USD ($)$ / sharesshares	Aug. 15, 2020USD ($)shares	Dec. 31, 2020USD ($)installment$ / sharesshares	Dec. 31, 2019USD ($)$ / sharesshares	Sep. 30, 2017shares	Nov. 07, 2015shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period (in years)			10 years
Number of equal vesting instalments | installment			4
Share options granted			6,313,373	372,500
Incremental compensation cost to be recognized | $		$ 0
Exercise price (in USD per share) | $ / shares			$ 2	$ 1.26
Shares issued upon exercise of share options (in shares)			3,694,934	34,000
Total amount | $			$ 140,928	$ 18,700
Weighted average period for recognition of share based compensation expense (in years)			3 years 4 months 21 days
Share options granted containing both service conditions and performance conditions			2,178,808
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)			5 years
Management
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)		4 years
Share options granted		184,692
Number of options, vesting schedules and conditions waived	2,375,000
Shares issued upon exercise of share options (in shares)	2,375,000
Total amount | $	$ 5,197,650
shares unvested			2,285,000
Management | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price (in USD per share) | $ / shares	$ 1.83
Management | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price (in USD per share) | $ / shares	$ 2.26
2015 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum aggregate number of shares that may be issued						4,336,126
2017 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum aggregate number of shares that may be issued					6,336,126
2019 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum aggregate number of shares that may be issued				11,391,131

SHARE-BASED COMPENSATION - Shar

SHARE-BASED COMPENSATION - Share Option Activities (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Number of Options
Outstanding at the beginning	866,028	574,328	848,828
Granted	6,313,373	372,500
Exercise (in shares)	(3,694,934)	(34,000)
Forfeited (in shares)	(190,000)	(46,800)	(274,500)
Outstanding at the end	3,294,467	866,028	574,328	848,828
Vested and expected to vest at the end	3,294,467
Exercisable at the end	393,424
Weighted Average Exercise Price
Outstanding at the beginning (in dollars per share)	$ 0.65	$ 0.30	$ 0.38
Granted (in dollars per share)	2	1.26
Exercised (in dollars per share)	1.93	0.55
Forfeited (in dollars per share)	1.70	1.22	0.55
Outstanding at the end (in dollars per share)	1.75	0.65	0.30	$ 0.38
Vested and expected to vest at the end (in dollars per share)	1.75
Exercisable at the end (in dollars per share)	0.75
Weighted Average Grant Date Fair Value
Outstanding at the beginning (in dollars per share)	3.67	2.80	3.75
Granted (in dollars per share)	7.01	5.46
Exercised (in dollars per share)	6.55	5.71
Forfeited (in dollars per share)	6.91	5.75	5.71
Outstanding at the end (in dollars per share)	6.65	$ 3.67	$ 2.80	$ 3.75
Vested and expected to vest at the end (in dollars per share)	6.65
Exercisable at the end (in dollars per share)	$ 4.46
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value
Outstanding (in years)	8 years 9 months 11 days	7 years 3 months 7 days	7 years 1 month 21 days	8 years 6 months 22 days
Vested and expected to vest at the end (in years)	8 years 9 months 11 days
Exercisable at the end (in years)	6 years 8 months 5 days
Outstanding at the beginning (in dollars)	$ 6,328,171	$ 3,734,644	$ 4,907,569
Outstanding at the end (in dollars)	33,410,968	$ 6,328,171	$ 3,734,644	$ 4,907,569
Vested and expected to vest at the end (in dollars)	33,410,968
Exercisable at the end (in dollars)	$ 4,859,836

SHARE-BASED COMPENSATION - Sh_2

SHARE-BASED COMPENSATION - Share Option Activities - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
SHARE-BASED COMPENSATION
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	3,694,934	34,000
Aggregate fair value of the equity awards vested	$ 8,430,085	$ 366,113	$ 165,609
Unrecognized employee share based compensation expense	$ 34,096,227
Weighted average period to recognize unrecognized compensation cost (in years)	3 years 4 months 21 days

SHARE-BASED COMPENSATION - Fair

SHARE-BASED COMPENSATION - Fair Value Of Share Options (Details) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Assumptions used to estimate the fair value
Risk free interest rate, minimum	0.68%	1.78%
Risk free interest rate, maximum	0.83%	2.73%
Dividend yield	0.00%	0.00%
Expected volatility, minimum	72.30%	67.50%
Expected volatility, maximum	73.40%	71.00%
Exercise multiple, minimum	$ 2.2	$ 2.2
Exercise multiple, maximum	$ 2.8	$ 2.8
Contractual life (in years)	10 years	10 years

SHARE-BASED COMPENSATION - Sh_3

SHARE-BASED COMPENSATION - Share based compensation expenses (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share based compensation expenses	$ 10,129,541	$ 611,711	$ 126,540
Research and development expenses
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share based compensation expenses	6,472,083	404,620	$ 126,540
Administrative expenses
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share based compensation expenses	$ 3,657,458	$ 207,091

COLLABORATION ARRANGEMENTS (Det

COLLABORATION ARRANGEMENTS (Details)	1 Months Ended					12 Months Ended
	May 31, 2019USD ($)	Apr. 30, 2019item	Dec. 31, 2018CNY (¥)	Dec. 31, 2018USD ($)	Oct. 31, 2018USD ($)	Dec. 31, 2020CNY (¥)	Dec. 31, 2020USD ($)	Dec. 31, 2019CNY (¥)	Dec. 31, 2019USD ($)	Dec. 31, 2018CNY (¥)	Dec. 31, 2018USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenues							$ 700,913		$ 480,000		$ 1,511,168
Guilin Sanjin Pharmaceutical Co., Ltd. License Agreement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upfront cash payment received			¥ 10,000,000	$ 1,511,168
Agreed period for not to grant rights associated with antibodies to third parties			3 years	3 years
Revenues										¥ 10,000,000	$ 1,511,168
Dragon Boat Biopharmaceutical (Shanghai) Limited License Agreement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upfront cash payment received						¥ 4,000,000	573,378
Agreed period for not to grant rights associated with antibodies to third parties								3 years	3 years
Revenues | ¥								¥ 0
Signal Pharmaceuticals LLC
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upfront cash payment received	$ 72,000				$ 237,500		480,000
Revenues							309,500		$ 480,000
ADCT Collaboration Agreement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenues							$ 225,000
Maximum number of selected targets, agreed for generation of antibodies | item		2
Period for reservation of target right						1 year	1 year
Minimum threshold written notice period for termination of agreement						30 days	30 days
Other income							$ 100,000

INCOME TAX EXPENSE (Details)

INCOME TAX EXPENSE (Details) - USD ($)	Jan. 01, 2008	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2021
PRC
Income tax rate (as a percent)	25.00%
PRC | TASE
Preferential tax rate (as a percent)	15.00%
Effective period of TASE certificate (in years)	3 years
PRC | TASE | Adagene (Suzhou) Limited
Preferential tax rate (as a percent)					15.00%
Hong Kong
Income tax rate (as a percent)			16.50%	16.50%
Withholding tax		$ 0
Hong Kong | Adagene (Hong Kong) Limited
Assessable profits or earnings			$ 0	$ 0
Provision for income taxes			0	0
Australia
Income tax rate (as a percent)		30.00%
Australia | Adagene Australia PTY Ltd.
Taxable Income		$ 0	0	0
Provision for income taxes		$ 0	0	0
United States
State income tax rate (as a percent)		21.00%
United States | Adagene Incorporated
Taxable Income		$ 0	0	0
Provision for income taxes		$ 0	$ 0	$ 0
California
State income tax rate (as a percent)		8.84%

INCOME TAX EXPENSE - Income tax

INCOME TAX EXPENSE - Income tax reconciliation (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
INCOME TAX EXPENSE
Loss before income tax	$ (42,397,279)	$ (16,432,308)	$ (15,266,184)
Income tax computed at respective applicable tax rate	(1,073,105)	27,875	(30,560)
Research and development super-deduction	(718,979)	(230,126)	(579,090)
Nondeductible expenses	1,238	3,306	4,010
Changes in valuation allowance	$ 1,790,846	$ 198,945	$ 605,640

INCOME TAX EXPENSE - Deferred t

INCOME TAX EXPENSE - Deferred tax assets (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Deferred tax assets:
Net operating loss carry forward	$ 1,504,966	$ 928,989	$ 735,717
Depreciation and amortization of property, equipment and software	7,428	9,886	4,213
Gross deferred tax assets	1,512,394	938,875	739,930
Less: valuation allowance	$ (1,512,394)	$ (938,875)	$ (739,930)	$ (134,290)

INCOME TAX EXPENSE - Valuation

INCOME TAX EXPENSE - Valuation Allowance (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Movement of the valuation allowance
Balance as of January 1	$ 938,875	$ 739,930	$ 134,290
Addition	573,519	198,945	605,640
Balance as of December 31	$ 1,512,394	$ 938,875	$ 739,930

NET LOSS PER SHARE (Details)

NET LOSS PER SHARE (Details) - USD ($)	Feb. 02, 2018	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Numerator:
Net loss attributable to Adagene Inc.'s shareholders		$ (42,397,279)	$ (16,432,308)	$ (15,266,184)
Deemed contribution from convertible redeemable preferred shareholders	$ 1,186,187			1,186,187
Accretion of convertible redeemable preferred shares to redemption value		(248,113)	(246,184)	(222,846)
Net loss attributable to ordinary shareholders		$ (42,645,392)	$ (16,678,492)	$ (14,302,843)
Weighted average number of ordinary shares used in per share calculation:
Weighted-average number of ordinary shares outstanding-basic and diluted		15,950,698	15,178,232	15,159,136
Net Loss per share-basic and diluted		$ (2.67)	$ (1.10)	$ (0.94)

NET LOSS PER SHARE - Anti-dilut

NET LOSS PER SHARE - Anti-dilutive Securities (Details) - shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Convertible redeemable preferred shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities not included in the computation of diluted net loss per share	27,249,824	21,977,914	20,430,200
Share options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities not included in the computation of diluted net loss per share	1,795,932	582,526	293,133

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Related Party Transaction [Line Items]
Amounts due from related parties	$ 132,396	$ 1,433,186
Amounts due to related parties	2,535,358	1,895,779
Receipt of CRO and CMO services
Related Party Transaction [Line Items]
Related party transactions	9,892,295	5,704,306	$ 7,504,591
WuXi AppTec Group
Related Party Transaction [Line Items]
Amounts due from related parties	124,704	739,051
Amounts due to related parties	173,855	432,784
WuXi AppTec Group | Receipt of CRO and CMO services
Related Party Transaction [Line Items]
Related party transactions	2,674,586	2,136,344	969,079
Four senior management personnel
Related Party Transaction [Line Items]
Amounts due from related parties		350,865
Peter Luo
Related Party Transaction [Line Items]
Amounts due from related parties		338,818
Amounts due to related parties		83,254
WuXi Biologics (Shanghai) Co., Ltd.
Related Party Transaction [Line Items]
Amounts due from related parties	7,692	4,452
Amounts due to related parties	2,361,503	1,379,741
WuXi Biologics (Shanghai) Co., Ltd. | Receipt of CRO and CMO services
Related Party Transaction [Line Items]
Related party transactions	$ 7,217,709	$ 3,567,962	$ 6,535,512

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Schedule of future minimum payments under non cancelable operating leases
2021	$ 306,311
2022	240,530
2023	129,555
Total	676,396
Total rental related expenses for operating leases	$ 177,453	$ 175,812

RESTRICTED NET ASSETS (Details)

RESTRICTED NET ASSETS (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
RESTRICTED NET ASSETS
Minimum percentage of profit after tax to be transferred to statutory reserve	10.00%
Statutory reserve required percentage on registered capital	50.00%
Total restricted net assets	$ 1,267,900	$ 1,267,900
After-Tax Income, Annual appropriations, Percentage	10.00%
Restrictions on net assets of PRC subsidiaries , threshold percentage	25.00%

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details)

Mar. 16, 2021$ / sharesshares

Mar. 12, 2021$ / sharesshares

Feb. 11, 2021USD ($)$ / sharesshares

Feb. 01, 2021USD ($)

Jan. 16, 2021$ / sharesshares

Nov. 09, 2020$ / shares

Aug. 15, 2020shares

Dec. 31, 2020$ / sharesshares

Dec. 31, 2019$ / sharesshares

Jan. 18, 2021USD ($)

Nov. 30, 2019$ / shares

May 31, 2018$ / shares

Jun. 30, 2016$ / shares

Nov. 30, 2014$ / shares

Subsequent Event [Line Items]

Exercise price (in USD per share) | $ / shares

$ 2

$ 1.26

Fair value (in UDS per option) | $ / shares

$ 7.01

$ 5.46

Share options granted

6,313,373

372,500

Series A-1 convertible redeemable preferred shares

Subsequent Event [Line Items]

Convertible redeemable preferred shares, shares outstanding

5,473,957

5,473,957

Series A-2 convertible redeemable preferred shares

Subsequent Event [Line Items]

Share price (in USD per share) | $ / shares

$ 1.27

Convertible redeemable preferred shares, shares outstanding

2,370,414

2,370,414

Series B convertible redeemable preferred shares

Subsequent Event [Line Items]

Share price (in USD per share) | $ / shares

$ 3.74

Convertible redeemable preferred shares, shares outstanding

7,494,537

7,494,537

Series C-1 convertible redeemable preferred shares

Subsequent Event [Line Items]

Share price (in USD per share) | $ / shares

$ 8.93

Convertible redeemable preferred shares, shares outstanding

5,597,354

5,597,354

Series C-2 convertible redeemable preferred shares

Subsequent Event [Line Items]

Share price (in USD per share) | $ / shares

$ 10.21

Convertible redeemable preferred shares, shares outstanding

1,861,121

1,861,121

Series C-3 convertible redeemable preferred shares

Subsequent Event [Line Items]

Share price (in USD per share) | $ / shares

$ 11.23

Convertible redeemable preferred shares, shares outstanding

4,452,441

4,452,441

Management

Subsequent Event [Line Items]

Share options granted

184,692

Management | Maximum

Subsequent Event [Line Items]

Exercise price (in USD per share) | $ / shares

$ 2.26

Subsequent Event

Subsequent Event [Line Items]

Number of shares surrendered

491,119

Exercise price (in USD per share) | $ / shares

$ 13.85

Fair value (in UDS per option) | $ / shares

$ 7.85

Subscriptions receivable from shareholders settled | $

$ 197,068

Subsequent Event | Series A-1 convertible redeemable preferred shares

Subsequent Event [Line Items]

Convertible redeemable preferred shares, shares outstanding

5,473,957

Number of shares converted

5,473,957

Subsequent Event | Series A-2 convertible redeemable preferred shares

Subsequent Event [Line Items]

Convertible redeemable preferred shares, shares outstanding

2,370,414

Number of shares converted

2,370,414

Subsequent Event | Series B convertible redeemable preferred shares

Subsequent Event [Line Items]

Convertible redeemable preferred shares, shares outstanding

7,494,537

Number of shares converted

7,494,537

Subsequent Event | Series C-1 convertible redeemable preferred shares

Subsequent Event [Line Items]

Convertible redeemable preferred shares, shares outstanding

5,597,354

Number of shares converted

5,597,354

Subsequent Event | Series C-2 convertible redeemable preferred shares

Subsequent Event [Line Items]

Convertible redeemable preferred shares, shares outstanding

1,861,121

Number of shares converted

1,861,121

Subsequent Event | Series C-3 convertible redeemable preferred shares

Subsequent Event [Line Items]

Convertible redeemable preferred shares, shares outstanding

4,452,441

Number of shares converted

4,452,441

Subsequent Event | IPO

Subsequent Event [Line Items]

ADS ratio

1.25

Subsequent Event | IPO | ADS

Subsequent Event [Line Items]

Shares issued (in shares)

8,457,100

Share price (in USD per share) | $ / shares

$ 19

Subsequent Event | IPO | Ordinary shares

Subsequent Event [Line Items]

Total aggregate gross proceeds | $

$ 161,000,000

Subsequent Event | Underwriters' option | ADS

Subsequent Event [Line Items]

Shares issued (in shares)

1,103,100

Subsequent Event | Exelixis Agreement

Subsequent Event [Line Items]

Upfront cash payment received | $

$ 11,000,000

Subsequent Event | Exelixis Agreement | Maximum

Subsequent Event [Line Items]

Development and regulatory milestone payments receivable | $

255,000,000

Sales milestone payments receivable | $

525,000,000

Subsequent Event | Exelixis Agreement | Achievement of specified development and regulatory milestones | Maximum

Subsequent Event [Line Items]

Development and regulatory milestone payments receivable | $

127,500,000

Subsequent Event | Exelixis Agreement | Achievement of specified commercial milestone | Maximum

Subsequent Event [Line Items]

Sales milestone payments receivable | $

$ 262,500,000

Subsequent Event | Performance Incentive Plan 2021 (the "2021 Plan")

Subsequent Event [Line Items]

Aggregate ordinary shares reserved for issuance

2,994,000

Incremental percent of shares

5.00%

Subsequent Event | Performance Incentive Plan 2021 (the "2021 Plan") | Employees

Subsequent Event [Line Items]

Exercise price (in USD per share) | $ / shares

$ 17.56

$ 17.10

Share options granted

408,000

200,000

Subsequent Event | Performance Incentive Plan 2021 (the "2021 Plan") | Management

Subsequent Event [Line Items]

Share options granted

23,733

CONDENSED FINANCIAL INFORMATI_3

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Balance sheets (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Assets, Current [Abstract]
Cash and cash equivalents	$ 75,150,998	$ 92,532,788
Short-term Investments		8,000,000
Amounts due from related parties	132,396	1,433,186
Prepayments and other current assets	3,813,984	1,476,973
Total current assets	79,097,378	103,922,947
Other noncurrent assets	3,098,234	87,227
TOTAL ASSETS	84,262,737	105,889,499
Current liabilities:
Accounts payable	1,809,975	712,714
Contract liabilities	725,536	993,378
Amounts due to related parties	2,535,358	1,895,779
Accruals and other current liabilities	6,059,497	2,540,164
Total current liabilities	16,145,768	7,181,283
TOTAL LIABILITIES	19,203,286	8,697,151
Mezzanine equity:
Total mezzanine equity	154,449,407	154,201,294	$ 84,955,111	$ 36,473,952
Shareholders' deficit:
Ordinary shares (par value of US$0.0001 per share; 500,000,000 and 500,000,000 shares authorized; 15,193,136 shares issued and outstanding as of December 31, 2019; 18,888,070 shares issued and 16,603,070 shares outstanding as of December 31, 2020)	1,889	1,519
Subscriptions receivable from shareholders	(7,172,192)	(197,068)
Additional paidin capital	23,786,652	6,789,542
Accumulated other comprehensive loss	(350,981)	(344,894)
Accumulated deficit	(105,655,324)	(63,258,045)
Total shareholders' deficit	(89,389,956)	(57,008,946)	(41,026,664)	(25,652,886)
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT	84,262,737	105,889,499
Series A-1 convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	5,473,957	5,473,957	5,473,957	5,473,957
Series A-2 convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	3,000,000	3,000,000	3,000,000	3,000,000
Series B convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	27,999,995	27,999,995	27,999,995	$ 27,999,995
Series C-1 convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	48,975,456	48,727,343	$ 48,481,159
Series C-2 convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	18,999,999	18,999,999
Series C-3 convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	50,000,000	50,000,000
Parent Company | Reportable Legal Entities
Assets, Current [Abstract]
Cash and cash equivalents	52,973,889	91,168,159
Short-term Investments		8,000,000
Amounts due from related parties	27,308,613	6,362,724
Prepayments and other current assets	1,625,197	1,211,891
Total current assets	81,907,699	106,742,774
Investments in subsidiaries		2,507,052
Other noncurrent assets	3,056,931	4,299
TOTAL ASSETS	84,964,630	109,254,125
Current liabilities:
Accounts payable	443,604	326,762
Contract liabilities	112,500	325,000
Amounts due to related parties	12,787,321	11,247,674
Accruals and other current liabilities	3,165,097	162,341
Total current liabilities	16,508,522	12,061,777
Deficit in subsidiaries	3,396,657
TOTAL LIABILITIES	19,905,179	12,061,777
Mezzanine equity:
Total mezzanine equity	154,449,407	154,201,294
Shareholders' deficit:
Ordinary shares (par value of US$0.0001 per share; 500,000,000 and 500,000,000 shares authorized; 15,193,136 shares issued and outstanding as of December 31, 2019; 18,888,070 shares issued and 16,603,070 shares outstanding as of December 31, 2020)	1,889	1,519
Subscriptions receivable from shareholders	(7,172,192)	(197,068)
Additional paidin capital	23,786,652	6,789,542
Accumulated other comprehensive loss	(350,981)	(344,894)
Accumulated deficit	(105,655,324)	(63,258,045)
Total shareholders' deficit	(89,389,956)	(57,008,946)
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT	84,964,630	109,254,125
Parent Company | Reportable Legal Entities | Series A-1 convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	5,473,957	5,473,957
Parent Company | Reportable Legal Entities | Series A-2 convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	3,000,000	3,000,000
Parent Company | Reportable Legal Entities | Series B convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	27,999,995	27,999,995
Parent Company | Reportable Legal Entities | Series C-1 convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	48,975,456	48,727,343
Parent Company | Reportable Legal Entities | Series C-2 convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	18,999,999	18,999,999
Parent Company | Reportable Legal Entities | Series C-3 convertible redeemable preferred shares
Mezzanine equity:
Total mezzanine equity	$ 50,000,000	$ 50,000,000

CONDENSED FINANCIAL INFORMATI_4

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Balance sheets - Parenthetical (Details) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Ordinary shares, par value	$ 0.0001	$ 0.0001
Ordinary shares, shares authorized	500,000,000	500,000,000
Ordinary shares, shares issued	18,888,070	15,193,136
Ordinary shares, shares outstanding	16,603,070	15,193,136
Series A-1 convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	5,473,957	5,473,957
Convertible redeemable preferred shares, shares issued	5,473,957	5,473,957
Convertible redeemable preferred shares, shares outstanding	5,473,957	5,473,957
Series A-2 convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	2,370,414	2,370,414
Convertible redeemable preferred shares, shares issued	2,370,414	2,370,414
Convertible redeemable preferred shares, shares outstanding	2,370,414	2,370,414
Series B convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	7,494,537	7,494,537
Convertible redeemable preferred shares, shares issued	7,494,537	7,494,537
Convertible redeemable preferred shares, shares outstanding	7,494,537	7,494,537
Series C-1 convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	5,597,354	5,597,354
Convertible redeemable preferred shares, shares issued	5,597,354	5,597,354
Convertible redeemable preferred shares, shares outstanding	5,597,354	5,597,354
Series C-2 convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	1,861,121	1,861,121
Convertible redeemable preferred shares, shares issued	1,861,121	1,861,121
Convertible redeemable preferred shares, shares outstanding	1,861,121	1,861,121
Series C-3 convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	4,452,441	4,452,441
Convertible redeemable preferred shares, shares issued	4,452,441	4,452,441
Convertible redeemable preferred shares, shares outstanding	4,452,441	4,452,441
Parent Company | Reportable Legal Entities
Ordinary shares, par value	$ 0.0001	$ 0.0001
Ordinary shares, shares authorized	500,000,000	500,000,000
Ordinary shares, shares issued	18,888,070	15,193,136
Ordinary shares, shares outstanding	16,603,070	15,193,136
Parent Company | Reportable Legal Entities | Series A-1 convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	5,473,957	5,473,957
Convertible redeemable preferred shares, shares issued	5,473,957	5,473,957
Convertible redeemable preferred shares, shares outstanding	5,473,957	5,473,957
Parent Company | Reportable Legal Entities | Series A-2 convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	2,370,414	2,370,414
Convertible redeemable preferred shares, shares issued	2,370,414	2,370,414
Convertible redeemable preferred shares, shares outstanding	2,370,414	2,370,414
Parent Company | Reportable Legal Entities | Series B convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	7,494,537	7,494,537
Convertible redeemable preferred shares, shares issued	7,494,537	7,494,537
Convertible redeemable preferred shares, shares outstanding	7,494,537	7,494,537
Parent Company | Reportable Legal Entities | Series C-1 convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	5,597,354	5,597,354
Convertible redeemable preferred shares, shares issued	5,597,354	5,597,354
Convertible redeemable preferred shares, shares outstanding	5,597,354	5,597,354
Parent Company | Reportable Legal Entities | Series C-2 convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	1,861,121	1,861,121
Convertible redeemable preferred shares, shares issued	1,861,121	1,861,121
Convertible redeemable preferred shares, shares outstanding	1,861,121	1,861,121
Parent Company | Reportable Legal Entities | Series C-3 convertible redeemable preferred shares
Convertible redeemable preferred shares, par value	$ 0.0001	$ 0.0001
Convertible redeemable preferred shares, shares authorized	4,452,441	4,452,441
Convertible redeemable preferred shares, shares issued	4,452,441	4,452,441
Convertible redeemable preferred shares, shares outstanding	4,452,441	4,452,441

CONDENSED FINANCIAL INFORMATI_5

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Statements of comprehensive loss (Details) - USD ($)	Feb. 02, 2018	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Condensed Income Statements, Captions [Line Items]
Revenues		$ 700,913	$ 480,000	$ 1,511,168
Expenses
Research and development expenses		(33,538,035)	(16,211,750)	(16,080,560)
Third parties		(23,645,740)	(10,507,444)	(8,575,969)
Related parties		(9,892,295)	(5,704,306)	(7,504,591)
Administrative expenses		(10,314,536)	(3,437,900)	(2,765,134)
Loss from operations		(43,151,658)	(19,169,650)	(17,334,526)
Interest income		629,288	922,680	710,711
Other income, net		971,949	723,476	901,713
Foreign exchange gain, net		(644,693)	21,867	12,698
Change in fair value of warrant liabilities		0	1,207,415	534,305
Loss before income tax		(42,397,279)	(16,432,308)	(15,266,184)
Net loss attributable to Adagene Inc.'s shareholders		(42,397,279)	(16,432,308)	(15,266,184)
Other comprehensive income (loss)
Foreign currency translation adjustments, net of nil tax		(6,087)	65,799	(11,288)
Total comprehensive loss attributable to Adagene Inc.'s shareholders		(42,403,366)	(16,366,509)	(15,277,472)
Net loss attributable to Adagene Inc.'s shareholders		(42,397,279)	(16,432,308)	(15,266,184)
Deemed contribution from convertible redeemable preferred shareholders	$ 1,186,187			1,186,187
Accretion of convertible redeemable preferred shares to redemption value		(248,113)	(246,184)	(222,846)
Net loss attributable to ordinary shareholders		(42,645,392)	(16,678,492)	(14,302,843)
Parent Company | Reportable Legal Entities
Expenses
Research and development expenses		(31,745,136)	(18,318,724)	(15,803,341)
Third parties		(9,582,687)	(2,844,722)	(1,810,899)
Related parties		(22,162,449)	(15,474,002)	(13,992,442)
Administrative expenses		(6,092,443)	(787,568)	(556,382)
Loss from operations		(37,213,696)	(18,817,309)	(16,359,723)
Interest income		616,933	908,981	691,448
Other income, net		103,896
Foreign exchange gain, net		1,616	(47)
Change in fair value of warrant liabilities			1,207,415	534,305
Equity in income (share of losses) of subsidiaries		(5,906,028)	268,652	(132,214)
Loss before income tax		(42,397,279)	(16,432,308)	(15,266,184)
Net loss attributable to Adagene Inc.'s shareholders		(42,397,279)	(16,432,308)	(15,266,184)
Other comprehensive income (loss)
Foreign currency translation adjustments, net of nil tax		(6,087)	65,799	(11,288)
Total comprehensive loss attributable to Adagene Inc.'s shareholders		(42,403,366)	(16,366,509)	(15,277,472)
Net loss attributable to Adagene Inc.'s shareholders		(42,397,279)	(16,432,308)	(15,266,184)
Deemed contribution from convertible redeemable preferred shareholders				1,186,187
Accretion of convertible redeemable preferred shares to redemption value		(248,113)	(246,184)	(222,846)
Net loss attributable to ordinary shareholders		(42,645,392)	(16,678,492)	$ (14,302,843)
Parent Company | Reportable Legal Entities | Service revenue from a related party
Condensed Income Statements, Captions [Line Items]
Revenues		398,883	$ 288,983
Parent Company | Reportable Legal Entities | Licensing revenue
Condensed Income Statements, Captions [Line Items]
Revenues		$ 225,000

CONDENSED FINANCIAL INFORMATI_6

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Statements of comprehensive loss - Parenthetical (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Condensed Income Statements, Captions [Line Items]
Foreign currency translation adjustments, tax	$ 0	$ 0	$ 0
Parent Company | Reportable Legal Entities
Condensed Income Statements, Captions [Line Items]
Foreign currency translation adjustments, tax	$ 0	$ 0	$ 0

CONDENSED FINANCIAL INFORMATI_7

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Statements of cash flows (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Condensed Cash Flow Statements, Captions [Line Items]
Net cash used in operating activities	$ (28,529,720)	$ (18,153,556)	$ (14,264,665)
Net cash generated from (used in) investing activities	7,072,731	24,855,868	(29,509,537)
Net cash generated from financing activities	4,439,376	69,694,477	51,057,850
Net increase (decrease) in cash and cash equivalents	(17,381,790)	76,474,333	7,322,351
Cash and cash equivalents at the beginning of year	92,532,788	16,058,455	8,736,104
Cash and cash equivalents at the end of year	75,150,998	92,532,788	16,058,455
Parent Company | Reportable Legal Entities
Condensed Cash Flow Statements, Captions [Line Items]
Net cash used in operating activities	(45,755,914)	(14,521,997)	(16,346,700)
Third parties	(26,135,688)	(2,660,397)	(2,919,363)
Related parties	(19,620,226)	(11,861,600)	(13,427,337)
Net cash generated from (used in) investing activities	7,991,594	25,941,876	(28,535,658)
Net cash generated from financing activities	(429,950)	68,999,999	50,018,733
Net increase (decrease) in cash and cash equivalents	(38,194,270)	80,419,878	5,136,375
Cash and cash equivalents at the beginning of year	91,168,159	10,748,281	5,611,906
Cash and cash equivalents at the end of year	$ 52,973,889	$ 91,168,159	$ 10,748,281

CONDENSED FINANCIAL INFORMATI_8

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Related party balances (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Related Party Transaction [Line Items]
Amounts due from related parties	$ 132,396	$ 1,433,186
Amounts due to related parties	$ 2,535,358	1,895,779
Adagene Incorporated
Related Party Transaction [Line Items]
Gross margin rate	0.00%
WuXi AppTec Group
Related Party Transaction [Line Items]
Amounts due from related parties	$ 124,704	739,051
Amounts due to related parties	173,855	432,784
Parent Company | Reportable Legal Entities
Related Party Transaction [Line Items]
Amounts due from related parties	27,308,613	6,362,724
Amounts due to related parties	12,787,321	11,247,674
Parent Company | Reportable Legal Entities | Adagene (Hong Kong) Limited
Related Party Transaction [Line Items]
Amounts due from related parties	4,331,082	3,032,766
Amounts due to related parties		13
Parent Company | Reportable Legal Entities | Adagene Incorporated
Related Party Transaction [Line Items]
Amounts due from related parties	7,123,583	2,790,233
Amounts due to related parties		1,743,435
Parent Company | Reportable Legal Entities | Adagene PTE. Ltd.
Related Party Transaction [Line Items]
Amounts due from related parties	15,192,454
Parent Company | Reportable Legal Entities | Adagene AG
Related Party Transaction [Line Items]
Amounts due from related parties	630,719
Parent Company | Reportable Legal Entities | Adagene Australia PTY Ltd.
Related Party Transaction [Line Items]
Amounts due from related parties		22,557
Parent Company | Reportable Legal Entities | WuXi AppTec Group
Related Party Transaction [Line Items]
Amounts due from related parties	30,775	517,168
Amounts due to related parties	43,707	377,752
Parent Company | Reportable Legal Entities | Adagene (Suzhou) Limited
Related Party Transaction [Line Items]
Amounts due to related parties	$ 12,743,614	$ 9,126,474