Adagene (ADAG) 6-K 25 Jul 24 Adagene Reports Six Month Financial Results for 2024 and Provides Corporate Update Financial data

Document and Entity Information

Document and Entity Information	6 Months Ended
	Jun. 30, 2024
Document and Entity Information
Document Type	6-K
Document Period End Date	Jun. 30, 2024
Entity Registrant Name	Adagene Inc.
Entity Central Index Key	0001818838
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2024
Amendment Flag	false

UNAUDITED INTERIM CONDENSED CON

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 95,673,787	$ 109,934,257
Amounts due from related parties	$ 31,419	$ 222,027
Other Receivable, after Allowance for Credit Loss, Current, Related Party, Type [Extensible Enumeration]	us-gaap:RelatedPartyMember	us-gaap:RelatedPartyMember
Prepayments and other current assets	$ 3,099,362	$ 3,287,445
Total current assets	98,804,568	113,443,729
Property, equipment and software, net	1,439,102	1,835,121
Operating lease right-of-use assets	254,048	365,103
Other non-current assets	281,881	84,885
TOTAL ASSETS	100,779,599	115,728,838
Current liabilities:
Accounts payable	3,370,641	3,093,752
Amounts due to related parties	$ 17,333,926	$ 16,714,326
Other Liability, Current, Related Party, Type [Extensible Enumeration]	us-gaap:RelatedPartyMember	us-gaap:RelatedPartyMember
Accruals and other current liabilities	$ 2,658,532	$ 3,001,508
Income tax payable	38,382	52,884
Short-term borrowings	4,209,463	4,235,673
Current portion of long-term borrowings	11,765,449	4,161,549
Current portion of operating lease liabilities	141,281	195,955
Total current liabilities	39,517,674	31,455,647
Long-term borrowings	4,560,251	13,540,034
Operating lease liabilities	114,086	173,660
TOTAL LIABILITIES	44,192,011	45,169,341
Commitments and contingencies
Shareholders' equity:
Ordinary shares (par value of US$0.0001 per share; 640,000,000 shares authorized, and 55,145,839 shares issued and outstanding as of December 31, 2023; and 640,000,000 shares authorized, and 55,338,480 shares issued and outstanding as of June 30, 2024)	5,554	5,547
Treasury shares, at cost (1 share as of December 31, 2023 and June 30, 2024)	(4)	(4)
Additional paid-in capital	352,645,033	350,105,518
Accumulated other comprehensive loss	(1,299,803)	(1,800,088)
Accumulated deficit	(294,763,192)	(277,751,476)
Total shareholders' equity	56,587,588	70,559,497
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 100,779,599	$ 115,728,838

UNAUDITED INTERIM CONDENSED C_2

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
Ordinary shares, par value	$ 0.0001	$ 0.0001
Ordinary shares, shares authorized	640,000,000	640,000,000
Ordinary shares, shares issued	55,338,480	55,145,839
Ordinary shares, shares outstanding	55,338,480	55,145,839
Treasury shares	1	1

UNAUDITED INTERIM CONDENSED C_3

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Revenue
Licensing and collaboration revenue		$ 17,295,745
Operating expenses and income
Research and development expenses	$ (14,724,553)	(21,289,434)
Third parties	(13,757,888)	(19,501,323)
Related parties	(966,665)	(1,788,111)
Administrative expenses	(3,597,278)	(4,470,520)
Other operating income, net		3,415,230
Loss from operations	(18,321,831)	(5,048,979)
Interest and investment income	1,976,559	1,918,971
Interest expense	(428,328)	(573,507)
Other income, net	47,040	287,430
Foreign exchange gain (loss), net	(283,768)	1,620,415
Loss before income tax	(17,010,328)	(1,795,670)
Income tax expense	(1,388)	(2,313,136)
Net loss attributable to Adagene Inc.'s shareholders	(17,011,716)	(4,108,806)
Other comprehensive income (loss)
Foreign currency translation adjustments, net of nil tax	500,285	(407,330)
Total comprehensive loss attributable to Adagene Inc.'s shareholders	(16,511,431)	(4,516,136)
Net loss attributable to Adagene Inc.'s shareholders	(17,011,716)	(4,108,806)
Net loss attributable to ordinary shareholders	$ (17,011,716)	$ (4,108,806)
Weighted average number of ordinary shares used in per share calculation:
-Basic	55,213,051	54,604,787
-Diluted	55,213,051	54,604,787
Net loss per ordinary share
-Basic	$ (0.31)	$ (0.08)
-Diluted	$ (0.31)	$ (0.08)

UNAUDITED INTERIM CONDENSED C_4

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Foreign currency translation adjustments, tax	$ 0	$ 0

UNAUDITED INTERIM CONDENSED C_5

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)	Ordinary shares	Treasury shares	Additional paid-in capital	Accumulated other comprehensive loss	Accumulated deficit	Total
Balance at the beginning at Dec. 31, 2022	$ 5,497	$ (4)	$ 342,739,268	$ (849,305)	$ (258,805,106)	$ 83,090,350
Balance at the beginning (in shares) at Dec. 31, 2022	54,965,710
Balance at the beginning, Treasury shares (in shares) at Dec. 31, 2022		(1)
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Net loss					(4,108,806)	(4,108,806)
Other comprehensive income (loss)				(407,330)		(407,330)
Exercise of share options (Note 7)	$ 1		5,499			$ 5,500
Exercise of share options (Note 7) (in shares)	10,000					10,000
Issuance of ordinary shares under performance incentive plan (Note 7)	$ 16		183,584			$ 183,600
Issuance of ordinary shares under performance incentive plan (Note 7) (in shares)	156,725
Share-based compensation	$ 42		4,030,172			4,030,214
Share-based compensation (in shares)	425,905
Balance at the end at Jun. 30, 2023	$ 5,556	$ (4)	346,958,523	(1,256,635)	(262,913,912)	82,793,528
Balance at the end (in shares) at Jun. 30, 2023	55,558,340
Balance at the end, Treasury shares (in shares) at Jun. 30, 2023		(1)
Balance at the beginning at Dec. 31, 2023	$ 5,547	$ (4)	350,105,518	(1,800,088)	(277,751,476)	$ 70,559,497
Balance at the beginning (in shares) at Dec. 31, 2023	55,470,840					55,145,839
Balance at the beginning, Treasury shares (in shares) at Dec. 31, 2023		(1)				(1)
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Net loss					(17,011,716)	$ (17,011,716)
Other comprehensive income (loss)				500,285		500,285
Exercise of share options (Note 7)	$ 7		62,407			$ 62,414
Exercise of share options (Note 7) (in shares)	72,641					72,641
Share-based compensation			2,477,108			$ 2,477,108
Balance at the end at Jun. 30, 2024	$ 5,554	$ (4)	$ 352,645,033	$ (1,299,803)	$ (294,763,192)	$ 56,587,588
Balance at the end (in shares) at Jun. 30, 2024	55,543,481					55,338,480
Balance at the end, Treasury shares (in shares) at Jun. 30, 2024		(1)				(1)

UNAUDITED INTERIM CONDENSED C_6

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Cash flows from operating activities:
Net loss	$ (17,011,716)	$ (4,108,806)
Adjustments to reconcile net loss to net cash used in operating activities:
Income related to short-term investments	(459,789)
Depreciation and amortization	399,798	518,199
Net loss on disposal of property, equipment, software and operating lease right-of-use asset		3,868
Share-based compensation	2,477,108	4,030,214
Amortization of right-of use assets and interest of lease liabilities	116,140	113,695
Foreign exchange loss (gain), net	283,768	(1,620,415)
Changes in operating assets and liabilities:
Prepayments and other current assets	207,683	1,412,635
Amount due from related parties	190,608	225,463
Other non-current assets	3,004	650
Accounts payable	276,889	817,652
Contract liabilities		(14,294,360)
Amount due to related parties	619,600	(2,107,305)
Accruals and other current liabilities	(342,976)	(194,644)
Lease liabilities	(119,332)	(119,184)
Income tax payable	(14,502)	1,895,063
Net cash used in operating activities	(13,373,717)	(13,427,275)
Cash flows from investing activities:
Placement of short-term investments	(53,500,000)	(20,000,000)
Withdrawal of short-term investments	53,959,789	20,000,000
Proceeds from disposal of property, equipment and software		159
Purchase of property, equipment and software	(12,547)	(30,965)
Net cash generated from (used in) investing activities	447,242	(30,806)
Cash flows from financing activities:
Proceeds from borrowings	2,806,230	3,951,237
Proceeds from exercise of share options	42,814	5,500
Payment Of Direct Cost Related To Market Offering	(200,000)
Repayment of borrowings	(4,085,110)	(5,797,491)
Net cash used in financing activities	(1,436,066)	(1,840,754)
Effect of exchange rate on cash and cash equivalents	102,071	300,119
Net decrease in cash and cash equivalents	(14,260,470)	(14,998,716)
Cash and cash equivalents at the beginning of the period	109,934,257	143,758,678	$ 143,758,678
Cash and cash equivalents at the end of the period	95,673,787	128,759,962	$ 109,934,257
Supplemental cash flow disclosures:
Interest paid	395,399	550,403
Income tax paid	15,890	145,500
Cash paid for fixed operating lease costs included in the measurement of lease obligations in operating activities	$ 119,332	119,184
Right-of-use assets obtained in exchange for operating lease obligations		$ 113,901

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2024
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. The shares of the Company’s American Depositary Shares (“ADSs”) are traded on the NASDAQ Global Market, and each ADS represents one and one quarter (1.25) ordinary shares of the Company. As of June 30, 2024, the Company’s principal subsidiaries were 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, and research and development of innovative medicines 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 Adagene Project C1 PTE. Ltd. ​ March 25, 2022 Singapore 100 % Research and development of innovative medicines ​

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2024
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The interim unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary for the fair statement of results for the periods presented, have been included. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period. The comparative year-end condensed balance sheet data was derived from the annual audited consolidated financial statements but is condensed to the same degree as the interim condensed balance sheet data. The interim unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users have read or have access to the annual audited consolidated financial statements filed on March 29, 2024. Principal accounting policies followed by the Company in the preparation of the accompanying condensed consolidated financial statements are summarized below. References to specific U.S. GAAP principles throughout these notes to the accompanying financial statements are to the Accounting Standards Codification (“ASC”), as published by the U.S. Financial Accounting Standards Board (“FASB”). Principles of Consolidation The condensed 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 condensed 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 condensed consolidated financial statements include, but are not limited to, licensing and collaboration revenue recognition, research and development expense allocation, the useful lives and impairment of long-lived assets, tax valuation allowance, share-based compensation expenses, and measurement of right-of-use assets and lease liabilities. 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, Adagene PTE. Ltd. and Adagene Project C1 PTE. Ltd. is the United States dollar (“US$”). The functional currency of the Company’s PRC subsidiary is Renminbi (“RMB”). The functional currency of the Company’s Australian subsidiary is Australian dollar (“AU$”). The functional currency of the Company’s Swiss subsidiary is Swiss Franc (“CHF”). The determination of the respective functional currency is based on the criteria stated in ASC 830, Foreign Currency Matters 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 condensed 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 reporting period. Translation adjustments are reported as accumulated comprehensive loss and are shown as a separate component of other comprehensive loss in the condensed 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 consist primarily of investments in money market funds, which are measured at fair value and are expected to be redeemed within one year. As of June 30, 2024 and December 31, 2023, there were no short-term investments held by the Group. 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 is carried at net realizable value. The allowance for credit losses reflects the best estimate of future losses over the contractual life of outstanding accounts receivable and is determined on the basis of historical experience, specific allowances for known troubled accounts, other currently available information including customer financial condition, and both current and forecasted economic conditions. Fair value measurements The Group applies ASC 820, Fair Value Measurements and Disclosures Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—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, 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. The Group did not transfer any assets or liabilities in or out of Level 3 during the year ended December 31, 2023 or during the six months ended June 30, 2024. The Group had no financial assets and liabilities measured and recorded at fair value on a nonrecurring basis as of December 31, 2023 and June 30, 2024. Property, equipment and software Property and equipment and software are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are 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 condensed 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 six months ended June 30, 2023 and 2024. 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 a substantial portion of the Group’s long-lived assets are located in the PRC with the exception of certain laboratory and electronic equipment which are located in the U.S. 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 Revenue from Contracts with Customers 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: Research and Development Services Milestone Payments: Royalties: 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. Other operating income, net Other operating income, net included a one-time compensation payment from a contract manufacturer in relation to the Group’s losses for a preclinical-related outsourcing arrangement. 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 development and manufacturing organizations (“CDMO”), 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, and (4) other research and development expenses. Research and development costs are expensed as incurred when the related research and development services are provided to the Group and the resulting assets, if any, have no alternative future uses. As of December 31, 2023 and June 30, 2024, the Group had several ongoing clinical studies in various clinical trial stages. The contracts with CRO and CDMO are generally cancellable, with notice, at the Group’s option. The Group did not record any accrued expenses related to cancellation of CRO or CDMO contracts as of December 31, 2023 or June 30, 2024 as the Group did not have any plan to cancel the existing CRO or CDMO 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. These specific subsidies are recorded as other non-current liabilities upon receipt and are 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. Government subsidies of US $0.1 million and US $7 thousand were received and recognized as other income during the six months ended June 30, 2023 and 2024, respectively. Leases In accordance with ASC 842, Leases ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are calculated as the present value of the lease payments not yet paid. As the rate implicit in the Group’s leases is not typically readily available, the Group uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. This incremental borrowing rate reflects the fixed rate at which the Group could borrow the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. ROU assets include any lease prepayments and are reduced by lease incentives. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease terms are based on the non-cancelable term of the lease and may contain options to extend the lease when it is reasonably certain that the Group will exercise that option. The Group has elected to adopt the following lease policies in conjunction with the adoption of ASU 2016-02: (i) elect for each lease not to separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component; (ii) for leases that have lease terms of 12 months or less and does not include a purchase option that is reasonably certain to exercise, the Group elected not to apply ASC 842 recognition requirements; and (iii) the Group elected to apply the package of practical expedients for existing arrangements entered into prior to January 1, 2022 to not reassess (a) whether an arrangement is or contains a lease, (b) the lease classification. Comprehensive income (loss) Comprehensive income (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 income (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 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 condensed consolidated financial statements. The Group recognizes in the condensed 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 condensed 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; (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. 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 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$1,451,033 and US$1,142,843 for the six months ended June 30, 2023 and 2024, respectively. Concentration of risks Concentration of credit risk As of December 31, 2023 and June 30, 2024, the amount of cash and cash equivalents of US$6,538,253 and US$6,662,939 respectively, were held at major financial institutions located in Mainland China, and US$103,396,004 and US$89,010,848, respectively, were deposited with major financial institutions located outside of Mainland China. Management believes that these financial institutions are of high credit quality and continually monitors the credit worthiness of these financial institutions. Accounts receivable is typically unsecured and denominated in US$ and is derived from revenues earned from customers. The Group manages credit risk of accounts receivable through ongoing monitoring of the outstanding balances. Concentration of suppliers For the six months ended June 30, 2023, there were no suppliers who collectively accounted for more than 10% of the Group’s total research and development services. For the six months ended June 30, 2024, a significant portion of the Group’s research and development services were purchased from one supplier group, who collectively accounted for 15.0% of the Group’s total research and development services purchases. 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 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 of approximately 3.75% and 0.62% in the six months ended June 30, 2023 and 2024, 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$. However, the Group incurs portions of our expenses, and derives revenues, in currencies other than US$, in particular, the 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. New and amended standards adopted by the Group In August 2020, 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 Debt—Debt with Conversion and Other Options New and amended standards not yet adopted by the Group In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures

PREPAYMENTS AND OTHER CURRENT A

PREPAYMENTS AND OTHER CURRENT ASSETS	6 Months Ended
	Jun. 30, 2024
PREPAYMENTS AND OTHER CURRENT ASSETS
PREPAYMENTS AND OTHER CURRENT ASSETS	3. PREPAYMENTS AND OTHER CURRENT ASSETS Prepayments and other current assets consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ 2023 2024 ​ ​ US$ ​ US$ Prepayments 591,383 423,356 Deposits (a) 1,790,637 1,871,670 Others 905,425 804,336 ​ 3,287,445 3,099,362 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 agreements. The Group expects to recover the deposits if the programs fail or the agreements are cancelled.

PROPERTY, EQUIPMENT AND SOFTWAR

PROPERTY, EQUIPMENT AND SOFTWARE, NET	6 Months Ended
	Jun. 30, 2024
PROPERTY, EQUIPMENT AND SOFTWARE, NET
PROPERTY, EQUIPMENT AND SOFTWARE, NET	4. PROPERTY, EQUIPMENT AND SOFTWARE, NET Property, equipment and software consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ 2023 2024 ​ ​ US$ ​ US$ Machinery and laboratory equipment ​ 5,201,479 5,171,471 Leasehold improvements ​ 1,037,675 1,031,254 Electronic equipment ​ 1,818,352 1,815,343 Furniture and tools ​ 42,821 49,509 Vehicles ​ 78,928 78,439 Software ​ 363,943 361,843 Total property, equipment and software ​ 8,543,198 8,507,859 Less: accumulated depreciation and amortization ​ (6,708,077) (7,068,757) Net book value ​ 1,835,121 1,439,102 ​ Depreciation and amortization expenses recognized for the six months ended June 30, 2023 and 2024

ACCRUALS AND OTHER CURRENT LIAB

ACCRUALS AND OTHER CURRENT LIABILITIES	6 Months Ended
	Jun. 30, 2024
ACCRUALS AND OTHER CURRENT LIABILITIES
ACCRUALS AND OTHER CURRENT LIABILITIES	5. ACCRUALS AND OTHER CURRENT LIABILITIES Accrued liabilities and other current liabilities consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ 2023 2024 ​ ​ US$ ​ US$ Professional service fees ​ 1,194,199 1,093,869 Payroll and related liabilities ​ 1,177,301 ​ 952,336 Other taxes and surcharge ​ 510,259 490,249 Others ​ 119,749 122,078 ​ 3,001,508 2,658,532 ​

BORROWINGS

BORROWINGS	6 Months Ended
	Jun. 30, 2024
BORROWINGS
BORROWINGS	6. BORROWINGS ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ 2023 2024 ​ ​ US$ ​ US$ Current ​ ​ ​ Short-term borrowings: ​ ​ ​ Bank loans ​ 4,235,673 4,209,463 Current portion of long-term borrowings ​ 4,161,549 11,765,449 Total current borrowings ​ 8,397,222 15,974,912 Non-Current ​ ​ ​ Long-term borrowings: ​ ​ ​ Bank loans ​ 13,540,034 4,560,251 Total non-current borrowings ​ 13,540,034 4,560,251 Total borrowings ​ 21,937,256 20,535,163 ​ Short-term borrowings In March 2022, the Group borrowed a loan with the amount of RMB9,900,000 from China Merchants Bank Co., Ltd. for a term of one year at the interest rate of 3.90% per annum. The borrowing was repaid in March 2023. In April 2022, the Group borrowed another loan with the amount of RMB20,100,000 from China Merchants Bank Co., Ltd. for a term of one year at the interest rate of 3.70% per annum. The borrowing was repaid in April 2023. In July 2022, the Group borrowed a loan with the amount of RMB20,000,000 from Bank of Jiangsu Co., Ltd. for a term of one year at the interest rate of 3.70% per annum. The borrowing was repaid in July 2023. In December 2022, the Group borrowed another loan with the amount of RMB25,000,000 from China Construction Bank Corporation for a term of one year at the interest rate of 3.65% per annum. The borrowing was repaid in December 2023. In January 2023, the Group borrowed a loan with the amount of RMB10,000,000 from Bank of Ningbo for a term of one year at the interest rate of 3.90% per annum. The borrowing was repaid in January 2024. In March 2023, the Group borrowed a loan with the amount of RMB10,000,000 from China Everbright Bank for a term of one year at the interest rate of 3.80% per annum. The borrowing was repaid in April 2024. In July 2023, the Group borrowed a loan with the amount of RMB10,000,000 from Bank of Ningbo for a term of one year at the interest rate of 3.85% per annum. The borrowing was repaid in July 2024. In June 2024, the Group borrowed a loan with the amount of RMB20,000,000 from China Construction Bank Corporation for a term of one year at the interest rate of 3.50% per annum. Long-term borrowings In September 2020, the Group borrowed a loan with the amount of RMB16,500,000 from Shanghai Pudong Development Bank Co., Ltd. for a term of three years at the interest rate of 4.27% per annum. The Group repaid RMB1,650,000 in 2021,RMB3,850,000 in 2022 and RMB11,000,000 in 2023. The loan was fully repaid in September 2023. In September 2021, the Group borrowed a loan with the amount of RMB8,500,000 from Shanghai Pudong Development Bank Co., Ltd. for a term of three years at the interest rate of 4.05% per annum. The Group repaid RMB425,000 in 2022, RMB850,000 in 2023, and RMB1,225,000 during the six months ended 2024. As of December 31, 2023 and June 30, 2024, RMB7,225,000 and RMB6,000,000 repayable within twelve months for this agreement were classified as “Current portion of long-term borrowing” on the condensed consolidated balance sheets, respectively. In May 2022, the Group borrowed a loan with the amount of RMB30,000,000 from Agricultural Bank of China Limited for a term of three years at the interest rate of 4.00% per annum. The Group repaid RMB3,000,000 in 2023 and RMB5,000,000 during the six months ended 2024. As of December 31, 2023 and June 30, 2024, RMB5,000,000 and RMB22,000,000 repayable within twelve months for this agreement was classified as "Current portion of long - term borrowing" on the condensed consolidated balance sheets, respectively. Also in May 2022, the Group borrowed a loan with the amount of RMB20,000,000 from Shanghai Pudong Development Bank Co., Ltd. for a term of three years at the interest rate of 4.00% per annum. The Group repaid RMB500,000 in 2022, RMB1,500,000 in 2023, and RMB1,000,000 during the six months ended 2024. As of December 31, 2023 and June 30, 2024, RMB9,500,000 and RMB17,000,000 repayable within twelve months for this agreement was classified as “Current portion of long-term borrowing” on the condensed consolidated balance sheets, respectively. In August 2022, the Group borrowed a loan with the amount of RMB9,900,000 from Agricultural Bank of China Limited for a term of three years at the interest rate of 4.00% per annum. The Group repaid RMB1,000,000 in 2023 and made no repayments during the six months ended June 30, 2024. As of December 31, 2023 and June 30, 2024, RMB2,000,000 repayable within twelve months for this agreement was classified as “Current portion of long-term borrowing” on the condensed consolidated balance sheets, respectively. Also in August 2022, the Group borrowed a loan with the amount of RMB20,000,000 from Shanghai Pudong Development Bank Co., Ltd. for a term of In November 2022, the Group borrowed a loan with the amount of RMB9,900,000 from Agricultural Bank of China Limited for a term of Also in November 2022, the Group borrowed a loan with the amount of RMB10,000,000 from Shanghai Pudong Development Bank Co., Ltd. for a term of three years at the interest rate of 4.00% per annum. The Group repaid RMB500,000 in 2023 and RMB500,000 during the six months ended June 30, 2024. As of December 31, 2023 and June 30, 2024, RMB1,000,000 and RMB In April 2023, the Group borrowed a loan with the amount of RMB7,000,000 from Shanghai Pudong Development Bank Co., Ltd. for a term of three years at the interest rate of 3.90% per annum. The Group repaid RMB150,000 in 2023 and RMB200,000 during the six months ended June 30, 2024. As of December 31, 2023 and June 30, 2024, RMB550,000 and RMB700,000 repayable within twelve months for this agreement was classified as “Current portion of long-term borrowing” on the condensed consolidated balance sheets, respectively. In August 2023, the Group borrowed a loan with the amount of RMB10,000,000 from Bank of Jiangsu Co., Ltd. for a term of eighteen months at the interest rate of 3.80% per annum. The Group made no repayments in 2023 and repaid RMB50,000 during the six months ended June 30, 2024. As of December 31, 2023 and June 30, 2024, RMB In September 2023, the Group borrowed another loan with the amount of RMB10,000,000 from Bank of Jiangsu Co., Ltd. for a term of eighteen months at the interest rate of 3.80% per annum. The Group made no repayments in 2023 and repaid RMB50,000 during the six months ended June 30, 2024. As of December 31, 2023 and June 30, 2024, RMB The proceeds from the loans were primarily used to pay for the Group’s research and development activities in China, including CMC costs of clinical and preclinical programs. As of December 31, 2023 and June 30, 2024, none of the Group’s borrowings were collateralized in the respective loan agreements. Future maturities of short-term borrowings and long-term borrowings Future principal maturities of short-term borrowings and long-term borrowings as of June 30, 2024 were as follows: ​ ​ ​ ​ ​ ​ As of June 30, ​ ​ 2024 ​ US$ Remainder of 2024 ​ 2,869,451 2025 ​ 17,244,766 2026 ​ 420,946 ​ ​ 20,535,163 ​

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	6 Months Ended
	Jun. 30, 2024
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION	7. SHARE-BASED COMPENSATION On January 16, 2021, the Company passed a board resolution, pursuant to which the 2021 Performance Incentive Plan (the “2021 Plan”) was adopted. Under the 2021 Plan, an aggregate of 2,994,000 ordinary shares shall be reserved for issuance, and the share limit shall 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 January 7, 2022, the Company passed a board resolution, pursuant to which the vesting schedules and conditions of 2,060,308 share options granted to certain employees were modified. Share options as to which the applicable performance milestones have been met are no longer subject to the time-based vesting requirement. The share options vested (or to be vested) for each year (commencing from 2021) shall be equal to the lesser of (i) 25% of the total number of share options of each grantee (“Annual Cap”) and (ii) the number of shares as determined by the Compensation Committee based on the extent to which any performance milestones were achieved during that year (“Credited Shares”), plus any Credited Share of earlier years that have not previously vested due to the Annual Cap. In addition, the performance milestones applicable to the share options that remain outstanding were also modified. From April 12, 2023 to June 30, 2023, pursuant to the 2021 Plan, a total of 1,679,000 share options were granted to certain employees, with exercise price ranging from US$0.94 to US$1.08. In addition, 425,905 ordinary shares were issued to certain management personnel in January 2023 pursuant to the 2021 Plan and 156,725 ordinary shares were issued to certain employees as stock bonus in April 2023. From January 24, 2024 to June 30, 2024, pursuant to the 2021 Plan, a total of 100,000 share options were granted to certain employee and external directors, with exercise price ranging from US$2.26 to US$3.07. As of June 30, 2023 and June 30, 2024, among all the share options granted to date, 4,776,906 and 4,826,906 share options contained both service conditions and performance conditions, respectively. All other share options granted contain only service conditions. The following table sets forth the share options activities for the six months ended June 30, 2023 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ‑ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ Weighted ​ ​ ​ ​ ​ ​ Weighted ‑ ​ Grant ​ Average ​ ​ ​ ​ ​ ​ Average ​ Date ​ Remaining ​ Aggregate ​ ​ Number of ​ Exercise ​ Fair ​ Contractual ​ Intrinsic ​ Options Price Value Term Value ​ ​ ​ ​ US$ per ​ US$ per ​ ​ ​ ​ ​ ​ ​ ​ option ​ option ​ Years ​ US$ Outstanding at December 31, 2022 ​ 6,286,912 4.80 5.16 8.44 94,990 Granted ​ 1,679,000 1.04 0.69 — — Exercised ​ (10,000) 0.55 5.72 — — Forfeited ​ (336,024) ​ 3.77 ​ 3.86 ​ — ​ — Outstanding at June 30, 2023 ​ 7,619,888 ​ 4.02 ​ 4.23 ​ 8.36 ​ 470,083 Outstanding at December 31, 2023 ​ 8,766,882 3.39 3.60 8.24 2,011,843 Granted ​ 100,000 ​ 2.67 ​ 1.57 ​ — ​ — Exercised ​ (72,641) ​ 0.86 ​ 3.45 ​ — ​ — Forfeited ​ (144,314) ​ 9.26 ​ 6.36 ​ — ​ — Outstanding at June 30, 2024 ​ 8,649,927 ​ 3.30 ​ 3.53 ​ 7.79 ​ 6,937,921 Vested and expected to vest at June 30, 2024 ​ 8,649,927 ​ 3.30 ​ 3.53 ​ 7.79 ​ 6,937,921 Exercisable at June 30, 2023 ​ 2,321,860 ​ 6.44 ​ 6.85 ​ 7.19 ​ 62,724 Exercisable at June 30, 2024 ​ 2,951,207 ​ 4.93 ​ 5.84 ​ 6.64 ​ 1,681,415 ​ 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 six months ended June 30, 2023 and 2024 was US$3,920,616 and US$2,761,089, respectively. As of June 30, 2024, the total unrecognized employee share-based compensation expense was US$14,106,385, all of which may be adjusted for actual forfeitures occurring in the future. Total unrecognized compensation cost will be recognized over a weighted - average period of 1.20 years as of June 30, 2024. Fair value of share options The fair value of share options was determined using the binomial option valuation model, with the assistance from an independent third-party appraiser. The binomial model requires the input of highly subjective assumptions, including the expected volatility, the exercise multiple, the risk-free rate and the dividend yield. For expected volatility, the Group has made reference to historical volatility of several comparable companies in the same industry. The exercise multiple was estimated as the average ratio of the stock price to the exercise price of when employees would decide to voluntarily exercise their vested share options. The risk-free rate for periods within the contractual life of the share options is based on the market yield of U.S. Treasury Bonds in effect at the time of grant. The dividend yield is based on the expected dividend policy over the contractual life of the share options. The assumptions used to estimate the fair value of the share options granted were as follows: ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended ​ ​ June 30, ​ 2023 2024 Risk‑free interest rate 3.38% - 3.72% ​ 4.18% - 4.42% Dividend yield 0% ​ 0% Expected volatility range 73.6% -74.1% ​ 73.3% - 73.6% Exercise multiple 2.2 - 2.8 ​ 2.2 - 2.8 Contractual life 10 years ​ 10 years ​ Total share-based compensation expenses recognized for the six months ended June 30, 2023 and 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, ​ 2023 2024 ​ ​ US$ ​ US$ Research and development expenses 2,706,745 1,724,112 Administrative expenses 1,323,469 752,996 Total share‑based compensation expenses 4,030,214 2,477,108 ​

COLLABORATION ARRANGEMENTS

COLLABORATION ARRANGEMENTS	6 Months Ended
	Jun. 30, 2024
COLLABORATION ARRANGEMENTS
COLLABORATION ARRANGEMENTS	8. 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. Prior to 2023, the Group received RMB10,000,000 (equivalent to approximately US$1,511,168) upfront fee upon the effectiveness of the agreement from Sanjin Parties, which was recognized as revenue as the performance obligation was satisfied by the Group. No additional revenue related to this agreement has been recognized during the six months ended June 30, 2023 and 2024. 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 the Group’s 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 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 remote. 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. The risk of failure is considered remote upon recognition of revenue. Prior to 2023, the Group received upfront fee of RMB4,000,000 (equivalent to approximately US$620,011) received, and milestone fee of RMB4,000,000 (equivalent to approximately US$620,011), which were recognized as licensing revenue as the performance obligation was satisfied by the Group and certain milestone events were achieved. No additional revenue was recognized for the six months ended June 30, 2023 and 2024. Exelixis, Inc. Agreements In February 2021, the Group entered into a collaboration and license agreement (the “Exelixis Agreement”) with Exelixis, Inc. (“Exelixis”), pursuant to which the Group agreed to generate masked antibodies with its SAFEbody technology against an initial target selected and a second target to be selected by Exelixis. The Group will generate masked antibodies in the form of alternative compounds in accordance with the program plan for each target at its own cost and deliver the related data packages to Exelixis. Exelixis will select lead compounds (the “Lead Compounds”) to further develop, obtain regulatory approval and commercialize product(s) for each target (the “Products under the Exelixis Agreement”). Under the Exelixis Agreement, the Group will also grant Exelixis an exclusive, worldwide, sublicensable license (the “Adagene License”) upon delivery of the data package to research, develop, make, have made, sell, offer for sale, import and commercialize products containing the masked antibodies to be generated by the Group with respect to both targets. Exelixis will own the inventions relating to the Lead Compounds arising in connection with the Exelixis Agreement. The Exelixis Agreement will remain effective until the expiration of the defined royalty terms of the Products under the Exelixis Agreement, unless terminated by either party. Exelixis may terminate the Exelixis Agreement for any or no reason, in its entirety or on a target-by-target basis. Any payment received by the Group before the termination shall be non-refundable. Under the Exelixis Agreement, Exelixis agreed to pay the Group an upfront non-refundable fee of US$11,000,000. For each target, the Group will be eligible to receive up to US$127,500,000 of milestone payments conditioned upon achieving certain development and regulatory approval milestones, and up to $262,500,000 of sales-based milestone payments. In addition, the Group is also entitled to royalties of mid-single-digit percentage in respect of the aggregate annual net sales of the products developed under the Exelixis Agreement worldwide, subject to certain reductions. In April 2022, the Group entered in a letter agreement (the “Exelixis Letter Agreement”) in reference to the Exelixis Agreement with Exelixis for expanded collaboration in SAFEbody discovery. Under the Exelixis Letter Agreement, the Group will generate additional masked antibodies against the target selected by Exelixis per the Exelixis Agreement. Exelixis agreed to pay the Group an additional upfront non-refundable fee of US$1,100,000. The Group determined that generating masked antibodies with its SAFEbody technology is reflective of a vendor-customer relationship and therefore within the scope of ASC 606. Under the Exelixis Agreement, the delivery of data packages for each target, along with the Adagene License used to develop the related compounds, represents one performance obligation, as they are not distinct from each other. Transaction price is allocated to each one of the two performance obligations using the relative standalone selling price method. The Group records revenue at a point in time, when the data packages for each target were delivered to Exelixis. Considering that the development, regulatory and sales-based milestone payments and the royalties are constrained, the transaction price shall initially only include upfront payment and the milestone payments that are considered probable. Subsequently, once the uncertainty associated with the milestone payments is resolved, the milestone payments shall be included in the total transaction price when it is no longer probable that a significant reversal of cumulative revenue would occur in future periods. The sales-based royalty and sales-based milestones promised in exchange for the Adagene License granted are recognized when (or as) the later of (1) the subsequent sale or usage occurs, or (2) the performance obligation to which some or all of the sales-based royalty or sales-based milestones being allocated has been satisfied (or partially satisfied). Prior to 2023, the Group received US$11,000,000 upfront payment upon execution of the Exelixis Agreement, US$1,100,000 upfront payment under the Exelixis Letter Agreement, and milestone fee of US$3,000,000 related to the successful nomination of lead SAFEbody candidates for the initial target under the Exelixis Agreement. A total of US$8,500,000, including US$5,500,000 of upfront fee and US$3,000,000 of milestone fee, was recognized as revenue upon delivery of data packages and achievement of the milestone event for the initial target under the Exelixis Agreement. During the six months ended June 30, 2023, the Group received US$3,000,000 milestone payment, which corresponds to the successful nomination of lead SAFEbody candidates for the second target under the Exelixis Agreement. A total of US$9,600,000 was recognized as revenue during the six months ended June 30, 2023, including a) US$8,500,000, composing US$5,500,000 of upfront fee and US$3,000,000 of milestone fee, upon delivery of data packages and achievement of the milestone event for the second target under the Exelixis Agreement, and b) US$1,100,000 upon delivery of additional masked antibodies under the Exelixis Letter Agreement. No additional revenue was recognized during the six months ended June 30, 2024. Sanofi Agreement In March 2022, the Group entered into a collaboration and license agreement (the “Sanofi Agreement”) with Genzyme Corporation, a wholly-owned subsidiary of Sanofi (“Sanofi”), pursuant to which the Group agreed to perform early-stage research activities to develop masked versions of Sanofi candidate antibodies (each a “Target”, and together, “Targets”), using Adagene’s SAFEbody technology for development and commercialization by Sanofi. Sanofi has the ability to advance two initial Targets in the collaboration, followed by an option for two additional Targets. The Group will generate masked antibodies in the form of customized compounds and complete the compound research activities in accordance with the program plan for each Target at its own cost and deliver the compounds and related data packages to Sanofi. Sanofi is solely responsible for later stage research and all clinical, product development and commercialization activities. Under the Sanofi Agreement, the Group granted Sanofi an exclusive, worldwide, sublicensable license to research, develop, use, make, have made, sell, offer for sale, import and commercialize products containing the masked antibodies to be generated by the Group. The Sanofi Agreement will remain effective until the expiration of the defined royalty on a product-by-product and country-by-country basis, unless terminated earlier with cause or by mutual agreements of both parties. Sanofi may terminate the Sanofi Agreement without cause, in its entirety, or on a Target-by-Target or country-by-country basis. Under the Sanofi Agreement, Sanofi agreed to pay the Group an upfront non-refundable fee of US$17,500,000 in consideration of the license granted and the early-stage research activities to generate the compounds. Sanofi is obligated to pay an additional fee if Sanofi exercises the option for additional Targets. For each Target, the Group will be eligible to receive up to US$173,500,000 of milestone payments conditioned upon achieving certain development and regulatory approval milestones, and up to US$450,000,000 of sales-based milestone payments. In addition, the Group is also entitled to royalties of mid-single-digit percentage in respect of the aggregate annual net sales of the products developed under the Sanofi Agreement worldwide, subject to certain reductions. The Group then determined that this collaboration is more reflective of a vendor-customer relationship and therefore within the scope of ASC 606. Under the Sanofi Agreement, the performance of early-stage research activities to develop compounds for each Target, along with the grant of the license, represents one performance obligation, as they are not distinct from each other. Transaction price is allocated to each one of the two performance obligations based on the relative standalone selling price. Since the early-stage research activities does not generate an asset for alternative use and the Group has an enforceable right to the upfront payment, the Group records revenue over time using labor hour as the input to assess the satisfaction of the performance obligations. Considering that the development, regulatory and sales-based milestone payments and the royalties are constrained, the transaction price shall initially only include upfront payment and the milestone payments that are considered probable. Subsequently, once the uncertainty associated with the milestone payments is resolved, the milestone payments shall be included in the total transaction price when it is no longer probable that a significant reversal of cumulative revenue would occur in future periods. The sales-based royalty and sales-based milestones promised in exchange for the license granted are recognized when (or as) the later of (1) the subsequent sale or usage occurs, or (2) the performance obligation to which some or all of the sales-based royalty or sales-based milestones being allocated has been satisfied (or partially satisfied). The Group received US$17,500,000 upfront payment under the Sanofi Agreement prior to 2023, all of which were recognized as revenue over time during the years ended in December 31, 2022 and 2023 using the input method. For the six months ended June 30, 2023, US$7,694,360 was recognized as revenue as performance obligation had been satisfied over time. For the six months ended June 30, 2024, no additional revenue was recognized.

INCOME TAX EXPENSE

INCOME TAX EXPENSE	6 Months Ended
	Jun. 30, 2024
INCOME TAX EXPENSE
INCOME TAX EXPENSE	9. INCOME TAX EXPENSE The income tax expense and the effective income tax rate resulting from operations were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, ​ 2023 2024 ​ ​ US$ ​ US$ Loss before income tax (1,795,670) (17,010,328) ​ Income tax expense 2,313,136 1,388 ​ Effective income tax rate (128.82) % (0.01) % ​ The change in the effective income tax rate for the six months ended June 30, 2024 compared with the six months ended June 30, 2023 is primarily due to changes to income before income tax, jurisdictional mix of income before income tax, and valuation allowances.

NET LOSS PER SHARE

NET LOSS PER SHARE	6 Months Ended
	Jun. 30, 2024
NET LOSS PER SHARE
NET LOSS PER SHARE	10. NET LOSS PER SHARE Basic and diluted net loss per share for the six months ended June 30, 2023 and 2024 were calculated as follows: ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, ​ ​ 2023 ​ 2024 ​ US$ US$ Numerator: Net loss attributable to Adagene Inc.’s shareholders (4,108,806) (17,011,716) Net loss attributable to ordinary shareholders (4,108,806) (17,011,716) Denominator: Weighted‑average number of ordinary shares outstanding—basic and diluted 54,604,787 55,213,051 Net Loss per share—basic and diluted (0.08) (0.31) ​ The effects of all outstanding share options have been excluded from the computation of diluted loss per share for the six months ended June 30, 2023 and 2024 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 Six Months Ended June 30, ​ 2023 2024 Incremental shares on share options and share grant 50,770 1,305,736 ​

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2024
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	11. RELATED PARTY TRANSACTIONS a) Related Parties ​ ​ ​ ​ Name of related parties Relationship Peter Luo Chairman, Chief Executive Officer and a principal shareholder of the Company Certain senior management personnel Management and ordinary shareholders of the Company WuXi AppTec Co., Ltd. (“WuXi AppTec Group”) A principal shareholder of the Company WuXi Biologics (Cayman) Inc. Controlled by the ultimate controlling party of a principal shareholder of the Company ​ b) The Group had the following related party balances as of December 31, 2023 and June 30, 2024: ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ ​ 2023 ​ 2024 ​ US$ US$ WuXi AppTec Group 118,594 28,388 WuXi Biologics (Cayman) Inc. 102,416 — Certain senior management personnel ​ 1,017 ​ 3,031 Total amounts due from related parties 222,027 31,419 ​ As of December 31, 2023 and June 30, 2024, the amounts due from related parties mainly represented prepayments made for the CRO and CDMO services. ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ ​ 2023 ​ 2024 ​ US$ US$ WuXi Biologics (Cayman) Inc. 16,371,593 16,863,078 WuXi AppTec Group 341,716 470,848 Certain senior management personnel. ​ 1,017 ​ — Total amounts due to related parties 16,714,326 17,333,926 ​ As of December 31, 2023 and June 30, 2024, the amounts due to related parties mainly represented payables for the CRO and CDMO services. ​ c) The Group had the following related party transactions during the six months ended June 30, 2023 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended ​ ​ June 30, ​ ​ 2023 ​ 2024 ​ US$ US$ WuXi Biologics (Cayman) Inc. 1,358,372 715,995 WuXi AppTec Group 429,739 244,590 Certain senior management personnel ​ — ​ 6,080 ​ 1,788,111 966,665 ​ For the six months ended June 30, 2023 and 2024, the transactions with related parties mainly represented expenses incurred for receipt of CRO and CDMO services.

LEASES

LEASES	6 Months Ended
	Jun. 30, 2024
LEASES
LEASES	12. LEASES As of December 31, 2023 and June 30, 2024, the Group had operating leases recorded on its condensed consolidated balance sheets for certain office spaces that expire on various dates through 2026. The Group’s lease arrangements have no renewal options, rent escalation clauses, restrictions or contingent rents and are all executed with third parties. All of the Group’s leases qualify as operating leases. Information related to operating leases as of December 31, 2023 and June 30, 2024 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ ​ 2023 2024 ​ ​ US$ ​ ​ ​ Assets ​ ​ Operating lease right-of-use assets 365,103 ​ 254,048 ​ Liabilities ​ ​ ​ ​ Current portion of operating lease liabilities 195,955 ​ 141,281 ​ Operating lease liabilities 173,660 ​ 114,086 ​ Weighted average remaining lease term (years) 2.1 ​ 1.8 ​ Weighted average discount rate ​ 4.4 % 4.1 % ​ Information related to operating lease activity during the six months ended June 30, 2023 and 2024 is as follows: ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, ​ ​ 2023 2024 ​ ​ US$ US$ Operating lease rental expense ​ Amortization of right-of-use assets 108,565 ​ 109,251 Expense for short-term leases within 12 months 6,669 ​ 6,778 Interest of lease liabilities 5,130 ​ 6,889 ​ 120,364 ​ 122,918 ​ Maturities of lease liabilities were as follows: ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ ​ 2023 2024 ​ ​ US$ ​ ​ Remainder of 2024 207,155 ​ 87,048 2025 ​ 123,546 ​ 122,782 2026 ​ 55,499 ​ 55,156 Total undiscounted lease payments 386,200 ​ 264,986 Less: imputed interest (16,585) ​ (9,619) Total lease liabilities 369,615 ​ 255,367 ​

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2024
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	13. COMMITMENTS AND CONTINGENCIES 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.

TREASURY SHARES

TREASURY SHARES	6 Months Ended
	Jun. 30, 2024
TREASURY SHARES
TREASURY SHARES	14. TREASURY SHARES The Group accounts for treasury shares using the cost method. Under this method, the cost incurred to purchase the shares is recorded in the treasury shares account in the condensed consolidated balance sheets. At retirement, the ordinary shares account is charged only for the aggregate par value of the shares. The excess of the acquisition cost of treasury shares over the aggregate par value is recorded entirely in additional paid-in capital (up to the amount credited to the additional paid-in capital upon original issuance of the shares). In the event that treasury share is reissued at an amount different from the cost the Group paid to repurchase the treasury share, the Group will recognize the difference in additional paid-in capital by using the specified identification method. During the six months ended June 30, 2023 and 2024, no shares were repurchased or retired. As of December 31, 2023 and June 30, 2024, there was 1 ADS (1 ordinary share) held as treasury share, respectively. ​

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2024
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation	Basis of presentation The interim unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary for the fair statement of results for the periods presented, have been included. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period. The comparative year-end condensed balance sheet data was derived from the annual audited consolidated financial statements but is condensed to the same degree as the interim condensed balance sheet data. The interim unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users have read or have access to the annual audited consolidated financial statements filed on March 29, 2024. Principal accounting policies followed by the Company in the preparation of the accompanying condensed consolidated financial statements are summarized below. References to specific U.S. GAAP principles throughout these notes to the accompanying financial statements are to the Accounting Standards Codification (“ASC”), as published by the U.S. Financial Accounting Standards Board (“FASB”).
Principles of Consolidation	Principles of Consolidation The condensed 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 condensed 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 condensed consolidated financial statements include, but are not limited to, licensing and collaboration revenue recognition, research and development expense allocation, the useful lives and impairment of long-lived assets, tax valuation allowance, share-based compensation expenses, and measurement of right-of-use assets and lease liabilities. 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, Adagene PTE. Ltd. and Adagene Project C1 PTE. Ltd. is the United States dollar (“US$”). The functional currency of the Company’s PRC subsidiary is Renminbi (“RMB”). The functional currency of the Company’s Australian subsidiary is Australian dollar (“AU$”). The functional currency of the Company’s Swiss subsidiary is Swiss Franc (“CHF”). The determination of the respective functional currency is based on the criteria stated in ASC 830, Foreign Currency Matters 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 condensed 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 reporting period. Translation adjustments are reported as accumulated comprehensive loss and are shown as a separate component of other comprehensive loss in the condensed 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 consist primarily of investments in money market funds, which are measured at fair value and are expected to be redeemed within one year. As of June 30, 2024 and December 31, 2023, there were no short-term investments held by the Group.
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 is carried at net realizable value. The allowance for credit losses reflects the best estimate of future losses over the contractual life of outstanding accounts receivable and is determined on the basis of historical experience, specific allowances for known troubled accounts, other currently available information including customer financial condition, and both current and forecasted economic conditions.
Fair value measurements	Fair value measurements The Group applies ASC 820, Fair Value Measurements and Disclosures Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—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, 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. The Group did not transfer any assets or liabilities in or out of Level 3 during the year ended December 31, 2023 or during the six months ended June 30, 2024. The Group had no financial assets and liabilities measured and recorded at fair value on a nonrecurring basis as of December 31, 2023 and June 30, 2024.
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 are 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 condensed 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 six months ended June 30, 2023 and 2024.
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 a substantial portion of the Group’s long-lived assets are located in the PRC with the exception of certain laboratory and electronic equipment which are located in the U.S.
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 Revenue from Contracts with Customers 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: Research and Development Services Milestone Payments: Royalties: 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.
Other operating income, net	Other operating income, net Other operating income, net included a one-time compensation payment from a contract manufacturer in relation to the Group’s losses for a preclinical-related outsourcing arrangement.
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 development and manufacturing organizations (“CDMO”), 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, and (4) other research and development expenses. Research and development costs are expensed as incurred when the related research and development services are provided to the Group and the resulting assets, if any, have no alternative future uses. As of December 31, 2023 and June 30, 2024, the Group had several ongoing clinical studies in various clinical trial stages. The contracts with CRO and CDMO are generally cancellable, with notice, at the Group’s option. The Group did not record any accrued expenses related to cancellation of CRO or CDMO contracts as of December 31, 2023 or June 30, 2024 as the Group did not have any plan to cancel the existing CRO or CDMO 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. These specific subsidies are recorded as other non-current liabilities upon receipt and are 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. Government subsidies of US $0.1 million and US $7 thousand were received and recognized as other income during the six months ended June 30, 2023 and 2024, respectively.
Leases	Leases In accordance with ASC 842, Leases ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are calculated as the present value of the lease payments not yet paid. As the rate implicit in the Group’s leases is not typically readily available, the Group uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. This incremental borrowing rate reflects the fixed rate at which the Group could borrow the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. ROU assets include any lease prepayments and are reduced by lease incentives. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease terms are based on the non-cancelable term of the lease and may contain options to extend the lease when it is reasonably certain that the Group will exercise that option. The Group has elected to adopt the following lease policies in conjunction with the adoption of ASU 2016-02: (i) elect for each lease not to separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component; (ii) for leases that have lease terms of 12 months or less and does not include a purchase option that is reasonably certain to exercise, the Group elected not to apply ASC 842 recognition requirements; and (iii) the Group elected to apply the package of practical expedients for existing arrangements entered into prior to January 1, 2022 to not reassess (a) whether an arrangement is or contains a lease, (b) the lease classification.
Comprehensive income (loss)	Comprehensive income (loss) Comprehensive income (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 income (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 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 condensed consolidated financial statements. The Group recognizes in the condensed 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 condensed 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; (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. 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 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$1,451,033 and US$1,142,843 for the six months ended June 30, 2023 and 2024, respectively.
Concentration of risks	Concentration of risks Concentration of credit risk As of December 31, 2023 and June 30, 2024, the amount of cash and cash equivalents of US$6,538,253 and US$6,662,939 respectively, were held at major financial institutions located in Mainland China, and US$103,396,004 and US$89,010,848, respectively, were deposited with major financial institutions located outside of Mainland China. Management believes that these financial institutions are of high credit quality and continually monitors the credit worthiness of these financial institutions. Accounts receivable is typically unsecured and denominated in US$ and is derived from revenues earned from customers. The Group manages credit risk of accounts receivable through ongoing monitoring of the outstanding balances. Concentration of suppliers For the six months ended June 30, 2023, there were no suppliers who collectively accounted for more than 10% of the Group’s total research and development services. For the six months ended June 30, 2024, a significant portion of the Group’s research and development services were purchased from one supplier group, who collectively accounted for 15.0% of the Group’s total research and development services purchases. 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 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 of approximately 3.75% and 0.62% in the six months ended June 30, 2023 and 2024, 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$. However, the Group incurs portions of our expenses, and derives revenues, in currencies other than US$, in particular, the 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. New and amended standards adopted by the Group In August 2020, 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 Debt—Debt with Conversion and Other Options New and amended standards not yet adopted by the Group In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures

ORGANIZATION AND BASIS OF PRE_2

ORGANIZATION AND BASIS OF PRESENTATION (Tables)	6 Months Ended
	Jun. 30, 2024
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, and research and development of innovative medicines 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 Adagene Project C1 PTE. Ltd. ​ March 25, 2022 Singapore 100 % Research and development of innovative medicines ​

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Jun. 30, 2024
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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

PREPAYMENTS AND OTHER CURRENT_2

PREPAYMENTS AND OTHER CURRENT ASSETS (Tables)	6 Months Ended
	Jun. 30, 2024
PREPAYMENTS AND OTHER CURRENT ASSETS
Summary of prepayments and other current assets	​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ 2023 2024 ​ ​ US$ ​ US$ Prepayments 591,383 423,356 Deposits (a) 1,790,637 1,871,670 Others 905,425 804,336 ​ 3,287,445 3,099,362 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 agreements. The Group expects to recover the deposits if the programs fail or the agreements are cancelled.

PROPERTY, EQUIPMENT AND SOFTW_2

PROPERTY, EQUIPMENT AND SOFTWARE, NET (Tables)	6 Months Ended
	Jun. 30, 2024
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Summary of property, equipment and software	​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ 2023 2024 ​ ​ US$ ​ US$ Machinery and laboratory equipment ​ 5,201,479 5,171,471 Leasehold improvements ​ 1,037,675 1,031,254 Electronic equipment ​ 1,818,352 1,815,343 Furniture and tools ​ 42,821 49,509 Vehicles ​ 78,928 78,439 Software ​ 363,943 361,843 Total property, equipment and software ​ 8,543,198 8,507,859 Less: accumulated depreciation and amortization ​ (6,708,077) (7,068,757) Net book value ​ 1,835,121 1,439,102

ACCRUALS AND OTHER CURRENT LI_2

ACCRUALS AND OTHER CURRENT LIABILITIES (Tables)	6 Months Ended
	Jun. 30, 2024
ACCRUALS AND OTHER CURRENT LIABILITIES
Summary of accrued liabilities and other current liabilities	​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ 2023 2024 ​ ​ US$ ​ US$ Professional service fees ​ 1,194,199 1,093,869 Payroll and related liabilities ​ 1,177,301 ​ 952,336 Other taxes and surcharge ​ 510,259 490,249 Others ​ 119,749 122,078 ​ 3,001,508 2,658,532 ​

BORROWINGS (Tables)

BORROWINGS (Tables)	6 Months Ended
	Jun. 30, 2024
BORROWINGS
Schedule of borrowings	​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ 2023 2024 ​ ​ US$ ​ US$ Current ​ ​ ​ Short-term borrowings: ​ ​ ​ Bank loans ​ 4,235,673 4,209,463 Current portion of long-term borrowings ​ 4,161,549 11,765,449 Total current borrowings ​ 8,397,222 15,974,912 Non-Current ​ ​ ​ Long-term borrowings: ​ ​ ​ Bank loans ​ 13,540,034 4,560,251 Total non-current borrowings ​ 13,540,034 4,560,251 Total borrowings ​ 21,937,256 20,535,163
Schedule of future maturities of short-term borrowings and long-term borrowings	​ ​ ​ ​ ​ ​ As of June 30, ​ ​ 2024 ​ US$ Remainder of 2024 ​ 2,869,451 2025 ​ 17,244,766 2026 ​ 420,946 ​ ​ 20,535,163 ​

SHARE-BASED COMPENSATION (Table

SHARE-BASED COMPENSATION (Tables)	6 Months Ended
	Jun. 30, 2024
SHARE-BASED COMPENSATION
Summary of stock option activity	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ‑ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ Weighted ​ ​ ​ ​ ​ ​ Weighted ‑ ​ Grant ​ Average ​ ​ ​ ​ ​ ​ Average ​ Date ​ Remaining ​ Aggregate ​ ​ Number of ​ Exercise ​ Fair ​ Contractual ​ Intrinsic ​ Options Price Value Term Value ​ ​ ​ ​ US$ per ​ US$ per ​ ​ ​ ​ ​ ​ ​ ​ option ​ option ​ Years ​ US$ Outstanding at December 31, 2022 ​ 6,286,912 4.80 5.16 8.44 94,990 Granted ​ 1,679,000 1.04 0.69 — — Exercised ​ (10,000) 0.55 5.72 — — Forfeited ​ (336,024) ​ 3.77 ​ 3.86 ​ — ​ — Outstanding at June 30, 2023 ​ 7,619,888 ​ 4.02 ​ 4.23 ​ 8.36 ​ 470,083 Outstanding at December 31, 2023 ​ 8,766,882 3.39 3.60 8.24 2,011,843 Granted ​ 100,000 ​ 2.67 ​ 1.57 ​ — ​ — Exercised ​ (72,641) ​ 0.86 ​ 3.45 ​ — ​ — Forfeited ​ (144,314) ​ 9.26 ​ 6.36 ​ — ​ — Outstanding at June 30, 2024 ​ 8,649,927 ​ 3.30 ​ 3.53 ​ 7.79 ​ 6,937,921 Vested and expected to vest at June 30, 2024 ​ 8,649,927 ​ 3.30 ​ 3.53 ​ 7.79 ​ 6,937,921 Exercisable at June 30, 2023 ​ 2,321,860 ​ 6.44 ​ 6.85 ​ 7.19 ​ 62,724 Exercisable at June 30, 2024 ​ 2,951,207 ​ 4.93 ​ 5.84 ​ 6.64 ​ 1,681,415
Summary of assumptions used to estimate the fair value of the share options granted	​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended ​ ​ June 30, ​ 2023 2024 Risk‑free interest rate 3.38% - 3.72% ​ 4.18% - 4.42% Dividend yield 0% ​ 0% Expected volatility range 73.6% -74.1% ​ 73.3% - 73.6% 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 Six Months Ended June 30, ​ 2023 2024 ​ ​ US$ ​ US$ Research and development expenses 2,706,745 1,724,112 Administrative expenses 1,323,469 752,996 Total share‑based compensation expenses 4,030,214 2,477,108 ​

INCOME TAX EXPENSE (Tables)

INCOME TAX EXPENSE (Tables)	6 Months Ended
	Jun. 30, 2024
INCOME TAX EXPENSE
Schedule of components of income tax expense	​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, ​ 2023 2024 ​ ​ US$ ​ US$ Loss before income tax (1,795,670) (17,010,328) ​ Income tax expense 2,313,136 1,388 ​ Effective income tax rate (128.82) % (0.01) %

NET LOSS PER SHARE (Tables)

NET LOSS PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2024
NET LOSS PER SHARE
Schedule of basic and diluted net loss per share	​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, ​ ​ 2023 ​ 2024 ​ US$ US$ Numerator: Net loss attributable to Adagene Inc.’s shareholders (4,108,806) (17,011,716) Net loss attributable to ordinary shareholders (4,108,806) (17,011,716) Denominator: Weighted‑average number of ordinary shares outstanding—basic and diluted 54,604,787 55,213,051 Net Loss per share—basic and diluted (0.08) (0.31)
Schedule of potentially dilutive securities that are not included in the calculation of diluted net loss per share	​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, ​ 2023 2024 Incremental shares on share options and share grant 50,770 1,305,736 ​

RELATED PARTY TRANSACTIONS (Tab

RELATED PARTY TRANSACTIONS (Tables)	6 Months Ended
	Jun. 30, 2024
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 Certain senior management personnel Management and ordinary shareholders of the Company WuXi AppTec Co., Ltd. (“WuXi AppTec Group”) A principal shareholder of the Company WuXi Biologics (Cayman) Inc. Controlled by the ultimate controlling party of a principal shareholder of the Company ​ b) The Group had the following related party balances as of December 31, 2023 and June 30, 2024: ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ ​ 2023 ​ 2024 ​ US$ US$ WuXi AppTec Group 118,594 28,388 WuXi Biologics (Cayman) Inc. 102,416 — Certain senior management personnel ​ 1,017 ​ 3,031 Total amounts due from related parties 222,027 31,419 ​ As of December 31, 2023 and June 30, 2024, the amounts due from related parties mainly represented prepayments made for the CRO and CDMO services. ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ ​ 2023 ​ 2024 ​ US$ US$ WuXi Biologics (Cayman) Inc. 16,371,593 16,863,078 WuXi AppTec Group 341,716 470,848 Certain senior management personnel. ​ 1,017 ​ — Total amounts due to related parties 16,714,326 17,333,926 ​ As of December 31, 2023 and June 30, 2024, the amounts due to related parties mainly represented payables for the CRO and CDMO services. ​ c) The Group had the following related party transactions during the six months ended June 30, 2023 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended ​ ​ June 30, ​ ​ 2023 ​ 2024 ​ US$ US$ WuXi Biologics (Cayman) Inc. 1,358,372 715,995 WuXi AppTec Group 429,739 244,590 Certain senior management personnel ​ — ​ 6,080 ​ 1,788,111 966,665

LEASES (Tables)

LEASES (Tables)	6 Months Ended
	Jun. 30, 2024
LEASES
Summary of information related to operating leases	​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ ​ 2023 2024 ​ ​ US$ ​ ​ ​ Assets ​ ​ Operating lease right-of-use assets 365,103 ​ 254,048 ​ Liabilities ​ ​ ​ ​ Current portion of operating lease liabilities 195,955 ​ 141,281 ​ Operating lease liabilities 173,660 ​ 114,086 ​ Weighted average remaining lease term (years) 2.1 ​ 1.8 ​ Weighted average discount rate ​ 4.4 % 4.1 %
Summary of information related to operating lease activity	​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, ​ ​ 2023 2024 ​ ​ US$ US$ Operating lease rental expense ​ Amortization of right-of-use assets 108,565 ​ 109,251 Expense for short-term leases within 12 months 6,669 ​ 6,778 Interest of lease liabilities 5,130 ​ 6,889 ​ 120,364 ​ 122,918
Summary of maturities of lease liabilities	​ ​ ​ ​ ​ ​ ​ As of December 31, ​ As of June 30, ​ ​ 2023 2024 ​ ​ US$ ​ ​ Remainder of 2024 207,155 ​ 87,048 2025 ​ 123,546 ​ 122,782 2026 ​ 55,499 ​ 55,156 Total undiscounted lease payments 386,200 ​ 264,986 Less: imputed interest (16,585) ​ (9,619) Total lease liabilities 369,615 ​ 255,367 ​

ORGANIZATION AND BASIS OF PRE_3

ORGANIZATION AND BASIS OF PRESENTATION (Details)	Jun. 30, 2024	Feb. 11, 2021
IPO | American depositary shares
ORGANIZATION AND BASIS OF PRESENTATION
Number of ordinary shares represented by each ADS		1.25
Adagene (Hong Kong) Limited
ORGANIZATION AND BASIS OF PRESENTATION
Percentage of legal ownership by the Company	100%
Adagene Incorporated
ORGANIZATION AND BASIS OF PRESENTATION
Percentage of legal ownership by the Company	100%
Adagene (Suzhou) Limited
ORGANIZATION AND BASIS OF PRESENTATION
Percentage of legal ownership by the Company	100%
Adagene Australia PTY Ltd.
ORGANIZATION AND BASIS OF PRESENTATION
Percentage of legal ownership by the Company	100%
Adagene PTE. Ltd.
ORGANIZATION AND BASIS OF PRESENTATION
Percentage of legal ownership by the Company	100%
Adagene AG
ORGANIZATION AND BASIS OF PRESENTATION
Percentage of legal ownership by the Company	100%
Adagene Project C1 PTE. Ltd.
ORGANIZATION AND BASIS OF PRESENTATION
Percentage of legal ownership by the Company	100%

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Details) - Nonrecurring basis - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Fair value measurements
Financial assets	$ 0	$ 0
Financial liabilities	$ 0	$ 0

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, equipment and software (Details)	Jun. 30, 2024
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration]	us-gaap:UsefulLifeTermOfLeaseMember
Machinery and laboratory equipment
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Estimated Useful Life	5 years
Vehicles
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Estimated Useful Life	4 years
Furniture and tools | Minimum
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Estimated Useful Life	3 years
Furniture and tools | Maximum
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Estimated Useful Life	5 years
Electronic equipment
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Estimated Useful Life	3 years
Software | Minimum
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Estimated Useful Life	3 years
Software | Maximum
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Estimated Useful Life	5 years

SUMMARY OF SIGNIFICANT ACCOUN_6

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Short-term investments and Impairment of long lived assets (Details) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Short-term investments
Shortterm investments	$ 0		$ 0
Impairment of long lived assets
Impairment loss	0	$ 0
Employee defined contribution plan
Employee benefit expenses	$ 1,142,843	$ 1,451,033

SUMMARY OF SIGNIFICANT ACCOUN_7

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of credit risk (Details)	6 Months Ended
	Jun. 30, 2024 USD ($) item	Dec. 31, 2023 USD ($)
Concentration of risks
Cash and cash equivalents	$ 95,673,787	$ 109,934,257
Concentration of credit risk | Cash and cash equivalents | Mainland of China
Concentration of risks
Cash and cash equivalents	6,662,939	6,538,253
Concentration of credit risk | Cash and cash equivalents | Outside the mainland of China
Concentration of risks
Cash and cash equivalents	$ 89,010,848	$ 103,396,004
Concentration of suppliers | Research and development services purchased | One supplier
Concentration of risks
Number of major supplier | item	1
Concentration risk percentage	15%
Concentration of suppliers | Research and development services purchased | No supplier
Concentration of risks
Number of major supplier | item	0
Concentration risk percentage	10%

SUMMARY OF SIGNIFICANT ACCOUN_8

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign currency exchange rate risk (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Depreciation of foreign currency (as a percent)	0.62%	3.75%
Government subsidies received	$ 7	$ 100

PREPAYMENTS AND OTHER CURRENT_3

PREPAYMENTS AND OTHER CURRENT ASSETS (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
PREPAYMENTS AND OTHER CURRENT ASSETS
Prepayments	$ 423,356	$ 591,383
Deposits	1,871,670	1,790,637
Others	804,336	905,425
Prepayments and other current assets	$ 3,099,362	$ 3,287,445

PROPERTY, EQUIPMENT AND SOFTW_3

PROPERTY, EQUIPMENT AND SOFTWARE, NET (Details) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Total property, equipment and software	$ 8,507,859		$ 8,543,198
Less: accumulated depreciation and amortization	(7,068,757)		(6,708,077)
Net book value	1,439,102		1,835,121
Depreciation and amortization	399,798	$ 518,199
Machinery and laboratory equipment
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Total property, equipment and software	5,171,471		5,201,479
Leasehold improvements
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Total property, equipment and software	1,031,254		1,037,675
Electronic equipment
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Total property, equipment and software	1,815,343		1,818,352
Furniture and tools
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Total property, equipment and software	49,509		42,821
Vehicles
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Total property, equipment and software	78,439		78,928
Software
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Total property, equipment and software	$ 361,843		$ 363,943

ACCRUALS AND OTHER CURRENT LI_3

ACCRUALS AND OTHER CURRENT LIABILITIES (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
ACCRUALS AND OTHER CURRENT LIABILITIES
Professional service fees	$ 1,093,869	$ 1,194,199
Payroll and related liabilities	952,336	1,177,301
Other taxes and surcharge	490,249	510,259
Others	122,078	119,749
Accruals and other current liabilities	$ 2,658,532	$ 3,001,508

BORROWINGS - Components (Detail

BORROWINGS - Components (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Short term borrowings:
Bank loans	$ 4,209,463	$ 4,235,673
Current portion of long term borrowings	11,765,449	4,161,549
Total current borrowings	15,974,912	8,397,222
Long term borrowings:
Bank loans	4,560,251	13,540,034
Total non current borrowings	4,560,251	13,540,034
Total borrowings	$ 20,535,163	$ 21,937,256

BORROWINGS - Short term borrowi

BORROWINGS - Short term borrowings (Details) - CNY (¥)	1 Months Ended
	Jun. 30, 2024	Jul. 31, 2023	Mar. 31, 2023	Jan. 31, 2023	Dec. 31, 2022	Jul. 31, 2022	Apr. 30, 2022	Mar. 31, 2022
Borrowings from Bank of Jiangsu Co., Ltd
Short-term debt
Amount borrowed						¥ 20,000,000
Term of the debt						1 year
Interest rate (as a percent)						3.70%
Borrowings from Bank of Ningbo Co., Ltd
Short-term debt
Amount borrowed		¥ 10,000,000		¥ 10,000,000
Term of the debt		1 year		1 year
Interest rate (as a percent)		3.85%		3.90%
China Merchants Bank Co., Ltd
Short-term debt
Amount borrowed								¥ 9,900,000
Term of the debt								1 year
Interest rate (as a percent)								3.90%
China Merchants Bank Co., Ltd., two
Short-term debt
Amount borrowed							¥ 20,100,000
Term of the debt							1 year
Interest rate (as a percent)							3.70%
China Construction Bank Corporation
Short-term debt
Amount borrowed	¥ 20,000,000				¥ 25,000,000
Term of the debt	1 year				1 year
Interest rate (as a percent)	3.50%				3.65%
China Everbright Bank Corporation [Member]
Short-term debt
Amount borrowed			¥ 10,000,000
Term of the debt			1 year
Interest rate (as a percent)			3.80%

BORROWINGS - Long term borrowin

BORROWINGS - Long term borrowings (Details)

6 Months Ended

12 Months Ended

Jun. 30, 2024 USD ($)

Jun. 30, 2024 CNY (¥)

Jun. 30, 2023 USD ($)

Dec. 31, 2023 CNY (¥)

Dec. 31, 2022 CNY (¥)

Dec. 31, 2021 CNY (¥)

Jun. 30, 2024 CNY (¥)

Dec. 31, 2023 USD ($)

Dec. 31, 2023 CNY (¥)

Sep. 30, 2023 CNY (¥)

Aug. 31, 2023 CNY (¥)

Apr. 30, 2023 CNY (¥)

Nov. 30, 2022 CNY (¥)

Aug. 31, 2022 CNY (¥)

May 31, 2022 CNY (¥)

Sep. 30, 2021 CNY (¥)

Sep. 30, 2020 CNY (¥)

Debt instrument

Amount repaid | $

$ 4,085,110

$ 5,797,491

Current portion of long-term borrowings | $

$ 11,765,449

$ 4,161,549

Shanghai Pudong Development Bank Co., Ltd. September 2020

Debt instrument

Amount borrowed

¥ 16,500,000

Term of the debt

3 years

Interest rate (as a percent)

4.27%

Amount repaid

¥ 3,850,000

¥ 1,650,000

Current portion of long-term borrowings

¥ 11,000,000

Shanghai Pudong Development Bank Co., Ltd. September 2021

Debt instrument

Amount borrowed

¥ 8,500,000

Term of the debt

3 years

Interest rate (as a percent)

4.05%

Amount repaid

¥ 1,225,000

¥ 850,000

425,000

Current portion of long-term borrowings

¥ 6,000,000

7,225,000

Agricultural Bank of China Limited May 2022

Debt instrument

Amount borrowed

¥ 30,000,000

Term of the debt

3 years

Interest rate (as a percent)

4%

Amount repaid

5,000,000

3,000,000

Current portion of long-term borrowings

22,000,000

5,000,000

Shanghai Pudong Development Bank Co., Ltd. May 2022

Debt instrument

Amount borrowed

¥ 20,000,000

Term of the debt

3 years

Interest rate (as a percent)

4%

Amount repaid

1,000,000

1,500,000

¥ 500,000

Current portion of long-term borrowings

17,000,000

9,500,000

Agricultural Bank of China Limited August 2022

Debt instrument

Amount borrowed

¥ 9,900,000

Term of the debt

3 years

Interest rate (as a percent)

4%

Amount repaid

0

1,000,000

Current portion of long-term borrowings

2,000,000

2,000,000

Shanghai Pudong Development Bank Co., Ltd. August 2022

Debt instrument

Amount borrowed

¥ 20,000,000

Term of the debt

3 years

Interest rate (as a percent)

4%

Amount repaid

1,000,000

1,000,000

Current portion of long-term borrowings

9,500,000

2,000,000

Agricultural Bank of China Limited November 2022

Debt instrument

Amount borrowed

¥ 9,900,000

Term of the debt

3 years

Interest rate (as a percent)

4%

Amount repaid

0

1,000,000

Current portion of long-term borrowings

2,000,000

2,000,000

Shanghai Pudong Development Bank Co., Ltd. November 2022

Debt instrument

Amount borrowed

4,750,000

¥ 10,000,000

Term of the debt

3 years

Interest rate (as a percent)

4%

Amount repaid

500,000

500,000

Current portion of long-term borrowings

1,000,000

Shanghai Pudong Development Bank Co., Ltd. April 2023

Debt instrument

Amount borrowed

¥ 7,000,000

Term of the debt

3 years

Interest rate (as a percent)

3.90%

Amount repaid

200,000

150,000

Current portion of long-term borrowings

700,000

550,000

Bank of Jiangsu Co., Ltd. August 2023

Debt instrument

Amount borrowed

¥ 10,000,000

Term of the debt

18 months

Interest rate (as a percent)

3.80%

Amount repaid

50,000

0

Current portion of long-term borrowings

9,950,000

100,000

Bank of Jiangsu Co., Ltd. September 2023

Debt instrument

Amount borrowed

¥ 10,000,000

Term of the debt

18 months

Interest rate (as a percent)

3.80%

Amount repaid

¥ 50,000

¥ 0

Current portion of long-term borrowings

¥ 9,950,000

¥ 100,000

BORROWINGS - Future maturities

BORROWINGS - Future maturities of short term borrowings and long term borrowings (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
BORROWINGS
Remainder of 2024	$ 2,869,451
2025	17,244,766
2026	420,946
Total borrowings	$ 20,535,163	$ 21,937,256

SHARE-BASED COMPENSATION (Detai

SHARE-BASED COMPENSATION (Details) - $ / shares			1 Months Ended	3 Months Ended	5 Months Ended	6 Months Ended
	Jan. 07, 2022	Jan. 16, 2021	Apr. 30, 2023	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2024	Jun. 30, 2023
SHARE-BASED COMPENSATION
Share options granted						100,000	1,679,000
Exercise price (in USD per share)						$ 2.67	$ 1.04
Service conditions and Performance conditions
SHARE-BASED COMPENSATION
Share options granted						4,826,906	4,776,906
Employees | Modification of vesting schedules and conditions of share options
SHARE-BASED COMPENSATION
Share options granted	2,060,308
2021 Plan
SHARE-BASED COMPENSATION
Aggregate ordinary shares reserved for issuance		2,994,000
Incremental percent of shares		5%
2021 Plan | Employees
SHARE-BASED COMPENSATION
Share options granted			156,725	1,679,000
2021 Plan | Employees | Minimum
SHARE-BASED COMPENSATION
Exercise price (in USD per share)				$ 0.94
2021 Plan | Employees | Maximum
SHARE-BASED COMPENSATION
Exercise price (in USD per share)				$ 1.08
2021 Plan | Employee and External Directors
SHARE-BASED COMPENSATION
Share options granted					100,000
2021 Plan | Employee and External Directors | Minimum
SHARE-BASED COMPENSATION
Exercise price (in USD per share)					$ 2.26
2021 Plan | Employee and External Directors | Maximum
SHARE-BASED COMPENSATION
Exercise price (in USD per share)					$ 3.07
2021 Plan | Management personnel
SHARE-BASED COMPENSATION
Share options granted				425,905

SHARE-BASED COMPENSATION - Shar

SHARE-BASED COMPENSATION - Share Option Activities (Details) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Number of Options
Outstanding at the beginning	8,766,882	6,286,912	6,286,912
Granted (in shares)	100,000	1,679,000
Exercised (in shares)	(72,641)	(10,000)
Forfeited (in shares)	(144,314)	(336,024)
Outstanding at the end	8,649,927	7,619,888	8,766,882	6,286,912
Vested and expected to vest at the end	8,649,927
Exercisable at the end	2,951,207	2,321,860
Weighted Average Exercise Price
Outstanding at the beginning (in dollars per share)	$ 3.39	$ 4.80	$ 4.80
Granted (in dollars per share)	2.67	1.04
Exercised (in dollars per share)	0.86	0.55
Forfeited (in dollars per share)	9.26	3.77
Outstanding at the end (in dollars per share)	3.30	4.02	3.39	$ 4.80
Vested and expected to vest at the end (in dollars per share)	3.30
Exercisable at the end (in dollars per share)	4.93	6.44
Weighted Average Grant Date Fair Value
Outstanding at the beginning (in dollars per share)	3.60	5.16	5.16
Granted (in dollars per share)	1.57	0.69
Exercised (in dollars per share)	3.45	5.72
Forfeited (in dollars per share)	6.36	3.86
Outstanding at the end (in dollars per share)	3.53	4.23	$ 3.60	$ 5.16
Vested and expected to vest at the end (in dollars per share)	3.53
Exercisable at the end (in dollars per share)	$ 5.84	$ 6.85
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value
Outstanding (in years)	7 years 9 months 14 days	8 years 4 months 9 days	8 years 2 months 26 days	8 years 5 months 8 days
Vested and expected to vest at the end (in years)	7 years 9 months 14 days
Exercisable at the end (in years)	6 years 7 months 20 days	7 years 2 months 8 days
Outstanding at the beginning (in dollars)	$ 2,011,843	$ 94,990	$ 94,990
Outstanding at the end (in dollars)	6,937,921	470,083	$ 2,011,843	$ 94,990
Vested and expected to vest at the end (in dollars)	6,937,921
Exercisable at the end (in dollars)	$ 1,681,415	$ 62,724

SHARE-BASED COMPENSATION - Sh_2

SHARE-BASED COMPENSATION - Share Option Activities - Narrative (Details) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
SHARE-BASED COMPENSATION
Aggregate fair value of the equity awards vested	$ 2,761,089	$ 3,920,616
Unrecognized employee share based compensation expense	$ 14,106,385
Weighted average period to recognize unrecognized compensation cost (in years)	1 year 2 months 12 days

SHARE-BASED COMPENSATION - Fair

SHARE-BASED COMPENSATION - Fair Value Of Share Options (Details) - $ / shares	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Assumptions used to estimate the fair value
Risk-free interest rate, minimum	4.18%	3.38%
Risk-free interest rate, maximum	4.42%	3.72%
Dividend yield	0%	0%
Expected volatility range, minimum	73.30%	73.60%
Expected volatility range, maximum	73.60%	74.10%
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 ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
SHARE-BASED COMPENSATION
Total sharebased compensation expenses	$ 2,477,108	$ 4,030,214
Research and development expenses
SHARE-BASED COMPENSATION
Total sharebased compensation expenses	1,724,112	2,706,745
Administrative expenses
SHARE-BASED COMPENSATION
Total sharebased compensation expenses	$ 752,996	$ 1,323,469

COLLABORATION ARRANGEMENTS (Det

COLLABORATION ARRANGEMENTS (Details)	1 Months Ended				6 Months Ended		12 Months Ended
	Mar. 31, 2022 USD ($)	May 31, 2019	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2021 CNY (¥)	Apr. 30, 2022 USD ($)	Feb. 28, 2021 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative
Revenues						$ 17,295,745
Guilin Sanjin Pharmaceutical Co., Ltd. License Agreement
Collaborative Arrangement and Arrangement Other than Collaborative
Upfront cash payment received			$ 1,511,168	¥ 10,000,000
Agreed period for not to grant rights associated with antibodies to third parties			3 years	3 years
Revenues					$ 0	0
Dragon Boat Biopharmaceutical (Shanghai) Limited License Agreement
Collaborative Arrangement and Arrangement Other than Collaborative
Agreed period for not to grant rights associated with antibodies to third parties		3 years
Revenues					0	0		$ 620,011	¥ 4,000,000
Milestone payment received								620,011	¥ 4,000,000
Exelixis Inc Agreement
Collaborative Arrangement and Arrangement Other than Collaborative
Upfront cash payment received							$ 1,100,000	11,000,000
Revenues					0	9,600,000
Milestone payment received						3,000,000
Payment of upfront-refundable fee										$ 1,100,000	$ 11,000,000
Milestone payments receivable based on development and regulatory milestones											127,500,000
Milestone payments receivable based on sales											$ 262,500,000
Upfront fee received						5,500,000		5,500,000
Milestone fee received						3,000,000		3,000,000
Exelixis Inc Agreement | Delivery of data packages and achievement of initial target milestone
Collaborative Arrangement and Arrangement Other than Collaborative
Revenues						8,500,000		$ 8,500,000
Exelixis Inc Agreement | Delivery of additional masked antibodies
Collaborative Arrangement and Arrangement Other than Collaborative
Revenues						1,100,000
Sanofi Agreement
Collaborative Arrangement and Arrangement Other than Collaborative
Upfront cash payment received	$ 17,500,000						$ 17,500,000
Revenues					$ 0	$ 7,694,360
Milestone payments receivable based on development and regulatory milestones	173,500,000
Milestone payments receivable based on sales	$ 450,000,000

INCOME TAX EXPENSE (Details)

INCOME TAX EXPENSE (Details) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
INCOME TAX EXPENSE
Loss before income tax	$ (17,010,328)	$ (1,795,670)
Income tax expense	$ 1,388	$ 2,313,136
Effective income tax rate	(0.01%)	(128.82%)

NET LOSS PER SHARE - Schedule o

NET LOSS PER SHARE - Schedule of basic and diluted net loss per share (Details) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Numerator:
Net loss attributable to Adagene Inc.'s shareholders	$ (17,011,716)	$ (4,108,806)
Net loss attributable to ordinary shareholders	$ (17,011,716)	$ (4,108,806)
Denominator:
Weightedaverage number of ordinary shares outstanding-basic	55,213,051	54,604,787
Weightedaverage number of ordinary shares outstanding-diluted	55,213,051	54,604,787
Net Loss per share-basic	$ (0.31)	$ (0.08)
Net Loss per share- diluted	$ (0.31)	$ (0.08)

NET LOSS PER SHARE - Anti-dilut

NET LOSS PER SHARE - Anti-dilutive Securities (Details) - shares	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Incremental shares on share options and share grant
NET LOSS PER SHARE
Antidilutive securities not included in the computation of diluted net loss per share	1,305,736	50,770

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Related Party Transaction [Line Items]
Amounts due from related parties	$ 31,419		$ 222,027
Other Receivable, after Allowance for Credit Loss, Current, Related Party, Type [Extensible Enumeration]	us-gaap:RelatedPartyMember		us-gaap:RelatedPartyMember
Amounts due to related parties	$ 17,333,926		$ 16,714,326
Other Liability, Current, Related Party, Type [Extensible Enumeration]	us-gaap:RelatedPartyMember		us-gaap:RelatedPartyMember
Receipt of CRO and CDMO services
Related Party Transaction [Line Items]
Related party transactions	$ 966,665	$ 1,788,111
WuXi Biologics (Cayman) Inc.
Related Party Transaction [Line Items]
Amounts due from related parties			$ 102,416
Other Receivable, after Allowance for Credit Loss, Current, Related Party, Type [Extensible Enumeration]	us-gaap:SubsidiaryOfCommonParentMember		us-gaap:SubsidiaryOfCommonParentMember
Amounts due to related parties	$ 16,863,078		$ 16,371,593
Other Liability, Current, Related Party, Type [Extensible Enumeration]	us-gaap:SubsidiaryOfCommonParentMember		us-gaap:SubsidiaryOfCommonParentMember
WuXi Biologics (Cayman) Inc. | Receipt of CRO and CDMO services
Related Party Transaction [Line Items]
Related party transactions	$ 715,995	1,358,372
WuXi AppTec Group
Related Party Transaction [Line Items]
Amounts due from related parties	$ 28,388		$ 118,594
Other Receivable, after Allowance for Credit Loss, Current, Related Party, Type [Extensible Enumeration]	us-gaap:MajorityShareholderMember		us-gaap:MajorityShareholderMember
Amounts due to related parties	$ 470,848		$ 341,716
Other Liability, Current, Related Party, Type [Extensible Enumeration]	us-gaap:MajorityShareholderMember		us-gaap:MajorityShareholderMember
WuXi AppTec Group | Receipt of CRO and CDMO services
Related Party Transaction [Line Items]
Related party transactions	$ 244,590	$ 429,739
Certain senior management personnel
Related Party Transaction [Line Items]
Amounts due from related parties	3,031		$ 1,017
Amounts due to related parties			$ 1,017
Related party transactions	$ 6,080

LEASES - Information related to

LEASES - Information related to operating leases (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Assets
Operating lease right-of-use assets	$ 254,048	$ 365,103
Liabilities
Current portion of operating lease liabilities	141,281	195,955
Operating lease liabilities	$ 114,086	$ 173,660
Weighted average remaining lease term (years)	1 year 9 months 18 days	2 years 1 month 6 days
Weighted average discount rate	4.10%	4.40%

LEASES - Information related _2

LEASES - Information related to operating lease activity (Details) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Operating lease rental expense
Amortization of right-of-use assets	$ 109,251	$ 108,565
Expense for short-term leases within 12 months	6,778	6,669
Interest of lease liabilities	6,889	5,130
Total operating lease rental expense	$ 122,918	$ 120,364

LEASES - Maturities of lease li

LEASES - Maturities of lease liabilities (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
LEASES
Remainder of fiscal year	$ 87,048
Year 1	122,782	$ 207,155
Year 2	55,156	123,546
Year 3		55,499
Total undiscounted lease payments	264,986	386,200
Less: imputed interest	(9,619)	(16,585)
Total lease liabilities	$ 255,367	$ 369,615

TREASURY SHARES (Details)

TREASURY SHARES (Details) - shares	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Treasury Shares
Treasury shares	1		1
American depositary shares
Treasury Shares
Treasury shares	1		1
Ordinary shares
Treasury Shares
Shares retired (in shares)	0	0
Treasury shares	1		1