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United States securities and exchange commission logo
January 28, 2021
Peter (Peizhi) Luo
Chief Executive Officer
Adagene Inc.
4F, Building C14, No. 218
Xinghu Street, Suzhou Industrial Park
Suzhou, Jiangsu Province, 25125
People's Republic of China
Re: Adagene Inc.
Registration
Statement on Form F-1
Filed January 19,
2021
File No. 333-252210
Dear Mr. Luo:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form F-1 filed January 19, 2021
Prospectus Summary, page 1
1. We note your revised
disclosure elsewhere in the registration statement regarding the
Holding Foreign
Companies Accountable Act enacted on December 18, 2020. In
addition to urging
investors, "to read the entire prospectus carefully, especially the risks of
investing in the ADSs
discussed under "Risk Factors," "Business," and information
contained in
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" before
deciding whether to buy the ADSs," please include additional
disclosure here,
calling attention to the risk that you could be potentially delisted pursuant
to the Holding Foreign
Companies Accountable Act.
Peter (Peizhi) Luo
FirstName LastNamePeter (Peizhi) Luo
Adagene Inc.
Comapany
January 28,NameAdagene
2021 Inc.
January
Page 2 28, 2021 Page 2
FirstName LastName
Management s Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Policies, Judgments and Estimates
Share-based Compensation, page 131
2. We note your response to comment 15 in our letter dated October 19,
2020. As verbally
requested on January 26, 2021 and January 28, 2021, please provide us
with the the
number of options granted for each grant date. To the extent that a
material portion of
those grants have subsequently been cancelled or forfeited, please
also tell us the number
by grant date that has been cancelled and/or forfeited. Finally,
quantify any discounts
applied to arrive at the deemed fair value of ordinary shares at each
grant date, such as the
discount for lack of marketability. Once we receive this information,
we may have further
comment.
Business
Our Pipeline , page 139
3. We note your updated graphics on page 141, 142 and 143, depicting your
clinical
development plan. Text in the graphics appear illegible. Please update
these graphics
accordingly. In addition, we note the graphics contain technical
jargon, including "RP2D"
and "Traditional 3+3," and elsewhere in your registration statement we
note technical
terms, such as "SUV scores." Define these terms in a way that a lay
person can
understand. In addition, please provide narrative disclosure to
clarify your clinical
development plant for each of your product candidates depicted in your
updated graphics.
Deep, Broad, Differentiated Preclinical Discovery Pipeline, page 172
4. We note your updated disclosure, including your updated pipeline chart
on page
173. Please revise your chart to indicate the material stages you will
need to complete
before marketing your products. For instance, please add Phase I, II
and III to your chart.
In addition, your pipeline table includes three separate pre-clinical
phases, which gives the
impression that your product candidates are farther along in the
clinical process. Please
revise the table to eliminate the separate column for lead
identification, as this stage is not
sufficiently distinct. Also revise to delete the rows for any
preclinical product candidate
that is not currently material.
AI-Powered Antibody Discovery, page 176
5. We note your updated disclosure and your claim that your "DPL platform
is designed to
substantially improve the probability of success for the overall R&D
process." Given the
early stage of product candidates and your statement elsewhere that
"the results of [y]our
current and previous preclinical studies or clinical trials may not be
predictive of future
results," please remove this claim or otherwise advise.
Compensation of Directors and Executive Officers, page 226
Peter (Peizhi) Luo
FirstName LastNamePeter (Peizhi) Luo
Adagene Inc.
Comapany
January 28,NameAdagene
2021 Inc.
January
Page 3 28, 2021 Page 3
FirstName LastName
6. Please update your executive compensation disclosure to include your
recently completed
fiscal year. Please refer to Item 6.B of Form 20-F.
Consolidated Statements of Comprehensive Loss, page F-4
7. Please revise the presentation of expenses to remove the indentation
for the administrative
expenses line or otherwise clarify that this line is not included in
research and
development expenses. Please also address this comment for the parent
only financial
statements included in Note 18 and the interim financial statements.
17. Subsequent Events, page F-40
8. Please expand your disclosures for the October 2020 and the January
2021 share option
grants to include the exercise prices, the fair value of the options
granted, and the period
over which the compensation expense will be recognized. For the
November 2020 share
options modification, please disclose the amount of additional
compensation expense
recognized, the exercise price of the share options, and the amount
the promissory notes
issued.
18. Condensed Financial Information of the Parent Company, page F-41
9. We note your response to comment 4. While we note that your
consolidated statements of
cash flows includes separate line items for cash transactions with
related parties, the
parent only statements of cash flows does not include these line
items. As previously
requested, please disclose the related party transactions, including
those transactions with
the parent's subsidiaries, recognized in your statements of cash flows
in accordance with
Article 4-08(k)(i) of Regulation S-K.
General
10. Refer to prior comment 2. You continue to describe your product
candidates as
"potent" on pages 6, 140, 148, 156, 157 and elsewhere. Revise these
and all similar
statements in the document.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Tracey Houser at 202-551-3736 or Terence O'Brien at
202-551-3355
if you have questions regarding comments on the financial statements and
related matters.
Please contact Jason Drory at 202-551-8342 or Celeste Murphy at 202-551-3257
with any other
Peter (Peizhi) Luo
Adagene Inc.
January 28, 2021
Page 4
questions.
Sincerely,
FirstName LastNamePeter (Peizhi) Luo
Division of Corporation Finance
Comapany NameAdagene Inc.
Office of Life Sciences
January 28, 2021 Page 4
cc: Li He, Esq.
FirstName LastName