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United States securities and exchange commission logo
November 10, 2020
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.
Amendment No. 1 to
Draft Registration Statement on Form F-1
Submitted October
27, 2020
CIK No.: 0001818838
Dear Mr. Luo:
We have reviewed your amended draft offering 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 providing the requested
information and either submitting
an amended draft offering statement or publicly filing your offering
statement on EDGAR. 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 draft offering statement or filed offering statement and the
information you provide in
response to these comments, we may have additional comments. Unless we
note otherwise, our
references to prior comments are to comments in our October 19, 2020
letter.
Draft Registration Statement on Form F-1 Submitted on October 27, 2020
Our Pipeline, page 5
1. We note your response
to prior comment 3 and that your disclosure states on page 6 that
there were seven SAEs
that were determined to be related to the study treatment. Please
clearly expand your
discussion in the Summary to specify the serious adverse events. We
also note your
statement on page 142 that 57% of the patients discontinued ADG106
treatment in the
ADG106-1002 trial, including three patients who discontinued due to
adverse events. Please
revise to clarify this information in the Summary, or advise.
2. We note your response
to prior comment 4, including your revised pipeline table on page
Peter (Peizhi) Luo
FirstName LastNamePeter (Peizhi) Luo
Adagene Inc.
Comapany 10,
November NameAdagene
2020 Inc.
November
Page 2 10, 2020 Page 2
FirstName LastName
5. Please shorten your arrow for ADG116 Trial 1003 to the beginning of
Phase Ia or
otherwise advise. We note your disclosures elsewhere indicating that
you have dosed one
patient in the trial in July 2020.
3. We note your response to prior comment 24 that you do not intend to
seek approval for
your product candidates in Australia. Please revise your disclosures
here and elsewhere as
appropriate to clarify this intent to use the trial data to seek
approval in China and the U.S.
Please also provide additional disclosure regarding any risks of this
approach, including
with respect to risks relating to your ability to rely on the trial
data, or advise.
ADG116: Novel anti-CTLA-4 NEObody candidate, page 7
4. We note your response to prior comment 7, including your revised
disclosure at the
bottom of page 7. Please further revise to make clear that you
currently do not plan on
enrolling patients in the U.S. trial consistent with your disclosure
on page 32.
Capitalization, page 99
5. Please update the total capitalization amount to include the current
portion of long-term
borrowings, which was added in response to comment 13.
ADC Therapeutics Agreements, page 168
6. We note your response to prior comments 20, 26, and 27, and your
revised disclosures.
Please disclose aggregate payments received to date under the ADCT
License Agreement.
Additionally, with respect to each of the ADCT License Agreement and
the Collaboration
Agreement, as well as the agreement with Dragon Boat, disclose the
aggregate milestones
receivable.
Intellectual Property, page 172
7. We note your response to our prior comment 22 and your revised
disclosures. Please
further clarify which of the patents are already issued and which ones
are subject to
pending patent applications.
Notes to the Consolidated Financial Statements
10. Collaboration Arrangements, page F-28
8. As requested in comment 26, please disclose the US dollar equivalent
to the RMB
4,000,000 upfront payment received. Please also address this comment
with your interim
financial statements.
18. Condensed Financial Information of the Parent Company, page F-40
9. We note your response to comment 28 in which you state that the parent
company also
carries out research and development activities for new drug
discovery. Please help us
understand how this statement is consistent with the disclosures made
in the Form F-1. In
Peter (Peizhi) Luo
Adagene Inc.
November 10, 2020
Page 3
this regard, we note on page 10 that the parent company, Adagene Inc.,
was incorporated
in February 2011 under the laws of the Cayman Islands as an offshore
holding company.
In December 2011, Adagene (Suzhou) Limited was incorporated in China,
through which
you commenced research and development activities in China. On page 73,
you state that
substantially all of your business operations are in China. On page 81,
you state that you
are an offshore holding company conducting your operations in China
through your PRC
subsidiary and that you make loans to the PRC subsidiary. Further, we
note that the
auditors are located in and organized under the laws of the PRC. As such,
it remains
unclear why you continue to reflect operating activity (contract
liabilities, revenues,
research and development expenses) in your standalone financial
statements as that of the
parent company rather than of the subsidiaries formed to conduct the
operations of the
entity. It further remains unclear how you are (1) able to recognize
income from equity
method investees, as no profits have been recognized, and (2) recognize
loans to and from
your subsidiaries as operating activities as you are stated to be a
holding company with no
stated operating activities located in the Cayman Islands. Please advise
and revise the
disclosures and presentations in the document accordingly.
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 Dorrie Yale at 202-551-8776 with any
other questions.
Sincerely,
FirstName LastNamePeter (Peizhi) Luo
Division of
Corporation Finance
Comapany NameAdagene Inc.
Office of Life
Sciences
November 10, 2020 Page 3
cc: Li He, Esq.
FirstName LastName