SecProbe.io

CORRESP
 1
 filename1.htm

 Adagene Inc.

 4F, Building C14, No. 218
Xinghu Street, Suzhou Industrial Park
Suzhou, Jiangsu Province, 215123
People's Republic of China

 May 28, 2025

 VIA EDGAR

 United States Securities and Exchange Commission

 Division of Corporation Finance

 100 F Street, N.E.

 Washington, D.C. 20549

 Attention: Mr. Chris Edwards

    Mr. Tyler Howes

    Ms. Laura Crotty

 Re:           Adagene
Inc.

 Registration Statement on Form F-3

 Filed May 9, 2025

 File No. 333-287161

 Ladies and Gentlemen:

 On behalf of Adagene Inc.,
(the "Company"), and pursuant to Rule 461 under the Securities Act of 1933, as amended, the undersigned respectfully
requests that the effective date for the above-referenced Registration Statement on Form F-3 be accelerated so that
it will be declared effective at 4:30 p.m. on May 30, 2025, or as soon thereafter as is practicable.

 Please direct any questions
regarding the foregoing to Xuelin (Steve) Wang at +852 2533-1092 (xuelin.wang@davispolk.com) of Davis Polk & Wardwell LLP, counsel
to the Company.

 Sincerely,

 /s/ Peter Luo

 Peter Luo

 Chief Executive Officer

 Adagene Inc.

 cc: Xuelin (Steve) Wang, Esq.

CORRESP
 1
 filename1.htm

 Davis Polk &
 Wardwell
 Hong Kong Solicitors
 The Hong Kong Club Building
 3A Chater Road
 Hong Kong
 davispolk.com

 Resident Hong Kong
 Partners

 James C. Lin *
 Martin Rogers **
 Miranda So *
 James Wadham **
 Xuelin Wang *

 Hong Kong
 Solicitors
 * Also Admitted in New York
 ** Also Admitted in England and Wales

 May 23, 2025

 Re: Adagene
Inc. (CIK: 0001818838)

 Responses to the Staff's Comments on the Registration Statement on Form F-3 Filed May 9, 2025

 Confidential

 Tyler Howes

 Laura Crotty

 Division of Corporation Finance

 Office of Life Sciences

 Securities and Exchange Commission

 100 F Street, N.E.

 Washington, D.C. 20549

 Ladies and Gentlemen:

 On
behalf of Adagene Inc. (the " Company "), a company incorporated under the laws of the Cayman Islands, we are
submitting to the staff (the " Staff ") of the Securities and Exchange Commission (the " Commission ")
this letter setting forth the Company's responses to the comments contained in the Staff's letter dated May 21, 2025
on the Company's Registration Statement on Form F-3 filed May 9, 2025 (the " Registration Statement ").
Concurrently with the submission of this letter, the Company is filing its Amendment No. 1 to the Registration Statement (the " Revised
Registration Statement ") via EDGAR to the Commission.

 The
Company has responded to all of the Staff's comments by revising the Registration Statement to address the comments. The Staff's
comments are repeated below in bold, followed by the Company's response to such comments. We have included page numbers
to refer to the location in the Revised Registration Statement where the language addressing a particular comment appears. Capitalized
terms not defined herein shall have the meaning given to them in the Revised Registration Statement.

 The Company expects to file acceleration request to have the registration statement declared effective on May 30, 2025, provided that
the outstanding comments are resolved. The Company would greatly appreciate the Staff's continuing assistance in meeting the proposed
timetable.

 *	 *	 *	 *

 Davis
Polk includes Davis Polk & Wardwell LLP and its associated entities.

 Registration Statement on Form F-3

 General

 1. Please revise the first bullet of the Explanatory Note
to reflect the inclusion of resale shares to be offered by selling shareholders in the base prospectus.

 The Company acknowledges the Staff's comment and advises
the Staff that the Company has removed the concept of selling shareholders throughout in the Revised Registration Statement.

 The Company intends to file separate resale registration
statements to register the offering by the selling shareholders when necessary.

 Cover Page

 2. We note that your base prospectus covers the offering
of up to $200 million of ordinary shares, warrants or units to be offered by you or selling shareholders. Please revise
your cover page to quantify the number of ordinary shares that may be offered by the selling shareholders. Please also revise your
disclosure, where appropriate, to identify the selling shareholders and provide a brief description of the initial transaction in which
these securities were sold to the selling shareholders. Refer to Item 501 of Regulation S-K and General Instruction II.H of Form F-3
for guidance. We note that you do not appear to qualify for the omission of this information under Rule 430B(b) because the
company is not primarily eligible to use Form F-3 under General Instruction I.B.1.

 In response to the Staff's comment, the Company has
revised the disclosure throughout the Revised Registration Statement to remove the concept of selling shareholders, given there was no
initial offering transaction of the securities as of the date of this submission.

 The Company, however, is primarily eligible to use Form F-3
under Genearal Instruction I.B.1. Please see the analysis below:

 · Measurement Dates:

 o May 9, 2025, which is the date of the Registration Statement (" May 9 Measurement Date "); and

 o May 23, 2025, which is the date of the Revised Registration Statement (" May 23 Measurement Date ").

 · Share price used for the determination:

 o US$1.99 per ADS or US$1.59 per ordinary share as of March 10, 2025, which was within 60 days prior to the May 9 Measurement
Date; and

 o US$1.82 per ADS or US$1.46 per ordinary share as of April 1, 2025, which was within 60 days prior to the May 23 Measurement
Date.

 May 23, 2025 2

 · Number of ordinary shares held by the affiliates of the Company as of March 31, 2025, which was within 60 days prior to the Measurement
Dates: 6,633,779, including (a) 1,851,339 ordinary shares beneficially owned by Peter Luo act-in-concert group and (b) 4,782,440
ordinary shares beneficially owned by General Atlantic Singapore AI Pte. Ltd. ("GA") 1 .

 · Total number of ordinary shares issued and outstanding as of March 31, 2025: 58,888,194 ordinary shares .

 · Number of ordinary shares held by the non-affiliates of the Company as of March 31, 2025: 52,254,415 ordinary shares

 · Public float:

 o May 9 Measurement Date: 52,254,415 x US$1.59 = US$83,084,520, which is greater than US$75 million threshold under Genearal Instruction
I.B.1. of Form F-3.

 o May 23 Measurement Date: 52,254,415 x US$1.46 = US$76,291,446, which is greater than US$75 million threshold under Genearal
Instruction I.B.1. of Form F-3.

 *	 *	 *	 *

 1
In March 2025, GA delivered a written undertaking to irrevocably waive its board appointment right and removed its appointed director.
Accordingly, GA is no-longer an affiliate of the Company. However, for the determination of public float, the Company has
 excluded shares beneficially owned by GA from the public float.

 May 23, 2025 3

 If
you have any questions regarding this submission, please contact Steve Wang at +852 2533-1092 (xuelin.wang@davispolk.com ).

 Thank you again for your time
and attention.

 Yours sincerely,

 /s/ Steve Wang

 Steve Wang

 cc: Dr. Peter Luo, Chief Executive Officer

 Adagene Inc.

 May 23, 2025 4

<DOCUMENT>
<TYPE>TEXT-EXTRACT
<SEQUENCE>2
<FILENAME>filename2.txt
<TEXT>
 May 21, 2025

Peter Luo
Chief Executive Officer
Adagene Inc.
4F, Building C14, No. 218
Xinghu Street, Suzhou Industrial Park
Suzhou, Jiangsu Province, 215123
People s Republic of China

 Re: Adagene Inc.
 Registration Statement on Form F-3
 Filed May 9, 2025
 File No. 333-287161
Dear Peter Luo:

 We have conducted a limited review of your registration statement and
have the
following comments.

 Please respond to this letter by amending your registration statement
and providing
the requested information. If you do not believe a comment applies 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 this letter, we may have additional comments.

Registration Statement on Form F-3
General

1. Please revise the first bullet of the Explanatory Note to reflect the
inclusion of resale
 shares to be offered by selling shareholders in the base prospectus.
Cover Page

2. We note that your base prospectus covers the offering of up to $200
million of
 ordinary shares, warrants or units to be offered by you or selling
shareholders. Please
 revise your cover page to quantify the number of ordinary shares that
may be offered
 by the selling shareholders. Please also revise your disclosure, where
appropriate,
 to identify the selling shareholders and provide a brief description of
the initial
 May 21, 2025
Page 2

 transaction in which these securities were sold to the selling
shareholders. Refer to
 Item 501 of Regulation S-K and General Instruction II.H of Form F-3 for
guidance.
 We note that you do not appear to qualify for the omission of this
information under
 Rule 430B(b) because the company is not primarily eligible to use Form
F-3 under
 General Instruction I.B.1.
 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.

 Please contact Tyler Howes at 202-551-3370 or Laura Crotty at
202-551-7614 with
any questions.

 Sincerely,

 Division of
Corporation Finance
 Office of Life
Sciences
cc: Xuelin Wang, Esq.
</TEXT>
</DOCUMENT>

United States securities and exchange commission logo
July 11, 2023
Raymond Tam
Chief Financial Officer
Adagene Inc.
4F, Building C14, No. 218
Xinghu Street, Suzhou Industrial Park
Suzhou, Jiangsu Province, 215123
People’s Republic of China
Re:Adagene Inc.
Annual Report on Form 20-F for the fiscal year ended December 31, 2022
Filed April 28, 2023
File No. 001-39997
Dear Raymond Tam:
            We have completed our review of your filing.  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.
Sincerely,
Division of Corporation Finance
Office of Life Sciences
cc:       Xuelin Wang, Esq.

CORRESP
1
filename1.htm

July 10, 2023

  Re:
  Adagene Inc.

  Annual Report on Form 20-F

  Filed April 28, 2023

  File No. 001-39997

Ms. Lynn
Dicker

Mr. Kevin Kuhar

Mr. Kyle Wiley

Mr. Christopher Dunham

Mr. Jimmy McNamara

Mr. Tim Buchmiller

Office of Life Sciences

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Dear Lynn
Dicker, Kevin Kuhar, Kyle Wiley, Christopher Dunham, Jimmy McNamara and Tim Buchmiller:

This letter sets forth the supplemental responses of Adagene Inc. (“Adagene”
or the “Company”) to the comments (the “Comments”) the Company received from the staff (the “Staff”)
of the Securities and Exchange Commission (the “Commission”) in a letter dated June 5, 2023 (the “June Response
Letter”) in connection with a teleconference between the Staff and the Company’s counsel on July 5, 2023. Capitalized
terms used but not otherwise defined in this supplemental response letter shall have the meanings ascribed to such terms in the June Response
Letter.

For your convenience, we have included herein the comment in bold,
and the Company’s responses are set forth immediately below the Comment.

*          *          *          *

General Note to the Staff:

The Company
respectfully submits in this letter its proposed updates to the disclosures contained in the annual report for the year ending
December 31, 2022 (the “2022 Annual Report”), which, subject to the Staff’s review and further regulatory
developments (if applicable), will be included in the Company’s annual report for the year ending December 31, 2023 (the “2023
Annual Report”) and future filings, to the extent applicable.

Annual Report on Form 20-F for the fiscal year ended December 31,
2022

Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections, page 212

1. We note your statement that you reviewed your register of members and public filings made by your shareholders in connection with
your required submission under paragraph (a). Please supplementally describe any additional materials that were reviewed and tell us whether
you relied upon any legal opinions or third party certifications such as affidavits as the basis for your submission. In your response,
please provide a similarly detailed discussion of the materials reviewed and legal opinions or third party certifications relied upon
in connection with the required disclosures under paragraphs (b)(2) and (3).

Required disclosures under paragraph (b)(2) of Item 16I

With respect to the percentage of shares of Adagene Inc. owned by governmental
entities in the foreign jurisdiction in which the registrant is incorporated or otherwise organized, namely, Cayman Islands, Hong Kong,
PRC, United States, Australia, and Switzerland, and Singapore, the Company examined the Company’s register of members
and Public Filings made by the Company’s shareholders as the Company explained under the subsection titled “Submission under
paragraph (a) of Item 16I” of the response to Comment No. 1 in the June Response Letter. Other than
reviewing the Public Filings made by the Company’s shareholders, the Company was unable to conduct look-through exercises of the
beneficial ownership of holders of its American deposited shares to determine whether such holders are owned by governmental entities
in the foreign jurisdiction in which the registrant is incorporated or otherwise organized. However, nothing comes to the attention of
the Company that makes the Company believe that any such holder is owned by governmental entities in the foreign jurisdiction in which
the registrant is incorporated or otherwise organized.

With respect to the percentage of shares of each of the Company’s
consolidated foreign operating entities as disclosed in Exhibit 8.1, because each such consolidated foreign operating entity is directly
wholly-owned by its respective shareholder, which is also a consolidated foreign operating entity of the Company, and indirectly wholly-owned
by Adagene Inc., the Company did not need to review other documentation to reach its conclusion.

Required disclosures under paragraph (b)(3) of Item 16I

For similar reasons, the Company examined the Company’s register
of members and Public Filings made by the Company’s shareholders to reach the conclusion with respect to whether the governmental
entities in the applicable foreign jurisdiction with respect to the Company’s registered public accounting firm have a controlling
financial interest in each of Adagene Inc.

For similar reasons, the Company did not need to review other documentation
to reach its conclusion with respect to each of its consolidated foreign operating entity.

***

If you have
further questions or comments regarding, or require further information or clarification of, any of the responses provided in this letter
or if the Commission has any questions with respect to Adagene’s Annual Report on Form 20-F, please contact Xuelin (Steve)
Wang at +852 2533-1092 (xuelin.wang@davispolk.com) of Davis Polk & Wardwell LLP.

Thank you for your time and attention.

  Yours sincerely,

  /s/ Raymond Tam

  Name: Raymond Tam

  Title: Chief Financial Officer

    2

  cc:
  Dr. Peter Luo, Chief Executive Officer

Adagene Inc.

  Mr. Xuelin (Steve) Wang, Ph.D. Partner

Davis Polk & Wardwell LLP

    3

CORRESP
1
filename1.htm

    June 16, 2023

    Re:

    Adagene Inc.

    Annual Report on Form 20-F

    Filed April 28, 2023

    File No. 001-39997

Ms. Lynn Dicker

Mr. Kevin Kuhar

Mr. Kyle Wiley

Mr. Christopher Dunham

Mr. Jimmy McNamara

Mr. Tim Buchmiller

Office of Life Sciences

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Dear Lynn Dicker, Kevin Kuhar, Kyle Wiley, Christopher Dunham, Jimmy
McNamara and Tim Buchmiller:

This letter sets forth the responses of Adagene Inc. (“Adagene”
or the “Company”) to the comments (the “Comments”) the Company received from the staff (the “Staff”)
of the Securities and Exchange Commission (the “Commission”) in a letter dated June 5, 2023.

For your convenience, we have included herein the comment in bold,
and the Company’s responses are set forth immediately below the Comment.

*
*      *      *

General Note to the Staff:

The Company respectfully submits in this letter its proposed updates
to the disclosures contained in the annual report for the year ending December 31, 2022 (the “2022 Annual Report”),
which, subject to the Staff’s review and further regulatory developments (if applicable), will be included in the Company’s
annual report for the year ending December 31, 2023 (the “2023 Annual Report”) and future filings, to the extent applicable.

Annual Report on Form 20-F for the fiscal year ended December
31, 2022

Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections, page 212

 1. We note your statement that you reviewed your register of members and public filings made by your shareholders in connection with
your required submission under paragraph (a). Please supplementally describe any additional materials that were reviewed and tell us whether
you relied upon any legal opinions or third party certifications such as affidavits as the basis for your submission. In your response,
please provide a similarly detailed discussion of the materials reviewed and legal opinions or third party certifications relied upon in connection with
the required disclosures under paragraphs (b)(2) and (3).

Submission under paragraph (a) of Item 16I

In response to the Staff’s comment, the Company respectfully
advises the Staff that the Company did not rely on any legal opinions or third-party certifications such as affidavits as the basis for
its submission under paragraph (a) of Item 16I on Exhibit 15.5 to the 2022 Annual Report (“Exhibit 15.5”).

As described in more detail in Holding Foreign Companies Accountable
Act Disclosure, Release No. 34-93701 (the “SEC HFCAA Final Rule”), the SEC specifically acknowledges that “[although]
the interim final amendments prescribed the timing and means by which such submissions were made, neither they nor the HFCA Act specified
the particular types of documentation that could or should be submitted for this purpose.” See SEC HFCAA Final Rule (emphasis
added).

Indeed, the SEC HFCAA Final Rule provides flexibility to Commission-Identified
Issuers (as defined in the Holding Foreign Companies Accountable Act (“HFCA Act”)) to “permit Commission-Identified
Issuers to determine the appropriate documentation to submit in response to the requirement, based on their organizational structure and
other registrant-specific factors.” See SEC HFCAA Final Rule. In particular, the SEC specifically declined to “provide
an exclusive or non-exclusive list of what documentation may demonstrate that the registrant is not owned or controlled by the relevant
governmental entity. [The SEC] believe[s] that such a list may be too limiting or become the de facto means of satisfying the requirement.
[The SEC] believe[s] that Commission-Identified Issuers should instead make a determination of what documentation meets the requirement
for their particular company. [The SEC] also believe[s] that not prescribing the specific documentation Commission-Identified Issuers
must submit will limit compliance costs and could result in more relevant information being provided to investors.” See SEC
HFCAA Final Rule (emphasis added).

The Company has specified in its submission under paragraph (a) of
Item 16I in Exhibit 15.5 to the 2022 Annual Report that the Company has identified the appropriate documents in response to the requirement
under paragraph (a) of Item 16I based on its organizational structure and other registrant-specific factors, namely, its register of members
and Public Filings (as defined in the Exhibit 15.5) made by its shareholders.

In addition, the Company believes that whether a particular entity
is owned or controlled by a governmental entity in the foreign jurisdiction is a question of fact rather than a legal issue that counsel
can opine on. The Company therefore believes that legal opinions may not be appropriate documents in response to the requirement under
paragraph (a) of Item 16I.

Furthermore, the Company does not believe it is reasonable to request
third party certifications, such as affidavits, from its shareholders. Unlike obligation to file Schedule 13G/13D, which is an obligation
imposed on relevant shareholders under the Exchange Act, disclosures requirement under Item 16I are obligations of Commission-Identified
Issuers. Accordingly, the Company does not believe it is reasonable to request its shareholders to provide written certifications, such
as affidavits.

As the Company has disclosed in its submission under paragraph
(a) of Item 16I in Exhibit 15.5, based on an examination of the Company’s register of members and Public Filings made by the
Company’s shareholders, the Company believe it has a reasonable basis to conclude that it is not controlled by a foreign
government entity. Specifically, Peter Luo act-in-concert group is a group of natural persons and senior management of the Company
who are not affiliated with any foreign government entity. Asia Ventures, F-Prime Capital and General Atlantic are well established
PE funds that are independent from foreign government entities. With respect to JSR and Wuxi Fund, the Company conducted inquiries
through electronic communication with such shareholders and confirmed that they are not owned or controlled by a PRC governmental
entity.

    2

As of March 31, 2023, the Principal Shareholders of the Company collectively
beneficially owned and controlled 68.9% of the Company’s total outstanding shares and voting power. Therefore, the Company believes
it is reasonable to rely on register of members and the Public Filings and inquiries with certain shareholders as to their government
ownership or support to form the basis for the Company to draw the conclusion as disclosed in its submission under paragraph (a) of Item
16I in Exhibit 15.5.

Required disclosures under paragraph (b) of Item 16I

With respect to required disclosures under paragraph (b)(2) and (b)(3)
of Item 16I, the Company respectfully advises the Staff that it believes that unlike the required submission under paragraph (a) of Item
16I, neither HFCA Act nor paragraph (b) of Item 16I requires disclosures of documentation or materials that the Company has reviewed or
relied on in connection with the required disclosures under paragraph (b) of Item 16I.

Section (2) of HFCA Act specifically requires the covered issuer to
“submit to the Commission documentation that establishes . . .” which corresponds to the required submission under
paragraph (a) of Item 16I; whereas Section (3) of HFCA Act, which corresponds to the required submission under paragraph (b) of Item 16I,
merely requires the covered issuer to disclose required information without requiring such issuer to further submit similar documentation
that establishes the basis for the required disclosures as it did in Section (2) of HFCA Act. Paragraphs (a) and (b) of Item 16I of Form
20-F adopt the statutory language of HFCA Act without further changes and do not require a Commission-Identified Foreign Issuer to submit
to the Commission documentation in connection with the required disclosures under paragraph (b) of Item 20-F.

Accordingly, the Company believes that it is not required under the
HFCA Act or Item 16I of Form 20-F to provide a similarly detailed discussion of the materials reviewed or legal opinions or third party
certifications relied upon in connection with the required disclosures under paragraphs (b)(2) or (3) of Item 16I.

 2. We note that your disclosures pursuant to Items 16I(b)(2), (b)(3), (b)(4), and (b)(5) are provided for “us,” “our,”
or “our operating entity.” We also note that your list of subsidiaries in Exhibit 8.1 appears to indicate that you have subsidiaries
in Hong Kong and countries outside China. Please note that Item 16I(b) requires that you provide disclosures for yourself and all of your
consolidated foreign operating entities.

 · With respect to (b)(2), please supplementally clarify the jurisdictions
in which your consolidated foreign operating entities are organized or incorporated and provide the percentage of your shares or the shares
of your consolidated operating entities owned by governmental entities in each foreign jurisdiction in which you have consolidated operating
entities in your supplemental response.

 · With respect to (b)(3), (b)(4), and (b)(5), please provide the required
information for you and all of your consolidated foreign operating entities in your supplemental response.

With respect to (b)(2), in response to the Staff’s comment,
the Company respectfully advises the Staff that, each of the Company’s consolidated foreign operating entities as disclosed in
Exhibit 8.1 is directly wholly-owned by its respective shareholder, which is also a consolidated operating entity of the Company,
and directly or indirectly wholly-owned by Adagene Inc. For detailed equity ownership structure and respective jurisdiction in which
the Company’s consolidated foreign operating entities are organized or incorporated, please refer to the corporate structure
chart as disclosed under Item 4.C. on page 154 of 2022 Annual Report. Accordingly, none of the shares of the Company’s
consolidated operating entities is owned by governmental entities in each foreign jurisdiction in which it has consolidated
operating entities.

    3

The Company also re-confirms that to the best of its knowledge,
as of the date of 2022 Annual Report, none of Adagene Inc.’s shares are owned by governmental entities in the jurisdiction in
which the registrant is incorporated or otherwise organized, namely, Cayman Islands, Hong Kong, PRC, United States, Singapore,
Australia, and Switzerland.

With respect to (b)(3), the Company respectfully advises the
Staff that because each of the Company’s consolidated foreign operating entities is directly wholly-owned by its respective
shareholder (i.e. another consolidated operating entity of the Company) and directly or indirectly wholly-owned by Adagene Inc.,
governmental entities in the applicable foreign jurisdiction with respect to the Company’s registered public accounting firm,
therefore, do not have a controlling financial interest in any of the Company’s consolidated foreign operating entities.

The Company also re-confirms that to the best of its knowledge, as
of the date of 2022 Annual Report, none of the governmental entities in the applicable foreign jurisdiction with respect to the Company’s
registered public accounting firm have a controlling financial interest in Adagene Inc.

With respect to (b)(4), the Company respectfully submits that the original
disclosures under paragraph (b)(iii) under Item 16I of 2022 Annual Report have already covered required information for both Adagene Inc.
and all of the Company’s consolidated foreign operating entities. The Company re-confirms that to the best of its knowledge, as
of the date of 2022 Annual Report, none of the members of board of directors of Adagene Inc. or none of the members of the board of directors
of each of the Company’s consolidated foreign operating entities is an official of the Chinese Communist Party.

With respect to (b)(5), the Company respectfully submits that as of
the date of 2022 Annual Report, the effective memorandum and articles of association of Adagene Inc. and the articles of incorporation
(or equivalent organizing document) of each of the Company’s consolidated foreign operating entities do not contain any charter
of the Chinese Communist Party, including the text of any such charter.

 3. In order to clarify the scope of your review, please supplementally describe the steps you have taken to confirm that none of the
members of your board or the boards of your consolidated foreign operating entities are officials of the Chinese Communist Party. For
instance, please tell us how the board members’ current or prior memberships on, or affiliations with, committees of the Chinese
Communist Party factored into your determination. In addition, please tell us whether you have relied upon third party certifications
such as affidavits as the basis for your disclosure.

In response to the Staff’s comment, the Company respectfully
advises the Staff that in preparation of its required disclosure under paragraph (b)(4) of Item 16I of Form 20-F, the Company conducted
written inquiries via email to each member of the board of directors of (a) Adagene Inc. and (b) each of its consolidated foreign operating
entities (each a “Director”, collectively “Directors”) to determine whether a Director is an official
of the Chinese Communist Party. The Company has factored the Directors’ current or prior memberships on, or affiliations with, committees
of the Chinese Communist Party into its determination in connection with its disclosures under paragraph (b)(4) of Item 16(I).

Each of the Directors confirmed that he or she is not a member of
the Chinese Communist Party. Accordingly, the Company re-confirms that to the best of its knowledge, as of the date of 2022 Annual
Report, none of the members of board of directors of Adagene Inc. or none of the members of the board of directors of each of the
Company’s consolidated foreign operating entities is an official of the Chinese Communist Party.

    4

 4. With respect to your disclosure pursuant to Item 16I(b)(5), we note that you have included language that such disclosure is “to
our best knowledge.” Please supplementally confirm without qualification, if true, that your articles and the articles of your consolidated
foreign operating entities do not contain wording from any charter of the Chinese Communist Party.

The Company respectfully submits that as of the date of 2022 Annual
Report, the effective memorandum and articles of association of Adagene Inc. and the articles of incorporation (or equivalent organizing
document) of each of the Company’s consolidated foreign operating entities did not contain any charter of the Chinese Communist
Party, including the text of any such charter.

Please kindly note that this statement is being made without “best
knowledge” qualification as indicated in the Staff’s comment.

Consolidated Financial Statements

Note 9. Share-Based Compensation, page F-21

 5. We note that on November 9, 2020, the company passed a board resolution to waive the vesting schedules and conditions of 2,375,000
share options granted to certain management members. Pursuant to this board resolution, these management members exercised all related
share options and paid the exercise price by issuing recourse promissory notes in the total amount of US$5,197,650. Additionally, we note
that you determined in accordance with guidance set out in ASC 718-10-55-31 that there has been no substantial change to the vesting conditions
and the company shall continue to account for the share awards in accordance with their original terms. You disclose that as of December
31, 2021, there were 1,585,000 shares unvested according to the original vesting conditions. Please tell us and revise future filings

United States securities and exchange commission logo
June 5, 2023
Raymond Tam
Chief Financial Officer
Adagene Inc.
4F, Building C14, No. 218
Xinghu Street, Suzhou Industrial Park
Suzhou, Jiangsu Province, 215123
People’s Republic of China
Re:Adagene Inc.
Annual Report on Form 20-F for the fiscal year ended December 31, 2022
Filed April 28, 2023
File No. 001-39997
Dear Raymond Tam:
            We have reviewed your filing 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 these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
            After reviewing your response to these comments, we may have additional comments.
Annual Report on Form 20-F for the fiscal year ended December 31, 2022
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections, page 212
1.We note your statement that you reviewed your register of members and public filings
made by your shareholders in connection with your required submission under paragraph
(a).  Please supplementally describe any additional materials that were reviewed and tell
us whether you relied upon any legal opinions or third party certifications such as
affidavits as the basis for your submission.  In your response, please provide a similarly
detailed discussion of the materials reviewed and legal opinions or third party
certifications relied upon in connection with the required disclosures under paragraphs
(b)(2) and (3).

 FirstName LastNameRaymond Tam
 Comapany NameAdagene Inc.
 June 5, 2023 Page 2
 FirstName LastName
Raymond Tam
Adagene Inc.
June 5, 2023
Page 2
2.We note that your disclosures pursuant to Items 16I(b)(2), (b)(3), (b)(4), and (b)(5) are
provided for “us,” “our,” or “our operating entity.”  We also note that your list of
subsidiaries in Exhibit 8.1 appears to indicate that you have subsidiaries in Hong Kong
and countries outside China.  Please note that Item 16I(b) requires that you provide
disclosures for yourself and all of your consolidated foreign operating entities.
•With respect to (b)(2), please supplementally clarify the jurisdictions in which your
consolidated foreign operating entities are organized or incorporated and provide the
percentage of your shares or the shares of your consolidated operating entities owned
by governmental entities in each foreign jurisdiction in which you have consolidated
operating entities in your supplemental response.
•With respect to (b)(3), (b)(4), and (b)(5), please provide the required information for
you and all of your consolidated foreign operating entities in your supplemental
response.
3.In order to clarify the scope of your review, please supplementally describe the steps you
have taken to confirm that none of the members of your board or the boards of your
consolidated foreign operating entities are officials of the Chinese Communist Party.  For
instance, please tell us how the board members’ current or prior memberships on, or
affiliations with, committees of the Chinese Communist Party factored into your
determination.  In addition, please tell us whether you have relied upon third party
certifications such as affidavits as the basis for your disclosure.
4.With respect to your disclosure pursuant to Item 16I(b)(5), we note that you have included
language that such disclosure is “to our best knowledge.”  Please supplementally confirm
without qualification, if true, that your articles and the articles of your consolidated
foreign operating entities do not contain wording from any charter of the Chinese
Communist Party.
Consolidated Financial Statements
Note 9. Share-Based Compensation, page F-21
5.We note that on November 9, 2020, the company passed a board resolution to waive the
vesting schedules and conditions of 2,375,000 share options granted to certain
management members.  Pursuant to this board resolution, these management members
exercised all related share options and paid the exercise price by issuing recourse
promissory notes in the total amount of US$5,197,650.  Additionally, we note that you
determined in accordance with guidance set out in ASC 718-10-55-31 that there has been
no substantial change to the vesting conditions and the company shall continue to account
for the share awards in accordance with their original terms.  You disclose that as of
December 31, 2021, there were 1,585,000 shares unvested according to the original
vesting conditions.  Please tell us and revise future filings to disclose the number of
unvested shares as of the end of the period of the financial statements.  Additionally with a
view towards disclosure, tell us whether these unvested shares are included in the table on
page F-33 of potentially dilutive securities that have not been included in the calculation

 FirstName LastNameRaymond Tam
 Comapany NameAdagene Inc.
 June 5, 2023 Page 3
 FirstName LastName
Raymond Tam
Adagene Inc.
June 5, 2023
Page 3
of diluted net loss per share.
6.As a related matter, we note that on January 16, 2021, the company passed a board
resolution whereby certain management members surrendered a total of 491,119 ordinary
shares as repayment for their respective promissory notes issued in connection with the
exercising of options granted to them.  Please tell us and revise future filings to disclose
whether these ordinary shares are part of the 2,375,000 shares issued on November 9,
2020 or whether the shares are from other ordinary shares already held by those
management members and how you accounted for the surrendered shares.  Cite the
applicable accounting guidance which supports your treatment.
            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.
            You may contact Lynn Dicker at 202-551-3616 or Kevin Kuhar at 202-551-3662 if you
have questions regarding comments on the financial statements and related matters.  Contact
Kyle Wiley at 202-344-5791 or Christopher Dunham at 202-551-3783 if you have any questions
about comments related to your status as a Commission-Identified Issuer during your most
recently completed fiscal year.  Contact Jimmy McNamara at 202-551-7349 or Tim
Buchmiller at 202-551-3635 with any other questions.
Sincerely,
Division of Corporation Finance
Office of Life Sciences
cc:       Xuelin Wang, Esq.

CORRESP
1
filename1.htm

Adagene Inc.

4F, Building C14, No. 218

Xinghu Street, Suzhou Industrial Park

Suzhou, Jiangsu Province, 215123

People’s Republic of China

May 24, 2022

VIA EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549

Attention: Mr. Alan Campbell

    Ms. Celeste
Murphy

Re:           Adagene
Inc.

Registration Statement on Form F-3

Filed April 26, 2022

File No. 333-264486

Ladies and Gentlemen:

On behalf of Adagene Inc.,
(the “Company”), and pursuant to Rule 461 under the Securities Act of 1933, as amended, the undersigned respectfully
requests that the effective date for the above-referenced Registration Statement on Form F-3 be accelerated so that
it will be declared effective at 4:30 p.m. on May 26, 2022, or as soon thereafter as is practicable.

Please
direct any questions regarding the foregoing to Xuelin (Steve) Wang at +852 2533-1092 (xuelin.wang@davispolk.com) of Davis Polk &
Wardwell LLP, counsel to the Company.

    Sincerely,

    /s/ Peter (Peizhi) Luo

    Peter (Peizhi) Luo

    Chief Executive Officer

    Adagene Inc.

cc: Xuelin (Steve) Wang, Esq.

CORRESP
1
filename1.htm

    Davis Polk & Wardwell

    Hong Kong Solicitors

    The Hong Kong Club Building

    3A Chater Road

    Hong Kong

    davispolk.com

    Resident Hong Kong Partners

    Karen Chan **

    Yang Chu **

    James C. Lin *

    Gerhard Radtke *

    Martin Rogers **

    Patrick S. Sinclair *

    Miranda So *

    James Wadham **

    Xuelin Wang *

    Hong Kong Solicitors

    * Also Admitted in New York

    ** Also Admitted in England and Wales

May 13, 2022

    Re:

    Adagene Inc.

    Registration Statement on Form F-3

    Filed April 26, 2022

    File No. 333-264486

Confidential

Mr. Alan Campbell

Ms. Celeste Murphy

Office of Life Sciences

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Dear Mr. Alan Campbell and Ms. Celeste Murphy:

On behalf of Adagene Inc. (the “Company”),
a company incorporated under the laws of the Cayman Islands, we submit to the staff (the “Staff”) of the Securities
and Exchange Commission (the “Commission”) this letter setting forth the Company’s responses to the comments
contained in the Staff’s letter dated May 6, 2022 on the Company’s registration statement on Form F-3 filed on April 26, 2022
(the “Registration Statement”). Concurrently with the submission of this letter, the Company is filing an amendment
No. 1 to the Registration Statement (the “Amendment No. 1”) and certain exhibits via EDGAR to the Commission for review
in accordance with the procedures of the Commission. On behalf of the Company, we wish to thank you and other members of the staff of
the Commission (the “Staff”) for your prompt response to the Company’s request for comments.

The Company has responded to all of the Staff’s
comments by revising the Registration Statement to address the comments, by providing an explanation if the Company has not so revised
the Registration Statement, or by providing supplemental information as requested. The Staff’s comments are repeated below in bold,
followed by the Company’s response to the comments as well as a summary of the responsive actions taken. We have included page numbers
to refer to the location in the Amendment No. 1 where the language addressing a particular comment appears.

    Davis Polk includes Davis Polk & Wardwell LLP and its associated entities.

*          *          *          *

Registration Statement on Form F-3

Cover Page

 1. Please revise your cover page to state whether your auditor is subject to the determinations announced by the PCAOB on December
16, 2021 and whether and how the Holding Foreign Companies Accountable Act and related regulations, including the potential Accelerating
Holding Foreign Companies Accountable Act, will affect your company. In your revisions, please discuss the time periods for any potential
prohibition on trading.

In response to the Staff’s comment, the Company has
revised the disclosure on cover page of the Amendment No. 1.

 2. Please provide prominent disclosure here, in the Our Company section and in Risk Factors disclosing that you were provisionally
identified by the Commission on May 4, 2022 under the HFCAA. Refer to https://www.sec.gov/hfcaa.

In response to the Staff’s comment, the Company has
revised the disclosure on cover page, pages 7 and 19 of the Amendment No. 1.

 3. Please revise your prospectus cover page to clarify that any potential secondary offerings of securities made pursuant to the registration
statement are limited to currently outstanding securities. For guidance, please refer to General Instruction I.B.3 of Form F-3.

In response to the Staff’s comment, the Company has
revised the disclosure on cover page of the Amendment No. 1.

Our Company, page 3

 4. Please revise this section, where appropriate, to state whether you or your subsidiaries are covered by permissions requirements
from the China Securities Regulatory Commission (CSRC), Cyberspace Administration of China (CAC) or any other governmental agency that
is required to approve your or your subsidiaries' operations. Please also describe the consequences to you and your investors if you or
your subsidiaries: (i) do not receive or maintain such permissions or approvals, (ii) inadvertently conclude that such permissions or
approvals are not required or (iii) applicable laws, regulations, or interpretations change and you are required to obtain such permissions
or approvals in the future.

In response to the Staff’s comment, the Company has
revised the disclosure on page 13 of the Amendment No. 1.

    May 13, 2022 2

 5. Please revise your disclosure to state whether you have specific cash management policies and procedures in place that dictate
how funds are transferred through your organization and if applicable, describe these policies and procedures in greater detail.

In response to the Staff’s comment, the Company has
revised the disclosure on page 14 of the Amendment No. 1.

Risk Factors

Failure to comply with existing or future laws…, page
21

 6. Please revise the disclosure underneath this heading, or elsewhere, as appropriate, to explain to what extent you believe you are
compliant with the regulations or policies that have been issued by the CAC to date.

In response to the Staff’s comment, the Company has
revised the disclosure on pages 11 and 23 of the Amendment No. 1.

Enforceability of Civil Liabilities, page 70

 7. Please expand your disclosure to specifically discuss whether you have officers or directors located in China, and if so, address
the difficulty of bringing actions and enforcing judgments against individuals located in China. Please also include relevant summary
risk factor and risk factor disclosure, as applicable.

In response to the Staff’s comment, the Company has
revised the disclosure on page 71 of the Amendment No. 1.

Exhibits

 8. With reference to General Instruction I.B.3 of Form F-3, please revise your Exhibit 5.1 opinion with respect to the securities
to be potentially offered by selling shareholders to clarify that such securities were duly authorized and are currently validly issued,
fully paid and non-assessable.

In response to the Staff’s comment, the Company has
revised the Exhibit 5.1 opinion to clarify that with respect to the Ordinary Shares that were issued and outstanding as of May 13, 2022,
which may be potentially offered by selling shareholders, such securities were duly authorized and are currently validly issued, fully
paid and non-assessable.

With respect to the Ordinary Shares that will be
issued and outstanding subsequent to May 13, 2022 and prior to any shelf takedown (such Ordinary Shares, the “Then
Currently Outstanding Ordinary Shares”), the Company will file Exhibit 5.1 opinion on the Form 6-K and incorporate by
reference into the Registration Statement to opine that the Then Currently Outstanding Ordinary Shares were duly authorized and are
currently validly issued, fully paid and non-assessable, if any selling shareholders plan to offer such Then Currently Outstanding
Ordinary Shares as contemplated by the Registration Statement, as amended, and applicable prospectus supplement.

    May 13, 2022 3

If you have any questions regarding this submission, please contact
Xuelin (Steve) Wang at +852 2533-1092 (xuelin.wang@davispolk.com), or Raymond Tam, the Company’s CFO, at +852 9873-6186 (raymond_tam@adagene.com).

Thank you for your time and attention.

  Yours sincerely,

    /s/ Xuelin (Steve) Wang

  Xuelin (Steve) Wang

    cc:

    Mr.  Peter (Peizhi) Luo, Chief Executive Officer and
Chairman

Mr.  Raymond Tam, Chief Financial Officer

Adagene Inc.

    May 13, 2022 4

United States securities and exchange commission logo
May 6, 2022
Peter (Peizhi) Luo
Chief Executive Officer
Adagene Inc.
4F, Building C14, No. 218
Xinghu Street, Suzhou Industrial Park
Suzhou, Jiangsu Province, 215123
People’s Republic of China
Re:Adagene Inc.
Registration Statement on Form F-3
Filed April 26, 2022
File No. 333-264486
Dear Mr. Luo:
            We have limited our review of your registration statement to those issues we have
addressed in our 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-3
Cover Page
1.Please revise your cover page to state whether your auditor is subject to the
determinations announced by the PCAOB on December 16, 2021 and whether and how
the Holding Foreign Companies Accountable Act and related regulations, including the
potential Accelerating Holding Foreign Companies Accountable Act, will affect your
company. In your revisions, please discuss the time periods for any potential prohibition
on trading.

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 May 6, 2022 Page 2
 FirstName LastNamePeter (Peizhi) Luo
Adagene Inc.
May 6, 2022
Page 2
2.Please provide prominent disclosure here, in the Our Company section and in Risk
Factors disclosing that you were provisionally identified by the Commission on May 4,
2022 under the HFCAA. Refer to https://www.sec.gov/hfcaa.
3.Please revise your prospectus cover page to clarify that any potential secondary offerings
of securities made pursuant to the registration statement are limited to currently
outstanding securities. For guidance, please refer to General Instruction I.B.3 of Form F-3.
Our Company, page 3
4.Please revise this section, where appropriate, to state whether you or your subsidiaries are
covered by permissions requirements from the China Securities Regulatory Commission
(CSRC), Cyberspace Administration of China (CAC) or any other governmental agency
that is required to approve your or your subsidiaries' operations. Please also describe the
consequences to you and your investors if you or your subsidiaries: (i) do not receive or
maintain such permissions or approvals, (ii) inadvertently conclude that such permissions
or approvals are not required or (iii) applicable laws, regulations, or interpretations change
and you are required to obtain such permissions or approvals in the future.
Transfer of Funds and Other Assets, page 13
5.Please revise your disclosure to state whether you have specific cash management policies
and procedures in place that dictate how funds are transferred through your organization
and if applicable, describe these policies and procedures in greater detail.
Risk Factors
Failure to comply with existing or future laws..., page 21
6.Please revise the disclosure underneath this heading, or elsewhere, as appropriate, to
explain to what extent you believe you are compliant with the regulations or policies that
have been issued by the CAC to date.
Enforceability of Civil Liabilities, page 70
7.Please expand your disclosure to specifically discuss whether you have officers or
directors located in China, and if so, address the difficulty of bringing actions and
enforcing judgments against individuals located in China. Please also include relevant
summary risk factor and risk factor disclosure, as applicable.
Exhibits
8.With reference to General Instruction I.B.3 of Form F-3, please revise your Exhibit 5.1
opinion with respect to the securities to be potentially offered by selling shareholders to
clarify that such securities were duly authorized and are currently validly issued, fully
paid and non-assessable.
            We remind you that the company and its management are responsible for the accuracy

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 May 6, 2022 Page 3
 FirstName LastName
Peter (Peizhi) Luo
Adagene Inc.
May 6, 2022
Page 3
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.
            Please contact Alan Campbell at 202-551-4224 or Celeste Murphy at 202-551-3257 with
any questions.
Sincerely,
Division of Corporation Finance
Office of Life Sciences
cc:       Xuelin (Steve) Wang, Esq.

CORRESP
1
filename1.htm

Goldman Sachs (Asia) L.L.C.

68th Floor, Cheung Kong Center

2 Queen’s Road Central

Hong Kong

Morgan Stanley & Co. LLC

1585 Broadway

New York, New York 10036

U.S.A.

Jefferies LLC

520 Madison Avenue

New York, New York 10022

U.S.A.

As representatives of the prospective underwriters

VIA EDGAR

February 4, 2021

Office of Life Sciences

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Attention:

Mr. Jason Drory

Ms. Celeste   Murphy

Ms. Tracey Houser

Mr. Terence   O’Brien

Re:

Adagene Inc. (the “Company”)   (CIK No. 0001818838)

Registration Statement on   Form F-1, as amended (Registration No. 333-252210)

Registration Statement on   Form 8-A (Registration No. 001-39997)

Ladies and Gentlemen:

We hereby join the Company’s request for acceleration of the above-referenced Registration Statements, requesting effectiveness for 4:00 p.m., Eastern Time on February 8, 2021, or as soon thereafter as is practicable.

Pursuant to Rule 460 of the General Rules and Regulations promulgated under the Securities Act of 1933, as amended, we wish to advise you that between February 3, 2021 and the date hereof, approximately 4,310 copies of the preliminary prospectus of the Company dated February 3, 2021 were distributed to prospective underwriters, dealers, institutional investors and others.

We have been advised by the prospective underwriters that they have complied and will continue to comply with the requirements of Rule 15c2-8 under the Securities Exchange Act of 1934, as amended.

[Signature page follows]

Very truly yours,

As representatives of the prospective   underwriters

GOLDMAN SACHS (ASIA) L.L.C.

By:

/s/ Michael Chiu

Name:

Michael Chiu

Title:

Managing Director

MORGAN   STANLEY & CO. LLC

By:

/s/ Frank Tang

Name:

Frank Tang

Title:

Executive Director

Jefferies LLC

By:

/s/ Matthew Kim

Name:

Matthew Kim

Title:

Managing Director

[Underwriters’ Acceleration Request]

CORRESP
1
filename1.htm

February 4, 2021

VIA EDGAR

Mr. Jason Drory

Ms. Celeste Murphy

Ms. Tracey Houser

Mr. Terence O’Brien

Office of Life Sciences

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Re:

Adagene Inc. (CIK No. 0001818838)
 Registration Statement on   Form F-1 (File No. 333-252210)
 Registration Statement on Form 8-A (File No. 001-39997)

Ladies and Gentlemen:

In accordance with Rule 461 of the General Rules and Regulations under the Securities Act of 1933, as amended, Adagene Inc. (the “Company”) hereby requests that the effectiveness of the above-referenced Registration Statement on Form F-1, as amended (the “Registration Statement”) be accelerated to and that the Registration Statement become effective at 4:00 p.m., Eastern Time, on February 8, 2021, or as soon thereafter as practicable.

The Company also requests that the Registration Statement on Form 8-A under the Securities Exchange Act of 1934, as amended, covering the American depositary shares representing ordinary shares of the Company, be declared effective concurrently with the Form F-1 Registration Statement (the Form F-1 Registration Statement, together with the Registration Statement on Form 8-A, the “Registration Statements”).

If there is any change in the acceleration request set forth above, the Company will promptly notify you of the change, in which case the Company may be making an oral request of acceleration of the effectiveness of the Registration Statements in accordance with Rule 461. The request may be made by an executive officer of the Company or by any attorney from the Company’s U.S. counsel, Davis Polk & Wardwell LLP.

The Company understands that the representatives of the underwriters of the offering, have joined in this request in a separate letter filed with the Securities and Exchange Commission (the “Commission”) today.

The Company hereby acknowledges the following:

·                  should the Commission or the staff of the Commission (the “Staff”), acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing;

·                  the action of the Commission or the Staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and

·                  the Company may not assert Staff comments and the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

[Signature page follows]

2

Very truly yours,

Adagene Inc.

By:

/s/ Peter (Peizhi) Luo

Name:

Peter (Peizhi) Luo

Title:

Chief Executive Officer and Director

[Signature Page to Issuer Acceleration Request]

CORRESP
1
filename1.htm

New York
   Northern California
   Washington DC
   São Paulo
   London

Paris
   Madrid
   Hong Kong
   Beijing
   Tokyo

Resident Hong Kong   Partners

Davis   Polk & Wardwell
 Hong Kong Solicitors

The Hong Kong Club Building
   3A Chater Road
   Hong Kong

852 2533 3300 tel

Karen Chan †                                    Martin Rogers †

Yang Chu †                                               Patrick S. Sinclair*

James C. Lin*                                   Miranda So*

Gerhard Radtke*                  James Wadham†

Hong Kong Solicitors
    * Also Admitted in New York
    † Also Admitted in England and Wales

February 4, 2021

Re:

Adagene Inc.

Daniel Auerbach   Resignation Letters

VIA EDGAR

Mr. Jason Drory

Ms. Celeste Murphy

Office of Life Sciences

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Dear Mr. Jason Drory and Ms. Celeste Murphy:

On behalf of Adagene Inc. (the “Company”), an exempted company with limited liability incorporated under the laws of the Cayman Islands, we submit to the staff (the “Staff”) the enclosed resignation letters (the “Resignation Letters”) of Daniel Auerbach, a member of each of the boards of directors (the “Boards”) of the Company and certain of its subsidiaries, including Adagene (Hong Kong) Limited, Adagene Incorporated and Adagene (Suzhou) Limited. The Resignation Letters were previously delivered to the Company to inform it that Mr. Auerbach will automatically resign as a member of each of the Boards effective as of immediately prior to, and contingent upon, the effectiveness of the Company’s registration statement on Form F-1 (File No.: 333-252210), and that Mr. Auerbach will not be responsible for any part of such registration statement.

This letter is being furnished to the Staff in accordance with Section 11(b)(1) of the Securities Act of 1933, as amended, to notify the Staff that Mr. Auerbach will not be responsible for the contents of the Company’s registration statement on Form F-1 (File No.: 333-252210), including any amendments thereto.

If you have any questions regarding these matters, please contact Li He at +852 2533-3306 (li.he@davispolk.com) or Steve Wang at +852 2533-1092 (xuelin.wang@davispolk.com).

Thanks for your time and attention.

Davis Polk includes Davis Polk & Wardwell LLP and its associated entities.

Yours sincerely,

/s/ Li He

cc:

Mr.  Peter (Peizhi) Luo, Chief Executive Officer and Chairman

Mr.  Raymond Tam, Chief Financial Officer

Adagene Inc.

2

February 4th, 2021

Adagene Inc.

4F, Building C14, No. 218

Xinghu Street, Suzhou Industrial Park

Suzhou, Jiangsu Province, 215123

People’s Republic of China

To the Board of Directors

Re: Resignation as a Director

Ladies and Gentlemen:

I, Daniel Auerbach, write to inform you that I hereby automatically resign from the board of directors (the “Board”) of Adagene Inc. (the “Company”), and all committees of the Board (if any), effective as of immediately prior to, and contingent upon, the effectiveness of the Company’s registration statement on Form F-1 (File No.: 333-252210) in connection with the Company’s initial public offering, and that I will not be responsible for any part of such registration statement. In the event that such registration is not effective prior to February 28, 2021, this letter of resignation shall be deemed withdrawn without having been given effect.

Very truly yours,

/s/ Daniel Auerbach

Name: Daniel Auerbach

February 4th, 2021

Adagene (Hong Kong) Limited

Room 2701, 27/F, Tesbury Centre

28 Queen’s road

Central, HK

To the Board of Directors

Re: Resignation as a Director

Ladies and Gentlemen:

I, Daniel Auerbach, write to inform you that I hereby automatically resign from the board of directors (the “Board”) of Adagene (Hong Kong) Limited (the “Company”), and all committees of the Board (if any), effective as of immediately prior to, and contingent upon, the effectiveness of the registration statement on Form F-1 (File No.: 333-252210) of Adagene Inc. (“Adagene”), the sole shareholder of the Company, in connection with Adagene’s initial public offering. In the event that such registration is not effective prior to February 28, 2021, this letter of resignation shall be deemed withdrawn without having been given effect.

Very truly yours,

/s/ Daniel Auerbach

Name: Daniel Auerbach

February 4th, 2021

Adagene Incorporated

315 Montgomery St., Suite 900

San Francisco, CA 94104

To the Board of Directors

Ladies and Gentlemen:

I, Daniel Auerbach, write to inform you that I hereby automatically resign from the board of directors (the “Board”) of Adagene Incorporated (the “Company”), and all committees of the Board (if any), effective as of immediately prior to, and contingent upon, the effectiveness of the registration statement on Form F-1 (File No.: 333-252210) of Adagene Inc. (“Adagene”), the sole shareholder of the Company, in connection with Adagene’s initial public offering. In the event that such registration is not effective prior to February 28, 2021, this letter of resignation shall be deemed withdrawn without having been given effect.

Very truly yours,

/s/ Daniel Auerbach

Name: Daniel Auerbach

February 4th, 2021

2021 年 2 月 4 日

Adagene (Suzhou) Limited

天演药业（苏州）有限公司

4F, Building C14, No. 218

Xinghu Street, Suzhou Industrial Park

Suzhou, Jiangsu Province, 215123

People’s Republic of China

218 号 C14 楼 4 楼

苏州工业园区星湖街

江苏省苏州市,邮编 215123

中华人民共和国

To the Board of Directors

致董事会

Re: Resignation as a Director

关于：辞任董事

Ladies and Gentlemen:

敬启者：

I, Daniel Auerbach, write to inform you that I hereby automatically resign from the board of directors (the “Board”) of Adagene (Suzhou) Limited (the “Company”), and all committees of the Board (if any), effective as of immediately prior to, and contingent upon, the effectiveness of the registration statement on Form F-1 (File No.: 333-252210) of Adagen Inc. (“Adagene”), the Company’s 100% indirect parent company, in connection with Adagene’s initial public offering. In the event that such registration is not effective prior to February 28, 2021, this letter of resignation shall be deemed withdrawn without having been given effect.

本人，Daniel Auerbach，在此正式通知您我将自动从天演药业（苏州）有限公司 （以下简称”公司”）的董事会（以下简称”董事会”）及以及董事会的所有委员会辞任。该辞任取决于 Adagene Inc.（公司的 100%间接母公司）首次公开募股而递交的表格 F-1 的注册声明（注册号：333-252210）是否正式生效，并于紧接其生效之前即刻发生效力。如若前述注册声明在 2021 年 2 月 28 日之前未能生效，则本辞任信应视为已撤回而未生效。

Very truly yours,

此致！

/s/ Daniel Auerbach

Name 姓名: Daniel Auerbach

CORRESP
1
filename1.htm

New York

Northern California

Washington DC

São Paulo

London

Paris

Madrid

Hong Kong

Beijing

Tokyo

Resident   Hong Kong Partners

Davis   Polk & Wardwell
 Hong Kong Solicitors
 The Hong Kong Club Building
   3A Chater Road
   Hong Kong

852 2533 3300 tel

Karen Chan †
   Yang Chu †
   James C. Lin*
   Gerhard Radtke*

Martin Rogers †
   Patrick S. Sinclair*
   Miranda So*
   James Wadham†

Hong   Kong Solicitors
    * Also Admitted in New York
    † Also Admitted in England and Wales

February 3, 2021

Re:

Adagene Inc.

Amendment No. 1 to   Registration Statement on Form F-1

Filed February 1,   2021

File No. 333-252210

Confidential

Mr. Jason Drory

Ms. Celeste Murphy

Ms. Tracey Houser

Mr. Terence O’Brien

Office of Life Sciences

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Dear Mr. Jason Drory, Ms. Celeste Murphy, Ms. Tracey Houser and Mr. Terence O’Brien:

On behalf of Adagene Inc. (the “Company”), a company incorporated under the laws of the Cayman Islands, we submit to the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) this letter setting forth the Company’s responses to the comments contained in the Staff’s letter dated February 1, 2021 on the Company’s Amendment No. 1 to registration statement on Form F-1 filed on February 1, 2021 (the “Amended Registration Statement”). Concurrently with the submission of this letter, the Company is filing Amendment No. 2 to its registration statement on Form F-1 (the “Further Amended Registration Statement”).

To facilitate your review, we have separately delivered to you today four courtesy copies of the Further Amended Registration Statement, marked to show changes to the Amended Registration Statement, and two copies of the submitted exhibits.

The Company has responded to all of the Staff’s comments by revising the Amended Registration Statement to address the comments, by providing an explanation if the Company has not so revised the Amended Registration Statement, or by providing supplemental information as requested. The Staff’s comments are repeated below in bold, followed by the Company’s response to the comments as well as a summary of the responsive actions taken. We have included page numbers to refer to the location in the Further Amended Registration Statement where the language addressing a particular comment appears.

Davis Polk includes Davis Polk & Wardwell LLP and its associated entities.

The Company has included the estimated price range and offering size in the Further Amended Registration Statement and has launched the road show after such filing. Subject to the market conditions and the Staff’s comments, the Company intends to request that the Staff declare the effectiveness of the Further Amended Registration Statement on February 8, 2021. A registration statement on Form F-6 relating to the ADSs has been filed with the Commission on January 29, 2021.  The Company would greatly appreciate the Staff’s continued assistance and support in meeting the timetable.

*              *              *              *

Amendment No. 1 to Registration Statement on Form F-1 filed February 1, 2021

17. Subsequent Events, page F-39

1.              For the November 9, 2020 option modifications, please remove the disclosure stating the modification is exempt under ASU 2017-09, as modifications to vesting terms do not qualify for exemption from modification of awards accounting under ASC 718. Please disclose the amount of compensation expense to be recognized during the fourth quarter of fiscal year 2020 from waiving the remaining vesting schedule and conditions (i.e., the amount of unrecognized compensation expense remaining to be recognized since the date of grant) for the 2,375,000 options.

In response to the Staff’s comment above, the Company respectfully advises the Staff that although the 2,375,000 shares options are exercised and the ordinary shares are issued to the grantees, the Company still has the repurchase right to buy back such shares at the original exercise price if the grantee does not meet the original vesting conditions. The Company assessed and considered that in accordance with guidance set out in ASC 718-10-55-31, given such arrangement allows the shares received on exercise be returned to the Company if the original vesting conditions are not satisfied, there has been no substantial change to the vesting conditions and the Company shall continue to account for the share awards in accordance with their original terms. Accordingly, there is no acceleration of compensation expense to be recognized during the fourth quarter of fiscal year 2020. The Company has also revised the disclosure on page F-40 and F-72 of the Further Amended Registration Statement.

*              *              *              *

If you have any questions regarding this submission, please contact Li He at +852 2533-3306 (li.he@davispolk.com) or Steve Wang at +852 2533-1092 (xuelin.wang@davispolk.com) or Raymond Tam, the Company’s CFO, at +852 9873-6186 (raymond_tam@adagene.com), or Alex Zhuang of PricewaterhouseCoopers Zhong Tian LLP at +86 21-2323 3701 (alex.zhuang@cn.pwc.com).

Thanks for your time and attention.

2

Yours sincerely,

/s/ Li He

cc:

Mr.  Peter (Peizhi) Luo, Chief Executive Officer and Chairman
   Mr.  Raymond Tam, Chief Financial Officer
    Adagene Inc.

    Benjamin Su, Esq.,   Partner

Michael E. Sullivan, Esq., Partner

Daying Zhang, Esq., Partner
   Latham & Watkins LLP

   Alex Zhuang, Engagement Leader

PricewaterhouseCoopers Zhong Tian LLP

3

CORRESP
1
filename1.htm

New York
   Northern California
   Washington DC
   São Paulo
   London

Paris
   Madrid
   Hong Kong
   Beijing
   Tokyo

Resident Hong Kong   Partners

Davis   Polk & Wardwell
 Hong Kong Solicitors

The Hong Kong Club Building
   3A Chater Road
   Hong Kong

852 2533 3300 tel

Karen Chan †
   Yang Chu †
   James C. Lin*
   Gerhard Radtke*

Martin Rogers †
   Patrick S. Sinclair*
   Miranda So*
   James Wadham†

Hong Kong Solicitors
    * Also Admitted in New York
    † Also Admitted in England and Wales

CERTAIN PORTIONS OF THIS LETTER HAVE BEEN OMITTED FROM THE VERSION FILED VIA EDGAR. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. INFORMATION THAT WAS OMITTED IN THE EDGAR VERSION HAS BEEN NOTED IN THIS LETTER WITH A PLACEHOLDER IDENTIFIED BY THE MARK “[***]”.

FOIA CONFIDENTIAL TREATMENT REQUESTED

The entity requesting confidential treatment is

Adagene Inc.

4F, Building C14, No. 218,

Xinghu Street, Suzhou Industrial Park

Suzhou, Jiangsu Province, 25125

People’s Republic of China

+86-512-8777-3632

Rule 83 Confidential Treatment Request

January 28, 2021

BY Secured Electronic Transmission and EDGAR

Office of Life Sciences

Division of Corporation Finance
 U.S. Securities and Exchange Commission
 100 F Street, N.E.
 Washington, D.C. 20549-7561
 Attention:                       Mr. Jason Drory

Ms. Dorrie Yale

Ms. Tracey Houser

Mr. Terence O’Brien

Re:                             Adagene Inc. (CIK No. 0001818838)

Registration Statement on Form F-1 Filed January 19, 2021

(Registration Statement No. 333-252210)

Ladies and Gentlemen:

We are submitting this letter on behalf of Adagene Inc. (the “Company”) in connection with the review by the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) of the Company’s Registration Statement on Form F-1 (File No. 333-252210) initially filed January 19, 2021 (the “Registration Statement”).

Because of the commercially sensitive nature of the information contained herein, the Company respectfully requests that the specified information contained in this letter be treated as confidential information and that the Commission provide timely notice to Mr. Raymond Tam, Chief Financial Officer of the Company, before it permits any disclosure of the bracketed information in this letter.

The Company respectfully advises the Staff that, based on discussions with the Company’s board of directors and preliminary input provided by the underwriters for this offering, the Company anticipates that the price range for this offering will be [***] per ordinary share (the “Estimated IPO Price Range”). The indicative Estimated IPO Price Range assumes the implied valuation range of the Company’s market capitalization prior to the Company’s initial public offering at [***] million and [***] million (the “Estimated Pre-Money IPO Market Cap Range”). The indicative Estimated IPO Price Range represents an estimate of the fair value of the unrestricted, freely tradable shares that would be sold in the public market without liquidity and marketability discounts. The Company will include the actual price range in an amendment to the Registration Statement shortly before the commencement of the Company’s management roadshow. That price range will be subject to then-current market conditions, continuing discussions with the underwriters and certain other factors affecting the Company or this offering.

Summary of recent equity awards and issuance of Series C-3 convertible preferred shares

As of the date of the Registration Statement, awards to purchase a total of 3,601,522 ordinary shares have been granted and outstanding, excluding awards that were forfeited or cancelled after the relevant grant dates. The following information is in relation to the options granted in 2020 and 2021:

Grant Date (each, a
   “Valuation Date”)

Per share exercise price of options

Estimated fair value
   per ordinary share

2020.03.26

US$1.48 / US$1.83

[***]

2020.08.15

US$1.83 / US$2.26

[***]

2020.08.27

US$2.26

[***]

2020.10.26

US$2.26

[***]

2021.01.16

US$13.85

[***]

The valuation of the Company’s ordinary shares underlying the awards granted on March 26, 2020, August 15, 2020 and August 27, 2020 (such grant on August 27, 2020, the “August Grant”) was based on the valuation performed by an independent valuation firm (the “Independent Valuation Firm”) using market approach valuation by making reference to (a) the Company’s latest equity financing transaction of Series C-3 convertible preferred shares closed on December 19, 2019 and (b) discount for lack of marketability (“DLOM”). DLOM reflects the fact that the Company’s shares were privately-held shares. DLOM was quantified by Finnerty option pricing model. Under this method, the cost of the put option, which could be used to hedge the price change before the privately held shares can be sold, was considered as a basis to determine the DLOM. This option pricing method is one of the methods commonly used in estimating DLOM. The key assumptions of such model includes estimated dividend yields, timing of a liquidity event, and estimated volatility of our shares. The further the valuation date is from an expected liquidity event, the higher the put option value and thus the higher the implied DLOM. The lower DLOM is used for the valuation, the higher is the determined fair value of the ordinary shares.

According to the Company’s Independent Valuation Firm’s valuation model, assuming (i) a 60% likelihood of the Company’s initial public offering and (ii) no preferred rights associated with the ordinary shares converted from the Series C-3 convertible preferred shares, such as liquidation preference, the fair value of ordinary shares underlying the August Grant was derived to be [***] per share (the “Estimated August Grant Ordinary Share Fair Value”), representing an approximately [***] discount to the issue price of Series C-3 convertible preferred shares.

On October 26, 2020, the Company granted certain number of share options to newly joined executive officer and members of mid-level management (the “October Grant”). The fair value of ordinary shares underlying the October Grant was determined to be [***], using the interpolation method with reference to the Estimated August Grant Ordinary Share Fair Value and the Estimated January Grant Ordinary Share Fair Value (as defined below).

On January 16, 2021, the Company granted certain number of share options to its founder team (the “January Grant”). The estimated fair value per ordinary share underlying the January Grant was determined to be [***] (the “Estimated January Grant Ordinary Share Fair Value”), which was estimated after considering then implied valuation of the Company’s market capitalization, which is close to the Estimated Pre-Money IPO Market Cap Range, and DLOM.

The valuation of the Company’s share options on each Valuation Date was determined based on the valuation performed by the Independent Valuation Firm using Hull-White ESO Binomial tree model by making reference to, among various factors, fair value of the Company’s ordinary shares on each Valuation Date, the expected volatility based on stock price performances of 12 comparable publicly listed companies in the same industry, the exercise multiples and the risk-free rate. Both market approach valuation and binominal tree model are commonly used valuation methods introduced in the AICPA Audit and Accounting and Valuation Guide, “Valuation of Privately-Held-Company Equity Securities Issued as Compensation” (the “Guide”).

A detailed description of the valuation method used for the assessment of the fair value of the share options of the Company is set forth on pages 131 and 132 of the Registration Statement.

Difference between recent valuations leading up to the offering and estimated offering price

The difference between the mid-point of Estimated IPO Price Range [***] and the Estimated August Grant Ordinary Share Fair Value [***] under the valuation model is approximately [***] per share, representing a [***]% increase from the Estimated August Grant Ordinary Share Fair Value. Furthermore, the difference between the Estimated August Grant Ordinary Share Fair Value and the high end of the Estimated IPO Price Range [***] is approximately [***] or approximately [***]%.

In addition, according to the Company’s Independent Valuation Firm’s valuation model, the difference between the mid-point of Estimated IPO Price Range [***] and the Estimated January Grant Ordinary Share Fair Value [***] is approximately [***], representing a [***]% increase from the Estimated January Grant Ordinary Share Fair Value. Furthermore, the difference between the Estimated January Grant Ordinary Share Fair Value and the high end of the Estimated IPO Price Range [***] is approximately [***] or approximately [***]%.

Among the factors that were considered in setting the Estimated IPO Price Range were the following: (a) the Company’s stage of development, (b) progress of Company’s research and development efforts, (c) the impact of significant corporate events or milestones, (d) the general conditions of the securities market and the recent market prices of, and the demand for, publicly traded common stock of comparable companies; (e) the Company’s financial condition and prospects; (f) estimates of business potential and earnings prospects for the Company and the industry in which it operates; and (g) recent performance of initial public offerings of companies in the sector.

In particular, since the date of the August Grant, the Company has achieved several milestones:

·                  ADG106 — Since the date of the August Grant, the Company has achieved significant progress in the clinical development of one of its lead product candidates, ADG106, including:

·                  As of the November 30, 2020, the Data Cut-off Date, the Company has completed the Phase Ia dose escalation in each of its Phase I studies of ADG106 in both the United States and China as a monotherapy in patients with advanced or metastatic solid tumors and/or NHL. ADG106 was dose escalated up to 10 mg/kg and is well tolerated at dose expansion at 3 mg/kg, 5 mg/kg and at 300mg and 400 mg flat doses. A total number of 92 patients have been dosed. Both clinical trials, namely ADG106-1001 and ADG106-1002, have limited treatment emergent adverse events, or TEAEs, liver toxicity or hematologic abnormalities. One patient with a solid tumor who previously failed chemotherapies, radiotherapy, and an anti-PD-L1 antibody treatment showed a partial response to ADG106 treatment with a 40% tumor size reduction after two treatment cycles. In addition, two NHL patients showed more than a 30% tumor size reduction after one and two ADG106 treatment cycles, respectively. Furthermore, biomarker studies showed target engagement with specific pharmacodynamics biomarkers indicative of immune system activation, and clinical response correlated with changes in CD137 target engagement. These data are encouraging given that the enrolled population was not preselected and was heavily pretreated.

·                  The Company also identified a potential predictive biomarker which correlates with patient response to ADG106 treatment from a retrospective analysis of the ongoing Phase I clinical trial. Based on this finding, the Company is in the process of preparing an additional Phase II trial which the Company expects to initiate in 2021 and for which the Company intends to stratify and preselect patients using this predictive biomarker to potentially enhance clinical response of patients to ADG106 treatment. The Company also plans to pursue potential registrational trials evaluating ADG106 in biomarker enriched patient populations.

·                  The Company has received the National Medical Product Administration, or the NMPA, approval for the ADG106-1008 study in China, which is a Phase Ib/II combination trial of ADG106 with anti-PD-1 in advanced solid tumors and hematological malignancies. The Company is also in the preparation for a submission of a Clinical Trial Notification, or CTN, for its ADG106-1003 clinical trial in Australia, which will combine ADG106 with anti-PD-1, and other therapies in advanced solid tumors and hematological malignancies.

·                  ADG126

·                  The Company obtained authorization from the Australian Therapeutic Goods Administration, or the ATGA, under a CTN for ADG126-1001 for a Phase I trial in Australia. The first site of ADG126-1001 has been approved by the Australian authorities, investigational products have been released, and the site is ready to start patient screening. In addition, three potential patients have been identified for enrollment in the ADG126-1001 trial and the Company expects to commence patient enrollment by February.

·                  U.S. Food and Drug Administration, or the FDA, authorized the Company to proceed with its ADG126-1001 Phase I trial in the United States in 2021.

·                  ADG116

·                  Subsequent to the CTN authorization obtained from the ATGA in July 2020, the Company has successfully completed dose escalation at the first three doses in our ADG116-1003 clinical trial in Australia, including a dose level at 0.03mg/kg, which was the dose level used for the first patient in the ADG116 Phase I trial in the United States. As of January 15, 2021, no dose limiting toxicity or treatment related serious adverse events have been observed in any of the patients treated. There was no treatment induced liver toxicity and all three patients treated at 0.03mg/kg showed normal liver enzyme level post ADG116 treatment.

·                  Collaboration with Sanjin

·                  With the collaboration effort from the Company’s partner, Sanjin, ADG104 has progressed to Phase Ib and Phase II trials concurrently in China. In addition, Sanjin and its affiliates have recently filed an IND application for the second monoclonal antibody that the Company is collaborating with Sanjin, which has been accepted by the NMPA.

·                  Expansion of Leadership to support strategic growth

·                  The Company expanded its leadership team with the appointment of multiple executive officers and independent director nominees.  Dr. Gong’s contributions to securing regulatory approval for seven precision oncology drugs, Dr. Xu’s extensive oncology drug discovery and translational medicine experience and Dr. Zhao’s expertise in manufacturing will support the Company’s continued efforts on the discovery and design of novel antibodies and advancement of its immunotherapy clinical programs. Mr. Andy Cheung’s contributions as an independent director nominee and an audit committee chairman as well as Dr. Min Li’s expertise and industry insights will further support the Company’s improvement of its corporate governance and compliance with heightened standards as a publicly listed company.

·                  Establishing a center of excellence for precision medicine in San Diego, United States

·                  The Company recently secured laboratory and office space in San Diego to building out its team in San Diego with a focus on precision medicine and translational studies to support the acceleration of its Dynamic Precision Library platform for its partners and pipeline.

·                  Increased probability of an IPO and substantially enhanced liquidity and marketability of the Company’s ordinary shares

·                  The Estimated IPO Price Range represents a future price for ordinary shares that, if issued in the IPO, assumes a 100% probability of the consummation of the IPO and that, if issued in the IPO, the shares will be immediately freely tradable in a public market, whereas the Estimated August Grant Ordinary Share Fair Value represents a contemporaneous estimate

United States securities and exchange commission logo
February 1, 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.
Amendment No. 1 to Registration Statement on Form F-1
Filed February 1, 2021
File No. 333-252210
Dear Mr. Luo:
            We have reviewed your amended registration statement and have the following
comment.  In our comment, 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 comment applies 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 this comment, we may have additional comments.
Amendment No. 1 to Registration Statement on Form F-1 filed February 1, 2021
17. Subsequent Events, page F-39
1.For the November 9, 2020 option modifications, please remove the disclosure stating the
modification is exempt under ASU 2017-09, as modifications to vesting terms do not
qualify for exemption from modification of awards accounting under ASC 718.  Please
disclose the amount of compensation expense to be recognized during the fourth quarter
of fiscal year 2020 from waiving the remaining vesting schedule and conditions (i.e., the
amount of unrecognized compensation expense remaining to be recognized since the date
of grant) for the 2,375,000 options.

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 February 1, 2021 Page 2
 FirstName LastName
Peter (Peizhi) Luo
Adagene Inc.
February 1, 2021
Page 2
            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
questions.
Sincerely,
Division of Corporation Finance
Office of Life Sciences
cc:       Li He, Esq.

CORRESP
1
filename1.htm

New York
   Northern California
   Washington DC
   São Paulo
   London

Paris
   Madrid
   Hong Kong
   Beijing
   Tokyo

Resident   Hong Kong Partners

Davis   Polk & Wardwell
 Hong Kong Solicitors
   The Hong Kong Club Building
   3A Chater Road
   Hong Kong

852 2533 3300 tel

Karen Chan †
   Yang Chu †
   James C. Lin*
   Gerhard Radtke*

Martin Rogers †
   Patrick S. Sinclair*
   Miranda So*
   James Wadham†

Hong   Kong Solicitors
    * Also Admitted in New York
    † Also Admitted in England and Wales

February 1, 2021

Re:

Adagene Inc.
   Registration Statement on Form F-1
   Filed January 19, 2021
   File No. 333-252210

Confidential

Mr. Jason Drory

Ms. Celeste Murphy

Ms. Tracey Houser

Mr. Terence O’Brien

Office of Life Sciences

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Dear Mr. Jason Drory, Ms. Celeste Murphy, Ms. Tracey Houser and Mr. Terence O’Brien:

On behalf of Adagene Inc. (the “Company”), a company incorporated under the laws of the Cayman Islands, we submit to the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) this letter setting forth the Company’s responses to the comments contained in the Staff’s letter dated January 28, 2021 on the Company’s registration statement on Form F-1 filed on January 19, 2021 (the “Registration Statement”). Concurrently with the submission of this letter, the Company is filing Amendment No. 1 to its registration statement on Form F-1 (the “Amended Registration Statement”) and certain exhibits via EDGAR to the Commission.

To facilitate your review, we have separately delivered to you today four courtesy copies of the Amended Registration Statement, marked to show changes to the Registration Statement, and two copies of the submitted exhibits.

The Company has responded to all of the Staff’s comments by revising the Registration Statement to address the comments, by providing an explanation if the Company has not so revised the Registration Statement, or by providing supplemental information as requested. The Staff’s comments are repeated below in bold, followed by the Company’s response to the comments as well as a summary of the responsive actions taken. We have included page numbers to refer to the location in the Amended Registration Statement where the language addressing a particular comment appears.

Davis Polk includes Davis Polk & Wardwell LLP and its associated entities.

Subject to the market conditions and the Staff’s comments, the Company requests that the Staff declare the effectiveness of the Registration Statement on February 8, 2021. A registration statement on Form F-6 relating to the ADSs has been filed with the Commission on January 29, 2021.  The Company would greatly appreciate the Staff’s continued assistance and support in meeting the timetable.

*              *              *              *

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.

In response to the Staff’s comment, the Company has revised the disclosure on page 1 of the Amended Registration Statement.

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 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.

In response to the Staff’s comment, the Company has submitted the requested information via EDGAR to the Commission.

The Company respectfully submits to the Staff that among the 6,807,492 ordinary shares representing 6,807,492 share options granted in 2020 and January 2021, a total of 3,392,470 share options representing 3,392,470 ordinary shares granted in 2020 have been exercised and a total of 161,000 share options representing 161,000 ordinary shares granted in 2020 have been cancelled or forfeited. Therefore, a total of 3,254,022 share options to purchase a total of 3,254,022 ordinary shares that were granted in 2020 and January 2021 were outstanding as of the date of the Amended Registration Statement.

2

As disclosed on pages 56, 107, 227 and 248 of the Amended Registration Statement and the Company’s response letter previously submitted, as of the date of the Amended Registration Statement, the aggregate number of ordinary shares underlying the outstanding share options is 3,601,522, which includes both (i) the 3,254,022 share options that were granted in 2020 and January 2021 and (ii) the number of share options that were granted prior to 2020.

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.

In response to the Staff’s comment, the Company has revised the disclosure by removing such graphics from the Amended Registration Statement.

The Company has also revised the disclosure on page 152 of the Amended Registration Statement to define the technical terms.

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.

In response to the Staff’s comment, the Company has revised the disclosure by removing such chart from the Amended Registration Statement.

3

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.

In response to the Staff’s comment, the Company has revised the disclosure on page 176 of the Amended Registration Statement.

Compensation of Directors and Executive Officers, page 226

6.              Please update your executive compensation disclosure to include your recently completed fiscal year. Please refer to Item 6.B of Form 20-F.

In response to the Staff’s comment, the Company has revised the disclosure on page 227 of the Amended Registration Statement.

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.

In response to the Staff’s comment above regarding the format of presentation of administrative expenses and research and development expenses, the Company has revised its format of presentation on page F-4, F-43 and F-46 of the Amended Registration Statement.

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.

In response to the Staff’s comment above regarding the disclosure of the October 2020 and the January 2021 share option grants and the November 2020 share options modification, the Company respectfully submits that it has revised the disclosure on page F-40, F-41, F-71 and F-72 of the Amended Registration Statement.

4

In addition, the Company has revised the subsequent events to further disclose the exercise prices, the fair value of the share options granted in October 2020 and January 2021 and also the period over which the compensation expense will be recognized.

For the November 2020 share options modification, the Company respectfully submits that there is no additional compensation expense recognized. The Company has revised the subsequent events to further disclose the exercise price at which the share options were exercised 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.

In response to the Staff’s comment above regarding the cash transactions with related parties on the parent only statements of cash flows, the Company has revised disclosure of the parent only statements of cash flows on page F-44 of the Amended Registration Statement.

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.

In response to the Staff’s comment, the Company has revised the disclosure on pages 6, 139, 147, 155, 156, 157 and 181 of the Amended Registration Statement.

*              *              *              *

If you have any questions regarding this submission, please contact Li He at +852 2533-3306 (li.he@davispolk.com) or Steve Wang at +852 2533-1092 (xuelin.wang@davispolk.com) or Raymond Tam, the Company’s CFO, at +852 9873-6186 (raymond_tam@adagene.com), or Alex Zhuang of PricewaterhouseCoopers Zhong Tian LLP at +86 21-2323 3701 (alex.zhuang@cn.pwc.com).

Thanks for your time and attention.

5

Yours sincerely,

/s/ Li He

cc:

Mr.  Peter (Peizhi) Luo, Chief Executive Officer and Chairman
   Mr.  Raymond Tam, Chief Financial Officer
    Adagene Inc.

Benjamin Su, Esq., Partner
   Michael E. Sullivan, Esq., Partner
   Daying Zhang, Esq., Partner
   Latham & Watkins LLP

Alex Zhuang, Engagement Leader
   PricewaterhouseCoopers Zhong Tian LLP

6

CORRESP
1
filename1.htm

New York
   Northern California
   Washington DC
   São Paulo
   London

Paris
   Madrid
   Hong Kong
   Beijing
   Tokyo

Resident   Hong Kong Partners

Davis   Polk & Wardwell
 Hong Kong Solicitors

The Hong Kong Club   Building
   3A Chater Road
   Hong Kong

852 2533 3300 tel

Karen Chan †
   Yang Chu †
   James C. Lin*
   Gerhard Radtke*

Martin Rogers †
   Patrick S. Sinclair*
   Miranda So*
   James Wadham†

Hong   Kong Solicitors
    * Also Admitted in New York
    † Also Admitted in England and Wales

CERTAIN PORTIONS OF THIS LETTER HAVE BEEN OMITTED FROM THE VERSION FILED VIA EDGAR. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. INFORMATION THAT WAS OMITTED IN THE EDGAR VERSION HAS BEEN NOTED IN THIS LETTER WITH A PLACEHOLDER IDENTIFIED BY THE MARK “[***]”.

FOIA CONFIDENTIAL TREATMENT REQUESTED

The entity requesting confidential treatment is

Adagene Inc.

4F, Building C14, No. 218,

Xinghu Street, Suzhou Industrial Park

Suzhou, Jiangsu Province, 25125

People’s Republic of China

+86-512-8777-3632

Rule 83 Confidential Treatment Request

January 25, 2021

BY Secured Electronic Transmission and EDGAR

Office of Life Sciences

Division of Corporation Finance
 U.S. Securities and Exchange Commission
 100 F Street, N.E.
 Washington, D.C. 20549-7561
 Attention:        Mr. Jason Drory

Ms. Dorrie Yale

Ms. Tracey Houser

Mr. Terence O’Brien

Re:                             Adagene Inc. (CIK No. 0001818838)

Registration Statement on Form F-1 Filed January 19, 2021

(Registration Statement No. 333-252210)

Ladies and Gentlemen:

We are submitting this letter on behalf of Adagene Inc. (the “Company”) in connection with the review by the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) of the Company’s Registration Statement on Form F-1 (File No. 333-252210) initially filed January 19, 2021 (the “Registration Statement”).

Because of the commercially sensitive nature of the information contained herein, the Company respectfully requests that the specified information contained in this letter be treated as confidential information and that the Commission provide timely notice to Mr. Raymond Tam, Chief Financial Officer of the Company, before it permits any disclosure of the bracketed information in this letter.

The Company respectfully advises the Staff that, based on discussions with the Company’s board of directors and preliminary input provided by the underwriters for this offering, the Company anticipates that the price range for this offering will be [***] per ordinary share (the “Estimated IPO Price Range”). The indicative Estimated IPO Price Range assumes the implied valuation range of the Company’s market capitalization prior to the Company’s initial public offering at [***] million and [***] million (the “Estimated Pre-Money IPO Market Cap Range”). The indicative Estimated IPO Price Range represents an estimate of the fair value of the unrestricted, freely tradable shares that would be sold in the public market without liquidity and marketability discounts. The Company will include the actual price range in an amendment to the Registration Statement shortly before the commencement of the Company’s management roadshow. That price range will be subject to then-current market conditions, continuing discussions with the underwriters and certain other factors affecting the Company or this offering.

Summary of recent equity awards and issuance of Series C-3 convertible preferred shares

The Company has determined fair value per ordinary share of the share options of its Second Amended and Restated Share Incentive Plan (the “Share Options”) granted on August 15, 2020 and August 27, 2020 (each, a “Valuation Date”), respectively, to be [***]. The valuation of the Company’s ordinary shares was based on the valuation performed by an independent valuation firm (the “Independent Valuation Firm”) using market approach valuation by making reference to (a) the Company’s latest equity financing transaction of Series C-3 convertible preferred shares closed on December 19, 2019 and (b) discount for lack of marketability (“DLOM”). DLOM reflects the fact that the Company’s shares were privately-held shares. DLOM was quantified by Finnerty option pricing model. Under this method, the cost of the put option, which could be used to hedge the price change before the privately held shares can be sold, was considered as a basis to determine the DLOM. This option pricing method is one of the methods commonly used in estimating DLOM. The key assumptions of such model includes estimated dividend yields, timing of a liquidity event, and estimated volatility of our shares. The further the valuation date is from an expected liquidity event, the higher the put option value and thus the higher the implied DLOM. The lower DLOM is used for the valuation, the higher is the determined fair value of the ordinary shares.

The valuation of the Company’s Share Options on each Valuation Date was determined based on the valuation performed by the Independent Valuation Firm using Hull-White ESO Binomial tree model by making reference to, among various factors, fair value of the Company’s ordinary shares on each Valuation Date, the expected volatility based on stock price performances of 12 comparable publicly listed companies in the same industry, the exercise multiples and the risk-free rate. Both market approach valuation and binominal tree model are commonly used valuation methods introduced in the AICPA Audit and Accounting and Valuation Guide, “Valuation of Privately-Held-Company Equity Securities Issued as Compensation” (the “Guide”).

A detailed description of the valuation method used for the assessment of the fair value of the share options of the Company is set forth on pages 131 and 132 of the Registration Statement.

In October 2020, the Company granted certain number of Share Options to newly joined executive officer and members of mid-level management (the “October Grant”). Given the fact that the date of the October Grant was subsequent to the balance sheet date of the Company’s latest unaudited financial statements included in the Registration Statement, the Company did not engage the Independent Valuation Firm to perform a fair value assessment as of the date of the October Grant.

On January 16, 2021, the Company granted certain number of Share Options to its founder team (the “January Grant”). The exercise price of the Company’s Share Options granted on January 16, 2021 was determined to be US$13.85, which was estimated after considering, among other things, the Company’s financial and operating performance, and current economic conditions as well as then implied valuation of the Company’s market capitalization, which is close to the Estimated Pre-Money IPO Market Cap Range. Because the grant date of such Share Options was subsequent to the balance sheet date of the Company’s latest unaudited financial statements included in the Registration Statement, the Company did not engage the Independent Valuation Firm to perform a fair value assessment as of a more recent date since the latest Valuation Date.

Difference between recent valuations leading up to the offering and estimated offering price

According to the Company’s Independent Valuation Firm’s valuation model, assuming (i) a 60% likelihood of the Company’s initial public offering and (ii) no preferred rights associated with the ordinary shares converted from the Series C-3 convertible preferred shares, such as liquidation preference, the fair value of ordinary shares as of each Valuation Date was derived to be [***] per share, representing an approximately [***] discount to the issue price of Series C-3 convertible preferred shares. The difference between the mid-point of Estimated IPO Price Range and the fair value of the ordinary shares under the valuation model is approximately [***] per share, representing a [***] increase from the fair value of ordinary shares as of each Valuation Date. Furthermore, the difference between the fair value per ordinary share as of each Valuation Date and the high end of the Estimated IPO Price Range is approximately [***] or approximately [***].

Among the factors that were considered in setting the Estimated IPO Price Range were the following: (a) the Company’s stage of development, (b) progress of Company’s research and development efforts, (c) the impact of significant corporate events or milestones, (d) the general conditions of the securities market and the recent market prices of, and the demand for, publicly traded common stock of comparable companies; (e) the Company’s financial condition and prospects; (f) estimates of business potential and earnings prospects for the Company and the industry in which it operates; and (g) recent performance of initial public offerings of companies in the sector.

In particular, since Valuation Date, the Company has achieved several milestones:

·                  ADG106 — Since the latest Valuation Date, the Company has achieved significant progress in the clinical development of one of its lead product candidates, ADG106, including:

·                  As of the November 30, 2020, the Data Cut-off Date, the Company has completed the Phase Ia dose escalation in each of its Phase I studies of ADG106 in both the United States and China as a monotherapy in patients with advanced or metastatic solid tumors and/or NHL. ADG106 was dose escalated up to 10 mg/kg and is well tolerated at dose expansion at 3 mg/kg, 5 mg/kg and at 300mg and 400 mg flat doses. A total number of 92 patients have been dosed. Both clinical trials, namely ADG106-1001 and ADG106-1002, have limited treatment emergent adverse events, or TEAEs, liver toxicity or hematologic abnormalities. One patient with a solid tumor who previously failed chemotherapies, radiotherapy, and an anti-PD-L1 antibody treatment showed a partial response to ADG106 treatment with a 40% tumor size reduction after two treatment cycles. In addition, two NHL patients showed more than a 30% tumor size reduction after one and two ADG106 treatment cycles, respectively. Furthermore, biomarker studies showed target engagement with specific pharmacodynamics biomarkers indicative of immune system activation, and clinical response correlated with changes in CD137 target engagement. These data are encouraging given that the enrolled population was not preselected and was heavily pretreated.

·                  The Company also identified a potential predictive biomarker which correlates with patient response to ADG106 treatment from a retrospective analysis of the ongoing Phase I clinical trial. Based on this finding, the Company is in the process of preparing an additional Phase II trial which the Company expects to initiate in 2021 and for which the Company intends to stratify and preselect patients using this predictive biomarker to potentially enhance clinical response of patients to ADG106 treatment. The Company also plans to pursue potential registrational trials evaluating ADG106 in biomarker enriched patient populations.

·                  The Company has received the National Medical Product Administration, or the NMPA, approval for the ADG106-1008 study in China, which is a Phase Ib/II combination trial of ADG106 with anti-PD-1 in advanced solid tumors and hematological malignancies. The Company is also in the preparation for a submission of a Clinical Trial Notification, or CTN, for its ADG106-1003 clinical trial in Australia, which will combine ADG106 with anti-PD-1, and other therapies in advanced solid tumors and hematological malignancies.

·                  ADG126

·                  The Company obtained authorization from the Australian Therapeutic Goods Administration, or the ATGA, under a CTN for ADG126-1001 for a Phase I trial in Australia. The first site of ADG126-1001 has been approved by the Australian authorities, investigational products have been released, and the site is ready to start patient screening. In addition, three potential patients have been identified for enrollment in the ADG126-1001 trial and the Company expects to commence patient enrollment by February.

·                  U.S. Food and Drug Administration, or the FDA, authorized the Company to proceed with its ADG126-1001 Phase I trial in the United States in 2021.

·                  ADG116

·                  Subsequent to the CTN authorization obtained from the ATGA in July 2020, the Company has successfully completed dose escalation at the first three doses in our ADG116-1003 clinical trial in Australia, including a dose level at 0.03mg/kg, which was the dose level used for the first patient in the ADG116 Phase I trial in the United States. As of January 15, 2021, no dose limiting toxicity or treatment related serious adverse events have been observed in any of the patients treated. There was no treatment induced liver toxicity and all three patients treated at 0.03mg/kg showed normal liver enzyme level post ADG116 treatment.

·                  Collaboration with Sanjin

·                  With the collaboration effort from the Company’s partner, Sanjin, ADG104 has progressed to Phase Ib and Phase II trials concurrently in China. In addition, Sanjin and its affiliates have recently filed an IND application for the second monoclonal antibody that the Company is collaborating with Sanjin, which has been accepted by the NMPA.

·                  Expansion of Leadership to support strategic growth

·                  The Company expanded its leadership team with the appointment of multiple executive officers and independent director nominees.  Dr. Gong’s contributions to securing regulatory approval for seven precision oncology drugs, Dr. Xu’s extensive oncology drug discovery and translational medicine experience and Dr. Zhao’s expertise in manufacturing will support the Company’s continued efforts on the discovery and design of novel antibodies and advancement of its immunotherapy clinical programs. Mr. Andy Cheung’s contributions as an independent director nominee and an audit committee chairman as well as Dr. Min Li’s expertise and industry insights will further support the Company’s improvement of its corporate governance and compliance with heightened standards as a publicly listed company.

·                  Establishing a center of excellence for precision medicine in San Diego, United States

·                  The Company recently secured laboratory and office space in San Diego to building out its team in San Diego with a focus on precision medicine and translational studies to support the acceleration of its Dynamic Precision Library platform for its partners and pipeline.

·                  Increased probability of an IPO and substantially enhanced liquidity and marketability of the Company’s ordinary shares

·                  The Estimated IPO Price Range represents a future price for ordinary shares that, if issued in the IPO, assumes a 100% probability of the consummation of the IPO and that, if issued in the IPO, the shares will be immediately freely tradable in a public market, whereas the estimated fair value of the ordinary shares as of the latest Valuation Date represents a contemporaneous estimate of the fair value of shares that were then illiquid and might never become liquid. This illiquidity accounts for a substantial difference between the estimated fair values of the ordinary shares through the date hereof and the Estimated IPO Price Range. At the time of the latest Valuation Date, the Company had not yet confidentially submitted its draft registration statement to the Commission.

Accordingly, the Company considers that the difference between the fair value of ordinary share per share in August 2020 and the Estimated IPO Price Range is not unreasonable.

*          *          *          *

If you have any questions regarding thi

CORRESP
1
filename1.htm

New York

Paris

Northern California

Madrid

Washington DC

Hong Kong

São Paulo

Beijing

London

Tokyo

Resident Hong Kong   Partners

Davis Polk & Wardwell

852 2533 3300 tel

Karen Chan †

Martin Rogers †

Hong Kong Solicitors

Yang Chu †

Patrick S. Sinclair*

The Hong Kong Club Building

James C. Lin*

Miranda So*

3A Chater Road

Gerhard Radtke*

James Wadham†

Hong Kong

Hong Kong Solicitors

* Also Admitted in New   York

† Also Admitted in England and   Wales

CERTAIN PORTIONS OF THIS LETTER HAVE BEEN OMITTED FROM THE VERSION FILED VIA EDGAR. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. INFORMATION THAT WAS OMITTED IN THE EDGAR VERSION HAS BEEN NOTED IN THIS LETTER WITH A PLACEHOLDER IDENTIFIED BY THE MARK “[***]”.

FOIA CONFIDENTIAL TREATMENT REQUESTED

The entity requesting confidential treatment is

Adagene Inc.

4F, Building C14, No. 218,

Xinghu Street, Suzhou Industrial Park

Suzhou, Jiangsu Province, 215123

People’s Republic of China

+86-512-8777-3632

Rule 83 Confidential Treatment Request

January 29, 2021

BY Secured Electronic Transmission and EDGAR

Office of Life Sciences

Division of Corporation Finance
 U.S. Securities and Exchange Commission
 100 F Street, N.E.

Washington, D.C. 20549-7561

Attention:

Mr. Jason   Drory

Ms. Celeste Murphy

Ms. Tracey   Houser

Mr. Terence   O’Brien

Re:                             Adagene Inc. (CIK No. 0001818838)

Registration Statement on Form F-1 Filed January 19, 2021

(Registration Statement No. 333-252210)

Ladies and Gentlemen:

We are submitting this letter on behalf of Adagene Inc. (the “Company”) in connection with the review by the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) of the Company’s Registration Statement on Form F-1 (File No. 333-252210) initially filed January 19, 2021 (the “Registration Statement”).

Because of the commercially sensitive nature of the information contained herein, the Company respectfully requests that the specified information contained in this letter be treated as confidential information and that the Commission provide timely notice to Mr. Raymond Tam, Chief Financial Officer of the Company, before it permits any disclosure of the bracketed information in this letter.

The Company respectfully advises the Staff that, based on discussions with the Company’s board of directors and preliminary input provided by the underwriters for this offering, the Company anticipates that the price range for this offering will be [***] and [***] per ordinary share (the “Estimated IPO Price Range”). The indicative Estimated IPO Price Range assumes the implied valuation range of the Company’s market capitalization prior to the Company’s initial public offering at [***] million and [***] million (the “Estimated Pre-Money IPO Market Cap Range”). The indicative Estimated IPO Price Range represents an estimate of the fair value of the unrestricted, freely tradable shares that would be sold in the public market without liquidity and marketability discounts. The Company will include the actual price range in an amendment to the Registration Statement shortly before the commencement of the Company’s management roadshow. That price range will be subject to then-current market conditions, continuing discussions with the underwriters and certain other factors affecting the Company or this offering.

Summary of recent equity awards and issuance of Series C-3 convertible preferred shares

As of the date of the Registration Statement, awards to purchase a total of 3,601,522 ordinary shares have been granted and outstanding, excluding awards that were forfeited or cancelled after the relevant grant dates. The following information is in relation to the options granted in 2020 and 2021:

Grant Date (each, a
   “Valuation Date”)

Number of
   Ordinary Shares
   Underlying the
   Share Options

Per Share Exercise
   Price of Options

Estimated Fair
   Value per
   Ordinary Share

DLOM
   (as defined below)

2020.03.26

459,692

US$

1.48

[***]

[***]

%

2020.03.26

1,487,873

US$

1.83

[***]

[***]

%

2020.08.15

763,8081

US$

1.83

[***]

[***]

%

2020.08.15

2,740,000

US$

2.26

[***]

[***]

%

2020.08.27

525,000

US$

2.26

[***]

[***]

%

2020.10.26

340,000

US$

2.26

[***]

[***]

%

2021.01.16

491,119

US$

13.85

[***]

[***]

%

1  Among which, 103,000 ordinary shares underlying the share options have been cancelled or forfeited.

The valuation of the Company’s ordinary shares underlying the awards granted on March 26, 2020, August 15, 2020 and August 27, 2020 (such grant on August 27, 2020, the “August Grant”) was based on the valuation performed by an independent valuation firm (the “Independent Valuation Firm”) using market approach valuation by making reference to (a) the Company’s latest equity financing transaction of Series C-3 convertible preferred shares closed on December 19, 2019 and (b) discount for lack of marketability (“DLOM”). DLOM reflects the fact that the Company’s shares were privately-held shares. DLOM was quantified by Finnerty option pricing model. Under this method, the cost of the put option, which could be used to hedge the price change before the privately held shares can be sold, was considered as a basis to determine the DLOM. This option pricing method is one of the methods commonly used in estimating DLOM. The key assumptions of such model includes estimated dividend yields, timing of a liquidity event, and estimated volatility of our shares. The further the valuation date is from an expected liquidity event, the higher the put option value and thus the higher the implied DLOM. The lower DLOM is used for the valuation, the higher is the determined fair value of the ordinary shares.

According to the Company’s Independent Valuation Firm’s valuation model, assuming (i) a 60% likelihood of the Company’s initial public offering and (ii) no preferred rights associated with the ordinary shares converted from the Series C-3 convertible preferred shares, such as liquidation preference, the fair value of ordinary shares underlying the August Grant was derived to be [***] per share (the “Estimated August Grant Ordinary Share Fair Value”), representing an approximately [***]% discount to the issue price of Series C-3 convertible preferred shares.

On October 26, 2020, the Company granted certain number of share options to newly joined executive officer and members of mid-level management (the “October Grant”). The fair value of ordinary shares underlying the October Grant was determined to be [***], using the interpolation method with reference to the Estimated August Grant Ordinary Share Fair Value and the Estimated January Grant Ordinary Share Fair Value (as defined below).

On January 16, 2021, the Company granted certain number of share options to its founder team (the “January Grant”). The estimated fair value per ordinary share underlying the January Grant was determined to be [***] (the “Estimated January Grant Ordinary Share Fair Value”), which was estimated after considering then implied valuation of the Company’s market capitalization, which is close to the Estimated Pre-Money IPO Market Cap Range, and DLOM.

The valuation of the Company’s share options on each Valuation Date was determined based on the valuation performed by the Independent Valuation Firm using Hull-White ESO Binomial tree model by making reference to, among various factors, fair value of the Company’s ordinary shares on each Valuation Date, the expected volatility based on stock price performances of 12 comparable publicly listed companies in the same industry, the exercise multiples and the risk-free rate. Both market approach valuation and binominal tree model are commonly used valuation methods introduced in the AICPA Audit and Accounting and Valuation Guide, “Valuation of Privately-Held-Company Equity Securities Issued as Compensation” (the “Guide”).

A detailed description of the valuation method used for the assessment of the fair value of the share options of the Company is set forth on pages 131 and 132 of the Registration Statement.

Difference between recent valuations leading up to the offering and estimated offering price

The difference between the mid-point of Estimated IPO Price Range ([***]) and the Estimated August Grant Ordinary Share Fair Value ([***]) under the valuation model is approximately [***] per share, representing a [***]% increase from the Estimated August Grant Ordinary Share Fair Value. Furthermore, the difference between the Estimated August Grant Ordinary Share Fair Value and the high end of the Estimated IPO Price Range ([***]) is approximately [***] or approximately [***]%.

In addition, according to the Company’s Independent Valuation Firm’s valuation model, the difference between the mid-point of Estimated IPO Price Range ([***]) and the Estimated January Grant Ordinary Share Fair Value ([***]) is approximately [***], representing a [***]% increase from the Estimated January Grant Ordinary Share Fair Value. Furthermore, the difference between the Estimated January Grant Ordinary Share Fair Value and the high end of the Estimated IPO Price Range ([***]) is approximately [***] or approximately [***]%.

Among the factors that were considered in setting the Estimated IPO Price Range were the following: (a) the Company’s stage of development, (b) progress of Company’s research and development efforts, (c) the impact of significant corporate events or milestones, (d) the general conditions of the securities market and the recent market prices of, and the demand for, publicly traded common stock of comparable companies; (e) the Company’s financial condition and prospects; (f) estimates of business potential and earnings prospects for the Company and the industry in which it operates; and (g) recent performance of initial public offerings of companies in the sector.

In particular, since the date of the August Grant, the Company has achieved several milestones:

·                  ADG106 — Since the date of the August Grant, the Company has achieved significant progress in the clinical development of one of its lead product candidates, ADG106, including:

·                  As of the November 30, 2020, the Data Cut-off Date, the Company has completed the Phase Ia dose escalation in each of its Phase I studies of ADG106 in both the United States and China as a monotherapy in patients with advanced or metastatic solid tumors and/or NHL. ADG106 was dose escalated up to 10 mg/kg and is well tolerated at dose expansion at 3 mg/kg, 5 mg/kg and at 300mg and 400 mg flat doses. A total number of 92 patients have been dosed. Both clinical trials, namely ADG106-1001 and ADG106-1002, have limited treatment emergent adverse events, or TEAEs, liver toxicity or hematologic abnormalities. One patient with a solid tumor who previously failed chemotherapies, radiotherapy, and an anti-PD-L1 antibody treatment showed a partial response to ADG106 treatment with a 40% tumor size reduction after two treatment cycles. In addition, two NHL patients showed more than a 30% tumor size reduction after one and two ADG106 treatment cycles, respectively. Furthermore, biomarker studies showed target engagement with specific pharmacodynamics biomarkers indicative of immune system activation, and clinical response correlated with changes in CD137 target engagement. These data are encouraging given that the enrolled population was not preselected and was heavily pretreated.

·                  The Company also identified a potential predictive biomarker which correlates with patient response to ADG106 treatment from a retrospective analysis of the ongoing Phase I clinical trial. Based on this finding, the Company is in the process of preparing an additional Phase II trial which the Company expects to initiate in 2021 and for which the Company intends to stratify and preselect patients using this predictive biomarker to potentially enhance clinical response of patients to ADG106 treatment. The Company also plans to pursue potential registrational trials evaluating ADG106 in biomarker enriched patient populations.

·                  The Company has received the National Medical Product Administration, or the NMPA, approval for the ADG106-1008 study in China, which is a Phase Ib/II combination trial of ADG106 with anti-PD-1 in advanced solid tumors and hematological malignancies. The Company is also in the preparation for a submission of a Clinical Trial Notification, or CTN, for its ADG106-1003 clinical trial in Australia, which will combine ADG106 with anti-PD-1, and other therapies in advanced solid tumors and hematological malignancies.

·                  ADG126

·                  The Company obtained authorization from the Australian Therapeutic Goods Administration, or the ATGA, under a CTN for ADG126-1001 for a Phase I trial in Australia. The first site of ADG126-1001 has been approved by the Australian authorities, investigational products have been released, and the site is ready to start patient screening. In addition, three potential patients have been identified for enrollment in the ADG126-1001 trial and the Company expects to commence patient enrollment by February.

·                  U.S. Food and Drug Administration, or the FDA, authorized the Company to proceed with its ADG126-1001 Phase I trial in the United States in 2021.

·                  ADG116

·                  Subsequent to the CTN authorization obtained from the ATGA in July 2020, the Company has successfully completed dose escalation at the first three doses in our ADG116-1003 clinical trial in Australia, including a dose level at 0.03mg/kg, which was the dose level used for the first patient in the ADG116 Phase I trial in the United States. As of January 15, 2021, no dose limiting toxicity or treatment related serious adverse events have been observed in any of the patients treated. There was no treatment induced liver toxicity and all three patients treated at 0.03mg/kg showed normal liver enzyme level post ADG116 treatment.

·                  Collaboration with Sanjin

·                  With the collaboration effort from the Company’s partner, Sanjin, ADG104 has progressed to Phase Ib and Phase II trials concurrently in China. In addition, Sanjin and its affiliates have recently filed an IND application for the second monoclonal antibody that the Company is collaborating with Sanjin, which has been accepted by the NMPA.

·                  Expansion of Leadership to support strategic growth

·                  The Company expanded its leadership team with the appointment of multiple executive officers and independent director nominees.  Dr. Gong’s contributions to securing regulatory approval for seven precision oncology drugs, Dr. Xu’s extensive oncology drug discovery and translational medicine experience and Dr. Zhao’s expertise in manufacturing will support the Company’s continued efforts on the discovery and design of novel antibodies and advancement of its immunotherapy clinical programs. Mr. Andy Cheung’s contributions as an independent director nominee and an audit committee chairman as well as Dr. Min Li’s expertise and industry insights will further support the Company’s improvement of its corporate governance and compliance with heightened standards as a publicly listed company.

·                  Establishing a center of excellence for precision medicine in San Diego, United States

·                  The Company recently secured laboratory and office space in San Diego to building out its team in San Diego with a focus on precision medicine and translational studies to support the acceleration of its Dynamic Precision Library platform for its partners and pipeline.

·                  Increased probability of an IPO and substantially enhanced liquidity and marketability of the Company’s ordinary shares

·

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.

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 January 28, 2021 Page 2
 FirstName LastNamePeter (Peizhi) Luo
Adagene Inc.
January 28, 2021
Page 2

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

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 January 28, 2021 Page 3
 FirstName LastNamePeter (Peizhi) Luo
Adagene Inc.
January 28, 2021
Page 3
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

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 January 28, 2021 Page 4
 FirstName LastName
Peter (Peizhi) Luo
Adagene Inc.
January 28, 2021
Page 4
questions.
Sincerely,
Division of Corporation Finance
Office of Life Sciences
cc:       Li He, Esq.

CORRESP
1
filename1.htm

New York

Northern California

Washington DC

São Paulo

London

Paris

Madrid

Hong Kong

Beijing

Tokyo

Resident   Hong Kong Partners

Davis Polk &   Wardwell
 Hong Kong Solicitors

The Hong Kong Club   Building
   3A Chater Road
   Hong Kong

852 2533 3300 tel

Karen Chan †

Yang Chu †

James C. Lin*

Gerhard Radtke*

Martin Rogers †

Patrick S.   Sinclair*

Miranda So*

James Wadham†

Hong   Kong Solicitors

* Also Admitted in New   York
    † Also Admitted in England and Wales

January 19, 2021

Re:                             Adagene Inc.
 Amendment No. 2 to Draft Registration Statement on Form F-1
 Submitted November 24, 2020
 CIK No.: 0001818838

Confidential

Mr. Jason Drory

Ms. Dorrie Yale

Ms. Tracey Houser

Mr. Terence O’Brien

Office of Life Sciences

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Dear Mr. Jason Drory, Ms. Dorrie Yale, Ms. Tracey Houser and Mr. Terence O’Brien:

On behalf of Adagene Inc. (the “Company”), a company incorporated under the laws of the Cayman Islands, we submit to the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) this letter setting forth the Company’s responses to the comments contained in the Staff’s letter dated December 9, 2020 on the Company’s revised draft registration statement on Form F-1 confidentially submitted on November 24, 2020 (the “Revised Draft Registration Statement”). Concurrently with the submission of this letter, the Company is filling its registration statement on Form F-1 (the “Registration Statement”) and certain exhibits via EDGAR to the Commission. The Company is, concurrently with the Registration Statement, filing the draft registration statement on Form F-1 initially confidentially submitted on September 22, 2020 and all amendments thereto that were previously submitted for the non-public review of the Staff, and plans to file a preliminary prospectus containing the estimated offering size and a price range on February 3, 2021, subject to market conditions and the review of the Staff. The Company confirms that its securities have not been previously sold pursuant to an effective registration statement under the Securities Act of 1933, as amended.

Davis Polk includes Davis Polk & Wardwell LLP and its associated entities.

To facilitate your review, we have separately delivered to you today four courtesy copies of the Registration Statement, marked to show changes to the Revised Draft Registration Statement, and two copies of the submitted exhibits.

The Company has responded to all of the Staff’s comments by revising the Revised Draft Registration Statement to address the comments, by providing an explanation if the Company has not so revised the Revised Draft Registration Statement, or by providing supplemental information as requested. The Staff’s comments are repeated below in bold, followed by the Company’s response to the comments as well as a summary of the responsive actions taken. We have included page numbers to refer to the location in the Registration Statement where the language addressing a particular comment appears.

Subject to the market conditions and the Staff’s comments, the Company requests that the Staff declare the effectiveness of the Registration Statement on February 9, 2021. A registration statement on Form F-6 relating to the ADSs will be filed with the Commission in due course.  The Company would greatly appreciate the Staff’s continued assistance and support in meeting the timetable.

*            *            *            *

Draft Registration Statement on Form F-1 Submitted on November 24, 2020

Prospectus Summary

Overview

Our Pipeline, page 5

1.              We note your response to our prior comment 2 and your revised pipeline table that shows your trial 1001 for ADG126 has already commenced Phase Ia. However, your disclosures only indicate that you have received authorization to begin the trial from the Australian authorities, and from the FDA, subject to submission of a revised agreed-upon protocol, but not that the trial has commenced. Please reconcile your disclosures. In addition, please explain why it is appropriate to show Phase Ia and Phase Ib as two separate columns when your discussions for ADG126 and ADG116 only refer to “Phase I”. Please also explain why it is appropriate to retain the US 1001 trial for ADG116 in the pipeline table when you do not currently plan to enroll patients in this clinical trial.

In response to the Staff’s comment, the Company respectfully submitted to the Staff that the first site of ADG126-1001 has been approved by the Australian authorities, investigational products have been released, and the site is ready to start patient screening. In addition, three potential patients have been identified for enrollment in the ADG126-1001 trial and the Company expects to commence patient enrollment by February. The Company has revised the disclosure on page 166 of the Registration Statement to reflect the update.

In addition, the Company has revised the pipeline chart on pages 6 and 140 of the Registration Statement to combined Phase Ia and Phase Ib columns in response to the Staff’s comment.

2

With respect to ADG116-1001 US trial, the Company respectfully submits that although the Company currently is not enrolling patients in this clinical trial, ADG116-1001 nevertheless is an approved clinical trial by the FDA and the Company plans to initiate dose expansion phase in ADG116-1001 trial, pending results of ADG116-1003 trial.  As the Company has disclosed on pages 166 and 172 of the Registration Statement, as of January 15, 2021, the Company has successfully completed the three dose escalation at 0.003 mg/kg, 0.01mg/kg and 0.03mg/kg. 0.03mg/kg was the dose that the Company had initiated a Phase I trial of ADG116 in the United States, and no treatment related adverse events have been observed in the three patients treated at 0.03 mg/kg in Australia. Therefore, the Company expects to resume ADG116-1001 trial in the United States pending on ADG116-1003 trial. The Company has revised the pipeline chart on pages 6 and 140 of the Registration Statement to clarify the Company’s anticipated milestones accordingly.

ADG126: Novel anti-CTLA-4 SAFEbody candidate, page 7

2.              We note your use of the phrase “potency” to describe certain preclinical observations. For example only, we note your revised disclosures here and elsewhere in your prospectus where you state that “ADG126 in addition to its potency for Treg depletion in TME suggests its potential for tolerable and potent monotherapies” and that “preclinical results support the further clinical evaluation of ADG116 both as tolerable and potent monotherapies and combination therapies for a wide range of tumor types.” As ADG126 is only in the preclinical stage, and as safety and efficacy determinations are solely within the FDA’s authority and they continue to be evaluated throughout all phases of clinical trials, please remove these and any similar references. Where you deem appropriate, you may present objective data resulting from your trials without including your conclusions related to safety or efficacy.

In response to the Staff’s comment, the Company has revised the disclosure on pages 8, 9, 142, 168, 169 and 173 of the Registration Statement.

Notes to the Consolidated Financial Statements

18. Condensed Financial Information of the Parent Company, page F-40

3.              Please disclose the amount of the restricted net assets for each subsidiary in accordance with Article 4-08(e)(3)(ii) of Regulation S-X. To the extent that restricted net assets of your consolidated subsidiaries does not exceed 25 percent of consolidated net assets as of December 31, 2019 in accordance with Article 5-04(c) of Regulation S-X, please disclose the purpose of presenting the parent company financial information.

In response to the Staff’s comment above regarding the amount of the restricted net assets for each subsidiary, the Company respectfully submits that there is only one subsidiary incorporated in the PRC with the restricted net assets, and it has added related disclosure on page F-39.

3

In response to the Staff’s comment above regarding the purpose of presenting the parent company financial information, the Company respectfully advises the Staff that pursuant to Financial Reporting Manual 2810.4, since the Company has a consolidated shareholders’ deficit, its net asset base for purposes of calculating the proportionate share of restricted net assets of consolidated subsidiaries should be zero. Therefore, the restricted net assets of the Company’s consolidated subsidiaries exceed 25% of consolidated net assets of the Company, which triggers the requirement to provide parent company financial information (Note 18).

4.              Please disclose the related party transactions recognized in your statements of comprehensive loss and statements of cash flows in accordance with Article 4-08(k)(i) of Regulation S-K. In addition, disclose any intercompany profits or losses resulting from transactions with related parties and the effects of those transactions in accordance with Article 4-08(k)(ii) of Regulation S-X. As part of your response, tell us what services you provided and who the related party is for the revenue recognized for fiscal year 2019.

In response to the Staff’s comment above regarding the related party transactions recognized in the statements of comprehensive loss, the Company respectfully submits that it has revised its disclosure on pages F-4 and F-46. Moreover, the movements of amount due to/from related parties were in the statements of cash flows on F-6 and F-48.

In response to the Staff’s comment above regarding intercompany profits or losses resulting from transactions with related parties and the effects of those transactions, the Company respectfully submits that it has added related disclosure on page F-44.

In response to the Staff’s comment above regarding what services the Company provided and who the related party is for the revenue recognized for fiscal year 2019, the Company respectfully advises the Staff that the related party is Adagene Incorporated. In fiscal year 2019, Signal Pharmaceuticals LLC, a subsidiary of Celgene Corporation, made a purchase order to Adagene Incorporated for delivery of certain sequences. Because the intellectual properties relating to such sequences were held by the Company, the Company charged an R&D expenditure of US$288,982 to Adagene Incorporated, which forms part of the Company’s revenue in fiscal year 2019.

*            *            *            *

4

If you have any questions regarding this submission, please contact Li He at +852 2533-3306 (li.he@davispolk.com) or Steve Wang at +852 2533-1092 (xuelin.wang@davispolk.com) or Raymond Tam, the Company’s CFO, at +852 9873-6186 (raymond_tam@adagene.com), or Alex Zhuang of PricewaterhouseCoopers Zhong Tian LLP at +86 21-2323 3701 (alex.zhuang@cn.pwc.com).

Thanks for your time and attention.

Yours sincerely,

/s/ Li He

cc:                                Mr.  Peter (Peizhi) Luo, Chief Executive Officer and Chairman
 Mr.  Raymond Tam, Chief Financial Officer
 Adagene Inc.

Benjamin Su, Esq., Partner

Michael E. Sullivan, Esq., Partner

Daying Zhang, Esq., Partner

Latham & Watkins LLP

Alex Zhuang, Engagement Letter

PricewaterhouseCoopers Zhong Tian LLP

5

United States securities and exchange commission logo
December 9, 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. 2 to Draft Registration Statement on Form F-1
Submitted November 24, 2020
CIK No.: 0001818838
Dear Mr. Luo:
            We have reviewed your amended draft 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 providing the requested information and either submitting
an amended draft registration statement or publicly filing your registration 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 the information you provide in response to these comments and your
amended draft registration statement or filed registration statement, we may have additional
comments.  Unless we note otherwise, our references to prior comments are to comments in our
November 10, 2020 letter.
Draft Registration Statement on Form F-1 Submitted on November 24, 2020
Prospectus Summary
Overview
Our Pipeline, page 5
1.We note your response to our prior comment 2 and your revised pipeline table that
shows your trial 1001 for ADG126 has already commenced Phase Ia. However, your
disclosures only indicate that you have received authorization to begin the trial from the
Australian authorities, and from the FDA, subject to submission of a revised agreed-upon

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 December 9, 2020 Page 2
 FirstName LastNamePeter (Peizhi) Luo
Adagene Inc.
December 9, 2020
Page 2
protocol, but not that the trial has commenced. Please reconcile your disclosures. In
addition, please explain why it is appropriate to show Phase Ia and Phase Ib as two
separate columns when your discussions for ADG126 and ADG116 only refer to "Phase
I". Please also explain why it is appropriate to retain the US 1001 trial for ADG116 in the
pipeline table when you do not currently plan to enroll patients in this clinical trial.
ADG126: Novel anti-CTLA-4 SAFEbody candidate, page 7
2.We note your use of the phrase "potency" to describe certain preclinical observations. For
example only, we note your revised disclosures here and elsewhere in your prospectus
where you state that "ADG126 in addition to its potency for Treg depletion in TME
suggests its potential for tolerable and potent monotherapies" and that "preclinical results
support the further clinical evaluation of ADG116 both as tolerable and potent
monotherapies and combination therapies for a wide range of tumor types." As ADG126
is only in the preclinical stage, and as safety and efficacy determinations are solely within
the FDA's authority and they continue to be evaluated throughout all phases of clinical
trials, please remove these and any similar references. Where you deem appropriate, you
may present objective data resulting from your trials without including your conclusions
related to safety or efficacy.
Notes to the Consolidated Financial Statements
18. Condensed Financial Information of the Parent Company, page F-40
3.Please disclose the amount of the restricted net assets for each subsidiary in accordance
with Article 4-08(e)(3)(ii) of Regulation S-X.  To the extent that restricted net assets of
your consolidated subsidiaries does not exceed 25 percent of consolidated net assets as of
December 31, 2019 in accordance with Article 5-04(c) of Regulation S-X, please disclose
the purpose of presenting the parent company financial information.
4.Please disclose the related party transactions recognized in your statements of
comprehensive loss and statements of cash flows in accordance with Article 4-08(k)(i) of
Regulation S-K.  In addition, disclose any intercompany profits or losses resulting from
transactions with related parties and the effects of those transactions in accordance with
Article 4-08(k)(ii) of Regulation S-X.  As part of your response, tell us what services you
provided and who the related party is for the revenue recognized for fiscal year 2019.

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 December 9, 2020 Page 3
 FirstName LastName
Peter (Peizhi) Luo
Adagene Inc.
December 9, 2020
Page 3
            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,
Division of Corporation Finance
Office of Life Sciences
cc:       Li He, Esq.

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

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 November 10, 2020 Page 2
 FirstName LastNamePeter (Peizhi) Luo
Adagene Inc.
November 10, 2020
Page 2
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

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 November 10, 2020 Page 3
 FirstName LastName
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,
Division of Corporation Finance
Office of Life Sciences
cc:       Li He, Esq.

United States securities and exchange commission logo
October 19, 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.
Draft Registration Statement on Form F-1
Submitted September 22, 2020
CIK No.: 0001818838
Dear Mr. Luo:
            We have reviewed your draft 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 providing the requested information and either submitting
an amended draft registration statement or publicly filing your registration 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 the information you provide in response to these comments and your
amended draft registration statement or filed registration statement, we may have additional
comments.
Draft Registration Statement on Form F-1 Submitted on September 22, 2020
Prospectus Summary
Overview, page 1
1.Please substantially revise your narrative disclosures to more clearly explain in plain
English your NEObody, SAFEbody, and POWERbody technologies, and how they are
inter-connected and utilized for the building of your product pipeline. Also expand your
explanations of the figures at the top of pages 2 and 3 (and in your Business sections),
including with respect to the images in each of the three circles in the figure on page 3.

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 October 19, 2020 Page 2
 FirstName LastNamePeter (Peizhi) Luo
Adagene Inc.
October 19, 2020
Page 2
2.We refer to your statements on pages 4 and 6 and in your Business section comparing the
safety of ADG126 with ipilimumab based on a separate study.  As this comparison is not
based on head-to-head studies, please delete these discussions, or advise.
3.Revise to limit your Summary discussion of your ongoing trials to serious adverse events,
trial endpoints, and to the extent applicable, whether they were met. In the Business
section discussion of preliminary efficacy assessments, clarify, if true, that the trials did
not have efficacy endpoints.
Our Pipeline, page 4
4.With respect to your product candidates other than ADG106 and ADG104, revise your
column headings to show "Phase II" as a separate column or otherwise advise. With
respect to ADG106, please explain why the table does not show separate Phase I and
Phase II columns when your narrative disclosure appears to refer to separate phases. In
addition, based on your narrative disclosure regarding your status of development for
ADG106, please shorten the arrows in your pipeline table to more precisely indicate the
development status of such product candidate, or advise, and shorten your arrow for
ADG116 to the end of the IND enabling column as it does not appear you have
commenced your Phase 1 Australia trial yet based on your narrative disclosures, and it
does not appear you are intending to rely on the paused U.S. trial.
5.Please revise your pipeline table to show the target indications of each included product
candidate. In addition, please explain why it is appropriate for your pipeline table to
include a row generally for "Preclinical Assets." Based on your discussion in the Business
section, these assets appear to be in an early stage of development, and it does not appear
that you have identified any specific preclinical candidates to pursue.
ADG106: Novel agonistic anti-CD137 NEObody candidate, page 5
6.We note your disclosure on page 5 and elsewhere in your prospectus that in preclinical
and clinical trials, your product candidate has shown "robust anti-tumor activity," "was
observed to balance between safety and efficacy of CD137 agonism," demonstrated
"favorable safety results," "potent antitumor efficacy" and "preliminary clinical efficacy,"
and you also refer to "effective doses." Similar statements appear elsewhere in your
prospectus, such as your statement on page 42 referring to the "significant safety
margin" of ADG126, and your statement on page 151 that ADG126 "was observed to
effectively inhibit tumor growth." Please revise your disclosures to remove all such
statements suggesting that your product candidate is safe or effective, insofar as
determinations as to safety and efficacy are within the sole authority of the FDA or
comparable foreign regulatory authorities.
ADG116: Novel anti-CTLA-4 NEObody candidate, page 7
7.We note your disclosure that you have a Phase I clinical trial open in the United States for
ADG116 as a monotherapy in patients with advanced/metastatic solid tumors, but that you

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 October 19, 2020 Page 3
 FirstName LastNamePeter (Peizhi) Luo
Adagene Inc.
October 19, 2020
Page 3
are not enrolling patients in the trial. Revise to disclose in your Summary that your Phase I
trial was placed on clinical hold by the FDA following a death of a patient, as you explain
on page 31, and that you intend to conduct your trial in Australia at higher starting doses
than is currently permitted in the U.S.
Our Global Partnership and Collaborations, page 7
8.We note your statement that your recent partnerships are "validations of [y]our DPL
platform and technologies as well as their potential broad application to a wide range of
antibody modalities.” Given the early stage of development of your product candidates
derived from the platform and your partnerships and collaborations, such statements imply
an expectation of regulatory approval and are inappropriate given the length of time and
uncertainty with respect to securing such approval. Please delete such statements here and
in the Business section.  In addition, please qualify the fourth bullet on page 8 to state that
you may not be able to enter into additional collaboration agreements beyond the ones
with ADC Therapeutics and Guilin Sanjin.
Risk Factors, page 8
9.Please add a bullet to highlight that you may be classified as a PFIC for the current taxable
year and the resulting consequence to investors.
Implications of Being an Emerging Growth Company, page 10
10.Please supplementally provide us with copies of all written communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to do so on your behalf,
present to potential investors in reliance on Section 5(d) of the Securities Act, whether or
not they retain copies of the communications.
Risks Factors, page 18
11.We note your disclosure on page 224 that certain shareholders will possess board
representation rights following the offering. Please add a risk factor discussing
the board representation rights in sufficient detail so that investors can clearly understand
the corporate governance, control of the company, and resulting conflicts of interest that
may arise. For example, include in your revised disclosure that your CEO has such rights,
and if true, that your sole supplier is also a significant shareholder with these rights. In
addition, please also add appropriate disclosure in the summary risk factors disclosing that
certain shareholders will have board representation rights.
Use of Proceeds, page 96
12.Please expand your bullet points to disclose the estimated proceeds to be allocated to each
of your target indications and product candidates and clarify the stage of development you
expect to be able to complete for each indication using the estimated proceeds. In
addition, please add disclosure to the extent you will need additional funds to further

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 October 19, 2020 Page 4
 FirstName LastNamePeter (Peizhi) Luo
Adagene Inc.
October 19, 2020
Page 4
develop your material product candidates.
Capitalization, page 98
13.Please revise long-term borrowings to include the current portion of long-term
borrowings.
Results of Operations, page 111
14.For research and development expenses, please separately present the costs incurred for
preclinical testing from costs incurred for clinical trials.  Please disclose the amount of
costs incurred by program for each period presented.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Share-based Compensation, page 123
15.Once you have an estimated offering price or range, please explain to us how you
determined the fair value of the common stock underlying your equity issuances and the
reasons for any differences between the recent valuations of your common stock leading
up to the IPO and the estimated offering price. This information will help facilitate our
review of your accounting for equity issuances. Please discuss with the staff how to
submit your response.
Our Pipeline
ADG106: Novel Agonistic Anti-CD137 NEObody Candidate
Mechanism of Action, page 136
16.Please include additional descriptive labels for the figures at the top of page 137.
Specifically, please clearly label ADG106 in addition to the other objects depicted or
otherwise revise the graphic to clarify this illustration.
Clinical Development Plan, page 147
17.We note your disclosure that you are conducting a Phase Ib cohort expansion for
ADG106. In conjunction with your disclosure on page 139, revise to clarify the material
details on the expansion trial, including the number of expected participants, trial design,
endpoints and any protocols.
ADG116: Novel Anti-CTLA-4 NEObody Candidate, page 152
18.Expand your disclosure regarding your trials with ADG116 to describe the Phase I trial
that occurred in the U.S. prior to its clinical hold. Please also revise to provide details for
your planned Phase I trial in Australia, including the number of patients, dosage, duration,
and endpoints.

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 October 19, 2020 Page 5
 FirstName LastNamePeter (Peizhi) Luo
Adagene Inc.
October 19, 2020
Page 5
Our Platform, page 161
19.Please revise to more clearly explain to investors the technology underlying your DPL
platform, including by clarifying the "proven applications commonly used in the industry"
and whether or not you have licenses to use these applications. In addition, please describe
the underlying technology unique to your POWERbody technology so that investors can
better understand this specific technology.
ADC Therapeutics Agreements, page 164
20.Please revise your disclosure regarding the ADC Therapeutics Agreements to disclose the
aggregate payments received to date.
Sanjin Collaboration/ Out-Licensing Agreements, page 165
21.Please revise your disclosures regarding the Sanjin Greater China Agreement and Dragon
Boat ROW Agreement to disclose the aggregate payments received to date. Also revise to
specify the period Sanjin is required to pay the percentage of net sales.
Intellectual Property, page 167
22.Please expand the discussion of your intellectual property portfolio on page 167 to specify
(i) the material patents and patent applications you have for each of your specific product
candidates, and (ii) the type of patent protection granted or requested (composition of
matter, use or process) for each patent or pending application. In addition, please revise
your disclosure to specify the jurisdictions in Europe in which you have pending
applications
Competition, page 169
23.We note that you cross-reference to "Market Opportunity and Competition" sections
elsewhere in the prospectus where you disclose two advanced CD137 agonist antibodies
in development and ipilimumab as competition to ADG106 and
ADG126, respectively. Please revise your disclosure to enhance your description of the
competitive business conditions you face in respect to your material product candidates,
including disclosing the names of your main competitors, the stages of development for
your competitors' candidates and if applicable competition from existing approved
products.
Regulation, page 172
24.Please add a discussion regarding applicable regulation in Australia as you disclose that
you intend to conduct clinical trials in Australia.
Related Party Transactions, page 212
25.Revise to clarify whether the transactions with WuXi Biologics included providing you

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 October 19, 2020 Page 6
 FirstName LastNamePeter (Peizhi) Luo
Adagene Inc.
October 19, 2020
Page 6
with manufacturing and quality control testing, as you state on page 169 that you rely on
WuXi for your supply needs.
Notes to the Consolidated Financial Statements
10. Collaboration Arrangements, page F-29
26.Please expand your disclosures for the Dragon Boat Greater China Agreement to include
the nature of the milestones along with the US dollar amount for the upfront fee and the
total potential milestone payments.  Refer to ASC 606-10-32.
27.For the ADCT Collaboration and License Agreements to address the following:
•Clarify that the agreements are being combined for revenue recognition purposes, if
appropriate, per ASC 606-10-25-9.
•Clarify if you are required to perform research and development services in addition
to providing a license along with whether the research and development services for
the masked antibodies generated under the collaboration portion of the agreement is a
separate performance obligation.  Refer to ASC 606-10-25-14 through 25-22.  Please
also tell us how this impacts revenues recognition, if at all, in accordance with ASC
606-10-25-23 through 25-37.
•Disclose the US dollar amount for each category of milestones that are to be met to
receive payments.
18. Condensed Financial Information of the Parent Company, page F-40
28.We note that Adagene Inc., the parent company, is an offshore holding company.  As
such, please tell us why the parent company recognized revenues, contract liabilities, and
research and development expenses.  Please also provide footnote disclosures for the
amounts due from related parties and amounts due to related parties.  Please confirm that
the changes in amounts due to related parties are reflected as cash financing transactions
and the amounts due from related parties are reflected as cash investing transactions.
Exhibits
29.We note your disclosure on page 171 of various lease agreements for properties located in
China and California. Please file your material lease agreements as exhibits to your
registration statement or please advise. Refer to Item 8 of Form F-1 and Item
601(b)(10)(ii)(D) of Regulation S-K.

 FirstName LastNamePeter (Peizhi) Luo
 Comapany NameAdagene Inc.
 October 19, 2020 Page 7
 FirstName LastName
Peter (Peizhi) Luo
Adagene Inc.
October 19, 2020
Page 7
            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,
Division of Corporation Finance
Office of Life Sciences
cc:       Li He, Esq.