By Fineline Cube 
Adagene Inc. (NASDAQ: ADAG) and Third Arc Bio, Inc. announced today that they have signed a global licensing agreement under which Third Arc Bio will employ Adagene’s proprietary SAFEbody™ safety antibody technology to create masked CD3 T‑cell engagers (TCEs) directed at selected tumor‑associated antigens (TAAs).
Deal Terms
| Item | Details |
|---|---|
| Scope | Third Arc Bio receives worldwide rights to research, develop and commercialize two candidate masked CD3 TCEs. |
| Up‑front cash | USD 5 million payable to Adagene upon signing. |
| Potential milestones | Up to USD 840 million in research, development and commercial milestones. |
| Royalties | Adagene to earn a royalty on net sales of the licensed TCEs (percentage disclosed in the definitive agreement). |
| Territorial carve‑outs | Adagene retains a non‑exclusive option to develop and commercialize the two candidates in Greater China, Singapore and South Korea. |
| Technology | SAFEbody™ platform – a “mask‑and‑unmask” antibody architecture that shields CD3 binding until the molecule reaches the tumor micro‑environment, improving safety and therapeutic index. |
| Target indication | Early‑stage oncology programs focusing on solid‑tumor TAAs (specific antigens confidential). |
Strategic Rationale
- Accelerated pipeline for Third Arc Bio – The SAFEbody platform provides a proven safety switch, allowing Third Arc Bio to advance masked CD3 TCEs with reduced cytokine‑release‑syndrome risk.
- Revenue diversification for Adagene – The deal adds a high‑up‑front cash infusion and a sizable milestone upside, while preserving a foothold in the fast‑growing Asian markets.
- Market opportunity – The global T‑cell engager market is projected to exceed USD 12 billion by 2030; masked CD3 TCEs are positioned to capture a share of the solid‑tumor segment, which currently lags behind hematologic indications.
Financial Impact
- Adagene (Q3 2025): The $5 m cash payment will be recorded as up‑front licensing revenue in the quarter, boosting GAAP earnings.
- Third Arc Bio: No immediate cash outflow; the company will expense R&D costs related to the two candidates as incurred.
- Share‑price reaction: ADAG shares opened +4.1 %, reflecting investor optimism about the partnership’s upside and the cash infusion.
Forward‑Looking Statements
This brief contains forward‑looking statements regarding the licensing agreement, anticipated milestones, and market potential for the masked CD3 TCE programs. Actual results may differ due to clinical outcomes, regulatory approvals, competitive dynamics, and other risks described in Adagene’s and Third Arc Bio’s most recent SEC filings.-Fineline Info & Tech