Regencell Bioscience Holdings, an emerging bioscience company based in Hong Kong, has experienced a remarkable surge in trading activity despite its lack of revenue. The company is noted for its development of traditional Chinese herbal remedies aimed at treating childhood attention deficit hyperactivity disorder (ADHD) and autism.
On Monday, Regencell’s shares experienced a dramatic rise, more than tripling in price by the end of the trading day with an increase of over 280% following the execution of a 38-for-1 stock split that was announced on June 2.
For this year, the company’s performance has been astronomical, witnessing a staggering 46,000% increase. As of the market close, Regencell, which has been traded on Nasdaq under the symbol ‘RGC’ since 2021, boasted a market capitalization of $29.7 billion, as reported by S&P Capital IQ.
The majority of shares, approximately 86.24%, are under the control of CEO Yat-Gai Au, according to data from FactSet.
This latest phenomenon surrounding Regencell is part of a broader trend of speculative international stocks capturing attention during the summer trading months. A notable instance occurred in August 2022, when AMTD Digital, another Hong Kong company in the fintech space, saw its stock soar by 126%, momentarily eclipsing the market values of major corporations like Coca-Cola and Bank of America.
Regencell’s current market valuation now rivals that of Nasdaq-listed Lululemon and surpasses companies like Super Micro Computer and Fifth Third Bancorp.
Earlier this month, Regencell explained that the rationale behind the stock split was solely to “enhance liquidity in the market for the company’s ordinary shares and make the shares more accessible to investors.” Despite the significant movement in stock price, such splits typically do not alter the fundamental aspects of a company.
The rise in Regencell’s stock is occurring against a backdrop of growing interest in alternative medicine, particularly following the appointment of Robert F. Kennedy Jr. as the Secretary of the U.S. Department of Health and Human Services in February. Kennedy, known for his skepticism regarding vaccines, has since instituted changes that discourage standard immunizations in the U.S. by reconstituting the advisory panel for the Centers for Disease Control and Prevention on vaccinations.
Regencell’s stock has been known for its volatility, with significant price fluctuations occurring frequently. For instance, there was a notable 30% increase on March 21, which was followed by a sharp 30% decline the subsequent trading day.
Limited Knowledge on Treatments and Revenue
While the stock’s valuation has surged, there remains a considerable lack of information regarding the efficacy and commercialization potential of Regencell’s treatments for ADHD and Autism Spectrum Disorders.
The company focuses on proprietary Traditional Chinese Medicine (TCM) formulas developed in collaboration with TCM practitioner Sik-Kee Au, who has created a approach dubbed the “Sik-Kee Au TCM Brain Theory.” Notably, Au is also the father of CEO Yat-Gai Au, according to a company announcement made in 2022.
Regencell’s product line consists of three liquid-based TCM formula candidates designed to address mild, moderate, and severe conditions, utilizing only natural ingredients that include “detoxication herbs,” blood circulation herbs, and digestive herbs.
The company states on its website, “These TCM formulae form the basis of our TCM product candidates, which we intend to develop and commercialize for the treatment of ADHD and ASD.”
In its most recent annual report submitted in October, Regencell indicated that it had yet to generate any revenue and had not obtained regulatory approvals for its TCM formulas. The report noted that the company incurred total net losses amounting to $4.36 million and $6.06 million for the fiscal years ending in June 2024 and 2023, respectively.
According to the filing, “We have not generated revenue from any TCM formulae candidates or applied for any regulatory approvals, nor have distribution capabilities or experience or any granted patents or pending patent applications and may never be profitable.”
A request for comment from Regencell was not returned.
The company’s most recent patient case study, dated November 15, 2023, claimed that 28 patients received treatment over three months during a secondary efficacy trial, showing improvements in symptoms related to ADHD and ASD as outlined on the company’s website.
In a previous case from 2021, Regencell reported that it had treated a dozen patients suffering from confirmed or suspected Covid-19 cases with a modified version of its proprietary cold and flu TCM formula. The positive outcomes attributed to this treatment led Regencell to form a joint venture with Honor Epic Enterprises Limited in September 2021, focusing on conducting further tests and commercializing the Covid treatment within ASEAN countries.
Social Media Buzz Surrounds Stock
Regencell’s stock has seen limited engagement on social media platforms over recent years, with existing comments reflecting both enthusiasm and skepticism from retail traders.
A user on the Reddit forum “r/Shortsqueeze” noted on Monday that Regencell’s trading behavior resembled that of a meme coin, stating, “Bought a little to see what happens, and it dropped 50% right after lol.” Another user mentioned three months prior, “I scalp RGC every day for a bit of profit.” The stock’s price surged by an impressive 1,360% in May alone.
On LinkedIn, one investor remarked in May that they “can’t stop laughing” upon reading the company description, while another professional in the pharmaceutical sector labeled Regencell as the “stock to watch” after its notable rise in May absent of any formal news or catalysts. Comments have expressed concern about the company’s background, with one LinkedIn user calling it “China based, low volume and no official news, bizarro.”
On X, a user shared their sentiment on Monday, suggesting, “for #CompleteBullsh__CompanyOfTheYear I nominate Regencell.”
— Finance Newso’s Scott Schnipper contributed reporting.
