Shares of This Tiny Herbal Medicine Company With No Profits Rallies 72,000%, Boosts CEO Wealth to $25 Billion

Regencell Bioscience Holding (NASDAQ:RGC) shares have rallied over 72,500% in the past year despite recording losses of £3.2 million ($4.4 million) in the fiscal year ended June 30, 2024. The Hong Kong-based traditional Chinese medicine company sells herbal medicine treatments for neurocognitive disorders, including Attention Deficit Hyperactivity Disorder (ADHD) and Autism Spectrum Disorder (ASD).

The unstoppable rally drove chief executive officer Yat-Gai Au's 86% stake in the company to a value of £1.9 billion ($25.6 billion), placing him on the list of the world's 100 richest.

The stock has rallied 59,900% year-to-date and rose 382.2% in the past five days after the company executed a 38-for-1 forward stock split. However, note that the company shares are thinly traded, which makes the stock price more susceptible to fluctuations.

Regencell is mostly self-funded by the CEO, and the company is still in the R&D phase, yet to record profits since going public in 2021. Furthermore, the company's chief medical officer resigned in 2022, and the position has remained vacant since then.

The company was founded in 2014 to market and license treatments developed by Yat-Gai Au's father, Sik-Kee Au, who had an electrical engineering background and also owned a security alarm business in California. However, in 2021, a practitioners' board in Hong Kong found the founder's father guilty of professional misconduct for overprescribing medicines.

Regencell has exclusive rights to medicinal formulas developed by Sik-Kee Au, trademarked as Brain Theory. These formulations mainly comprise liquid-based herbal compounds taken twice daily.

Regencell Bioscience CEO was diagnosed with ADHD as a child and struggled with dyslexia through schooling, but managed to attend the Haas School of Business at the University of California-Berkeley and secure a job at Deutsche Bank in the late '90s before founding the traditional medicine company.

The company is also backed by Samuel Chen, whose early investments in Zoom Video Communications made him a fortune when stock prices jumped nearly 1,500% during the Covid-19 pandemic. Chen had owned a stake in Regencell, which is worth over £1.4 billion ($2 billion) at present.

Elsewhere, the CEO's brother, Yat-Pang, runs a real estate company called Veritas Investments that manages nearly 250 properties on the US West Coast. He also holds an MBA from Harvard Business School.

Regencell CEO Yat-Gai Au has shelled out more than £8.9 million ($12 million) to buy the company's shares over the years. According to the company website, Regencell is Gai's passion project, and he will continue to invest his personal funds 'to defend what he believes in.'

'He has literally put his money where his mouth is' by investing in Regencell to showcase his personal belief and commitment, according to his biopage. Furthermore, Yat-Gai is devoted to funding charitable activities for seniors, students, and the financially underprivileged.

Regencell has also explored beyond neurological treatments to sign a licensing agreement for the distribution of traditional Chinese medicine treatments for Covid-19 in Asia.

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