The SEC and Finra declined to comment on whether they were monitoring Regencell’s moves.
Finra’s mission was to protect investors and safeguard market integrity, spokesperson Rita De Ramos said. “In line with that mission, Finra continues to monitor the market for unusual trading activity, as part of our normal course of action.”
Regencell didn’t respond to emails and phone calls for comment on its stock performance and its founder’s fortune.
The company says its traditional Chinese medicine formula contains only natural ingredients.Credit: Internet
Founded in 2014, Regencell has as its main line of business marketing and licensing traditional treatments for ADHD and autism spectrum disorder developed by the founder’s father, Sik-Kee Au. It has exclusive rights over his traditional medicinal formulas, trademarked under the name Brain Theory.
The firm posted net losses of $US4.4 million and $US6.1 million, respectively, for the fiscal years ended June 2024 and 2023, according to filings. Its chief medical officer position has been vacant since the last doctor to hold the job resigned in 2022.
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The younger Au attended the Haas School of Business at the University of California, Berkeley and worked at Deutsche Bank in the late 1990s. He suffered from learning disorders and speech problems, had poor grades and an uncontrollable temper, according to a video post on the company’s Instagram account. Regencell’s mission is to “improve and save lives using a natural and holistic TCM formula to treat ADHD and ASD”, according to the same video.
The company’s official Instagram account has more than half a million followers. BeOne Medicines, the largest healthcare firm listed in Hong Kong, has just over 2500. Regencell built out a following with the help of social media campaigns on the platform that offered free tickets for Taylor Swift concerts in the US and Asia.
The company’s second-largest shareholder is Digital Mobile Venture, a firm ultimately owned by Taiwan’s Samuel Chen and his wife Fiona Chang. Chen was an investor whose early investments in Zoom Video Communications made him a fortune when the company’s stock soared almost 1500 per cent during the pandemic.
Chen, Chang and their children own a 55 per cent stake in Taipei-based Polaris Group, a biotechnology company developing anti-cancer drugs. He’s also the biggest shareholder of Sonix Technology, a provider of integrated circuits listed in Taipei.
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Bloomberg News received no reply to emails sent to Polaris and Sonix seeking comments from Chen.
Monitoring for wild price swings used to be done manually but the SEC and Finra now have programs to automatically detect market anomalies, according to Erik Gordon, professor at the University of Michigan’s Ross School of Business. They can also compel companies to share if they know why their stock price soared or crashed or whether insiders had cashed in at the peak.
The absence of profit or revenue at Regencell isn’t an automatic red flag; plenty of early-stage pharmaceutical companies had similar finances, Gordon said.
On June 18, two men and a woman arrived at Regencell’s Hong Kong office seeking information about treatment for ADHD and dementia. They said they had read about the stock’s surge before arriving. The visitors were also turned away. An employee said its staff were not doctors, and directed them to the company’s website.
“Early stage pharma companies can jump from a dollar to four dollars in 90 seconds if there’s some news about one of their drugs under development doing well in a clinical trial,” Gordon said. In this case, “what’s interesting is there’s no news”.
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