[Company & Issue] Nasdaq's Top Gainer of 2025 Faces Lawsuits Ahead

Stock price surged 16,000% in one year
No approved drugs or revenue... Lawsuit concerns grow

An advertisement billboard of RegenCell Biosciences Holdings (RGC) promoted in New York at the time of its Nasdaq listing in June 2021. RGC website

The stock with the highest price increase on the US Nasdaq market in 2025 was Hong Kong-based pharmaceutical company Regencell Bioscience Holdings (RGC), which soared by more than 16,000%. Although it recorded the highest annual growth rate, suspicions of stock price manipulation have grown as the company has not registered any new drugs or generated any revenue since its Nasdaq listing in 2021. US regulatory authorities have also launched an investigation. With large-scale lawsuits expected in the future, concerns are mounting that stock price volatility will intensify.

Stock price soared over 16,000% in 2025... Highest growth rate on Nasdaq

On December 31, the last trading day of 2025 on the US Nasdaq market, RGC's stock price closed at $21, up 16,053.85% from $0.13 at the beginning of the year.

RGC began attracting investor attention in May of last year as rumors spread that clinical trials for its attention deficit hyperactivity disorder (ADHD) treatment developed using Chinese herbal medicine had been successful. After announcing a 38-to-1 stock split on June 16 last year, a surge of investors caused the stock price to jump 283% in a single day. On June 17, it soared to an all-time high of $78, representing a year-to-date increase of 59,900%.

However, as there was no official announcement of clinical trial results, the stock price began to plummet again. Bloomberg News pointed out, "Only 30 million shares, or 6% of RGC's total 500 million shares outstanding, are in circulation," highlighting this as a key factor behind the stock's volatility. In reality, most of RGC's circulating shares are held by internal executives, with CEO Yat-Gai Au reportedly owning 86% of the company's total shares.

Claims to treat ADHD with herbal medicine... But no registered new drugs or revenue

Appearance of herbal medicine introduced as a therapeutic ingredient by Regencell Bioscience Holdings (RGC). RGC website

RGC is a biotech company founded in Hong Kong in 2014 with the aim of developing treatments for mental disorders such as ADHD and autism spectrum disorder (ASD) using traditional Chinese medicine (TCM). After its Nasdaq listing in the US in 2021, the company announced plans to conduct clinical trials for an ADHD treatment using Chinese herbal ingredients, drawing attention as one of the biotech-themed stocks.

However, since its Nasdaq listing, the company has not officially announced any registered new drugs. RGC has not applied for approval of any treatments in the US or other countries, nor does it have any pending patents. The company has no experience in drug distribution and has not reported any revenue. RGC disclosed that it recorded a net loss of $3.58 million (about 5.2 billion KRW) last year.

In February 2022, RGC announced that its herbal medicine-based ADHD drug showed symptom improvement in a first-stage human efficacy trial, but has not released any further updates on the development of this treatment. In its business report submitted to the US Securities and Exchange Commission (SEC) in October 2024, the company stated, "We have not generated any revenue from any TCM candidates and have not applied for regulatory approval," and "We have no distribution network or experience, and no registered or pending patents," which sparked controversy.

US Department of Justice launches financial investigation... Investor lawsuits expected

Pixabay

With RGC's stock price experiencing excessive volatility despite a lack of business results, US regulatory authorities have launched an investigation into suspected stock price manipulation. According to Fox News, the US Department of Justice began a broad investigation into RGC's stock trading, operations, finance, and accounting starting in October last year. If allegations of stock price manipulation are confirmed, the company is expected to face hefty fines and significant legal costs.

Law firms in the US are also recruiting RGC investors for potential lawsuits. Bronstein, Gewirtz & Grossman, a US law firm specializing in class action lawsuits, announced on its website on the 25th of last month that it is "investigating potential claims on behalf of purchasers of RGC stock" and requested the cooperation of investors who purchased RGC shares. Other law firms, such as Bragar Eagel & Squire, are also reportedly reviewing and preparing for possible lawsuits against RGC.

Simplii Wall Street, a securities analysis firm, pointed out, "Since the US Department of Justice has launched an investigation, concerns over legal risks could significantly reduce trading volume," adding, "Even though the stock price has already fallen significantly from its peak, there is still a very high risk of further decline."