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    Regencell Bioscience (RGC): DOJ Probe Triggers Selloff, Raising Questions Over Its Lofty Valuation

    Simply Wall St·12/21/2025 15:12:56
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    The U.S. Department of Justice has opened an investigation into Regencell Bioscience Holdings (RGC), requesting documents on its financial and operational practices. The stock sold off sharply as investors weighed the risk of legal costs and potential penalties.

    See our latest analysis for Regencell Bioscience Holdings.

    Even after the DOJ probe wiped out a chunk of recent gains, Regencell’s momentum remains extreme, with a year to date share price return above 15,000 percent and a three year total shareholder return above 2,400 percent, signaling highly speculative sentiment that can turn quickly.

    If this kind of volatility has your attention, it could be worth scanning other pharma names too, especially pharma stocks with solid dividends for more income focused ideas.

    With no revenue, ongoing losses and a DOJ probe hanging over it, Regencell’s parabolic run looks hard to square with fundamentals. Is this a rare mispriced gem, or a case of markets already baking in blue sky growth?

    Price to Book Ratio of 2015.5x, Is it justified?

    Based on Regencell’s latest close at $19.81, its valuation looks stretched when viewed through the lens of its sky high price to book ratio relative to peers.

    The price to book ratio compares the market value of a company to its net assets. This is a common yardstick for asset light, early stage pharma and biotech businesses that may not yet generate earnings or revenue.

    For Regencell, a price to book multiple above 2,000 suggests investors are paying far more for each dollar of net assets than is typical in the sector. This implies the market is placing a substantial premium on future potential rather than current fundamentals.

    This stands in sharp contrast to both the broader US Pharmaceuticals industry, where the average price to book ratio sits at 2.4 times, and to close peers, which average 30.6 times. This underscores how extreme Regencell’s current valuation is by comparison.

    See what the numbers say about this price — find out in our valuation breakdown.

    Result: Price to Book of 2015.5x (OVERVALUED)

    However, the DOJ investigation and Regencell’s lack of revenue and persistent losses could quickly unravel the optimism reflected in its soaring share price.

    Find out about the key risks to this Regencell Bioscience Holdings narrative.

    Build Your Own Regencell Bioscience Holdings Narrative

    If you would rather dig into the numbers yourself and come to your own conclusions, you can build a custom view in under three minutes, Do it your way.

    A great starting point for your Regencell Bioscience Holdings research is our analysis highlighting 3 important warning signs that could impact your investment decision.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.