RGC: Forging a New Approach to ADHD and ASD

By [Brad Sorensen, CFA](https://scr.zacks.com/analyst-bios/person-details/default.aspx?ItemId=c9477f93-8bd2-4293-9461-8d809f2a916c)

NASDAQ:RGC

Traditional “western” medicine has made amazing advances and is one of the great innovations in history, but, unfortunately, there are still many conditions afflicting people that western medicine hasn’t been able to treat with any great effectiveness. It’s in instances like these that it can be beneficial to look to a medical approach that’s been around for over 2,000 years—a practice known as Traditional Chinese Medicine (TCM). It’s this approach that Regencell (NASDAQ:RGC) is embracing to improve the lives of the millions dealing with Attention Deficit Hyperactive Disorder (ADHD) and Autism Spectrum Disease (ASD) and an approach that has shown some encouraging improvements that sufferers of these conditions and their families are likely to be interested in.

Regencell Bioscience (RGC) is an early-stage bioscience company that focuses on the research, development and commercialization of TCM for the treatment of neurocognitive disorders and degenerations, specifically ADHD and ASD. Before getting into the specific applications for ADHD and ASD, the TCM approach to addressing health issues may be somewhat unknown to those of us in the west and it would be helpful to understand the big picture before drilling down to the specifics. According to the National Institute of Health, TCM uses various psychological and/or physical approaches as well as herbal products to address health problems, examples of these approaches include:

• Tai Chi

• Acupuncture

• Herbal Products

Johns Hopkins Medicine notes that the basic concept behind TCM is that a vital life force, called Qi, surges through the body. Any imbalance to Qi can cause disease and illness. This imbalance is most commonly thought to be caused by an alteration in the opposite and complementary forces that make up the Qi. These are called yin and yang. Getting a little more specific in TCM, the functions of the brain are dispersed to five zang organs, and are maintained by comprehensive functional interactions among the five zang organs. Therefore, brain diseases such as ASD and ADHD are regarded as systematic diseases in TCM, and their treatments are aimed to normalize not only the activity of the organs, but also the balance of functional interaction.i

Regencell takes this theory behind TCM a little further and the company notes that their TCM formulas are derived from a TCM base formula plus an adjustable formula developed by Regencell’s strategic partner, TCM practitioner, Mr. Sik-Kee Au, based on his TCM brain theory. The TCM brain theory explains why a healthy brain is essential in restoring the body’s systems to normal. According to the TCM brain theory, the blockage of or reduced blood flow, and damage of the interconnecting central nervous system, endocrine system and blood circulatory system disrupt the production of hormones and transmission of neurotransmitters, such as melatonin, dopamine, and norepinephrine, leading to a defective encoding and decoding of functions, and resulting in deficient or abnormal social behaviors that are the hallmarks of ADHD and ASD.

Before we get into the recently released trial results, why is Regencell spending so much time and energy on addressing these two conditions? According to the Centers for Disease Control (CDC) approximately 1 in 44 children is diagnosed with being on the ASD spectrum and at the present time there is no available “cure.” Current autism treatments involve developmental, educational and behavioral approaches, which have varying degrees of improving the lives of those with ASD. With ADHD, again according to the CDC, there are over six million children aged 3-17 diagnosed with having the condition. In contrast to ASD, however, there are some treatments for ADHD in the form of medications such as:

• Dexedrine

• Zenzedi

• Adderall

• Focalin

• Ritalin

We aren’t here to disparage those medications as they have undoubtedly allowed some children with ADHD to better control their actions, but as with many medications there are some unfortunate side effects that can impact users of the above medicines including: loss of appetite, weight loss, sleep problems, crankiness and tics. While not all families dealing with these conditions would necessarily be interested in alternative treatments, there are millions that would look into a treatment option that offered improvement in the conditions, while causing no side effects to those undergoing the treatments. And the market for current methods of addressing these conditions is large and expected to grow over the coming years:

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And the market that Regencell is attempting to address is even larger as they are likely to enter the Chinese and Hong Kong markets as well. One interesting difference to pay attention to as Regencell moves forward is that a treatment such as this can enter the US market as a nutritional product and therefore requires no governmental approval, reducing the barriers to entry in the US. In China and Hong Kong, however, a Proprietary Chinese Medicine (PCM) designation is needed for the product to be sold, a situation the company is well versed in and will pursue as the treatment gets closer to being ready for commercialization.

The company just completed the second efficacy trial, which was designed to evaluate and assess the effectiveness of Regencell’s standardized TCM formula in reducing ADHD and ASD symptoms during the course of a 3-month treatment. The trial is a non-blinded efficacy trial and patients in the trial were between 6 and 12 at the time of the treatment and clinically diagnosed with ADHD and/or ASD. The program required all patients to stop their existing medications, attend weekly treatment sessions with their parents, and follow the TCM Practitioner’s dietary guidelines during the 3-month treatment. Regencell selected 7 children (6 males and 1 female) to participate in the trial. 3 of the patients were diagnosed with ADHD and 4 of them with ASD.

The first results from this trial were just released and showed encouraging improvements. When dealing with these conditions, the company used three different methods to measure improvement:

• SKATBT-A3—48-item questionnaire designed and developed by Regencell to evaluate the effectiveness of a treatment in improving ADHD and ASD patients’ symptoms. SKATBT-A3 assesses a patient’s overall physical and neurodevelopmental conditions. SKATBT-A3 includes elements that are conditions of patients usually observed during TCM treatments such as: (i) speech/language/communication; (ii) patients’ sociability; (iii) sensory/cognitive awareness; and (iv) physical health and behavior.

• VADRS—a tool commonly used to measure ADHD severity.

• ATEC—The ATEC was designed as a comparative subscale for ASD diagnosed individuals – that is to measure change in ASD individuals due to various interventions by difference between the initial (baseline) ATEC scores and later ATEC scores.

All patients orally consumed the standardized TCM formula twice daily for 3 months. Improvements in patients’ symptoms were assessed weekly during treatment review sessions with the TCM Practitioner and the children’s parents.

And here’s the exciting part, after three months, the SKATBT-A3 scores of all patients were lower, indicating fewer problems and improvements in symptoms. According to the company, there were noticeable improvements in the patients’ overall health, ADHD symptoms and ASD symptoms. Common improvements noted included better sleep quality, reduced temper, better bowel movement and healthier complexion. The most notable improvement was demonstrated by two patients who gained the ability to control their tongues naturally without the aid of their own hands after the 3-month treatment. According to company management, this development is noteworthy because limited tongue function affects verbal communications and language abilities.

Improvement was also seen in the measures not designed by Regencell, with the VADRS scores of five patients coming in lower, indicating fewer problems and improvements in symptoms, while one patient’s score remained the same and one patient’s score was higher. Percentage improvements of patients ranged between -21% and 62%, with a mean of 21%. Additionally, the ATEC scores of all patients were lower, indicating fewer problems and improvements in symptoms. Percentage improvement of all patients ranged between 4% and 52%, with a mean of 22%. The company provided some color on the ATEC results and noted that they saw the most significant drop in scores in the health/physical/behavior subscale. Constipation, sleeping problems, poor appetite, anxiety/fearfulness, and irritability are common issues among ADHD and ASD patients and according to Regencell most of the patients suffered from these symptoms before the treatment but these symptoms improved after the treatment.

Importantly, none of the patients experienced any adverse side effects after the 3-month treatment. Additionally, while no guarantees can be made, herbal TCM treatments have an accumulating effect, meaning that while the greatest gains may be seen during the initial months of treatment, progress can be expected to continue the longer treatment is maintained.

While these are trials and there are no conclusions yet, the results seen so far warrant attention and we recommend investors to continue to monitor Regencell’s updates and developments. We are excited for the potential impact and market opportunity of the treatment.
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