By Beth Senko, CFA
NASDAQ:RGC
Founded in 2014, Hong Kong-based Regencell Bioscience (NASDAQ:RGC) is an early clinical stage bioscience company using a traditional Chinese medicine (TCM) approach to develop standardized TCM formulas to holistically treat different elements of autism spectrum disorder (ASD) and attention deficit hyperactivity disorder (ADHD) in adolescents, and infectious diseases affecting people’s immune system such as COVID.
Regencell Bioscience’s formulation for the treatment of ASD and ADHD disorders was developed by Mr. Sik-Kee Au, a TCM practitioner, who has used the formula in his practice for over 30 years to treat patients with ASD and ADHD. Currently, the Company is working towards standardization and commercialization of its formula.
The formula is based on the hypothesis (“Sik-Kee Au TCM Brain Theory”) that ASD and ADHD stem from inadequate blood flow and creation of neurotransmitters in the developing brain. As we discuss later, this hypothesis is complementary to the western medicine view that ASD and ADHD are present at birth and arise from developmental differences in brain function.
Regencell Bioscience’s first clinical trial was designed to establish benchmarks for treatment, dosing, adverse effects (AEs) and measuring patient response in a systematic and repeatable way. The study, conducted in 2018-2019, included seven adolescents, aged five to eleven, with professionally-diagnosed ASD or ADHD. After discontinuing any current therapies, subjects received a customized version of the TCM formula for up to three months. Patient response was measured through parental interviews and four validated assessment instruments including the Autism Treatment Evaluation Checklist (ATEC), Gilliam Autism Rating Scale (GARS) and the Vanderbilt ADHD Diagnostic Parent Rating Scale (VADRS). All seven patients showed a lessening of symptoms during the treatment period across all four scales.
The second clinical study will evaluate patient response to three standardized mixtures of the TCM formula (for mild, moderate and severe impairment). The study will enroll 100 patients, aged 6-12 years, with a professional diagnosis of ASD or ADHD. Subjects will be dosed twice daily for three to 12 months, meet with the practitioner weekly and assessed monthly using similar assessments as the first clinical study. The Company has begun enrollment this quarter and plans to have readouts in late 2022. The results will be used to file for proprietary Chinese medicine (pCm) registration in Hong Kong making the product available to for sale in other clinics as well as over the counter.
Complements not Competitors - Traditional Chinese Medicine and Western Medicine
Traditional Chinese medicine (TCM) has been practiced continuously over 3,000 years and during that time, knowledge and modalities have evolved as a result of treatment and observation. TCM includes a range of disciplines including: herbal medicine, acupuncture, bone setting, nutritional changes, body manipulation and exercise. Herbal medicine is the most common form of TCM practiced in Hong Kong (Lam 2001).
TCM is based on the concept of balance in Qi (or “chi”). Health arises from a balance in Qi, while disease and illness are the result of an imbalance. Although there are common underlying principles in TCM, treatment is personalized for each patient and individual practitioners may utilize different approaches to the same condition.
TCM classifies patterns/conditions according to Zheng or Syndrome differentiation. (Lu 2012). TCM pattern is not only the interpretation of the symptoms of a disease, but also how a patient is classified. So, under TCM, patients with the same condition may have different TCM patterns, and different diseases may be classified as having the same TCM pattern. This seeming duality reflects the holistic nature of TCM and how it often defies easy comparison to allopathic (western) medicine in terms both of patient classification and treatment classification.
In TCM, patients are classified based on visual presentation of external features, palpation, olfaction, pulse detection, and interview. TCM interventions are determined after the initial therapeutic principles and general rules are established. Based on these determinations, the practitioner will create personalized combinations of Chinese material medica (CMM) and other therapeutic measures. Interventions are designed to bring the patient’s Qi back into balance.
In allopathic medicine, patient symptoms are assessed through visual and physical examination. Disease is diagnosed based on pathological diagnosis of physical or chemical function. Interventions are targeted to alleviating specific conditions/symptoms usually with pharmaceutical and/or surgical intervention. Treatment doesn’t usually address other co-morbidities unless contraindicated. For example, in OM, treatment for depression wouldn’t consider the role of high blood pressure.
In Hong Kong, TCM and allopathic medicine are both embraced, and patients will use both concurrently. However, patients will initially choose either TCM or allopathic medicine based on their symptomology. For example, patients will often select TCM first for mild illness (like a cold), because TCM is considered better for “clearing” a disease from the body. Other times, TCM is used to mediate side effects of western medications, or when allopathic treatments fail to work.
TCM has its weaknesses from a patient standpoint. Preparing and boiling the herbs is a time-consuming process and the tea more often than not has a very unpleasant, bitter taste. TCM treatments take longer to show improvement and may require lifestyle changes (such as dietary changes) – both of which tend to reduce patient compliance.
In contrast, allopathic medicine is usually the first choice for complicated or “serious” illness. It is more convenient because medication doesn’t require special preparation, and it produces faster recovery or symptom alleviation. However, allopathic medicine comes with more unwanted side effects, and some patients believe that while allopathic medicine relieves symptoms, TCM is still the best way to remove the illness from the body after treatment.
Proprietary Chinese medication registration (pCm), the “approval” process for TCM falls under a different regulation process as compared to western treatments in Hong Kong, and Asia in general. When applying for registration of pCm in Hong Kong, applicants are required to provide sufficient documents to show safety, stability, quality and efficacy of the pCm formulae products to the Hong Kong Chinese Medicines Board. Efficacy documents include reference materials in which the claimed therapeutic functions are supported by research studies, interpretation and principle of formulating a prescription and a summary report on all the product efficacy documents.
ASD and ADHD - neurodevelopmental disorders with growing recognition
Autism Spectrum Disorder (ASD)
Autism spectrum disorder (ASD) refers to a group of complex development disorders, including autism, Asperger syndrome, pervasive developmental disorder not otherwise specified (PDD-NOS), and other related conditions. Patients with ASD usually exhibit problems in communication, impairments in social interaction, and repetitive and stereotyped behaviors and interests from a very early age; however, a differential diagnosis generally can’t be made before age two. Patients diagnosed with ASD may exhibit some symptoms, but not others, and at varying levels of severity. There is no consensus on the biological causes of ASD, nor are there clinical biomarkers. ASD risk factors include prenatal factors, neuroanatomical abnormalities, environmental and genetic factors.
ASD is an economic and emotional burden for families and society. People with ASD often require close supervision, specialized education and assistance in personal care. Some countries have a strong network of educational and other support services for people with ASD and their families. In other places, the burden of care falls entirely on family and community. Even with support, people with ASD are subject to co-existing disorders, social pressures (such as bullying) and other barriers to leading an independent life.
Prevalence of ASD has grown in recent decades, although improved recognition of symptoms is likely driving the increasing number of diagnoses. Reported prevalence is higher in developed countries and tends to increase with economic development. The World Health Organization (2014) estimates global prevalence of ASD at 6.2 cases per 1,000 in children and 7.2 cases per 1,000 in adults.
A 2020 meta-analysis (Qiu et al., 2020), reports pooled prevalence of ASD cases in Asia at 0.36%, considerably lower than global estimates; however, there is currently no ASD monitoring system in Asia. The study notes prevalence estimates vary widely depending on the source population and metrics used. In Hong Kong, the prevalence of ASD is estimated at 37 cases per 1,000 people in both children and adults.
Treatment for ASD consists of behavioral and occupational therapies. Medications are prescribed to managed myriad symptoms such as antidepressants for mood and antipsychotics for aggression. Medication efficacy varies from patient to patient, and comes with side effects such as sedation, elevated blood sugar, metabolic syndrome, weight gain, and anxiety to name a few. Unfortunately, there are no cures for ASD and treatment is lifelong.
Attention Deficit Hyperactivity Disorder (ADHD)
Once considered a “trash can” diagnosis for boys with learning and behavioral problems in elementary and middle school in the US, ADHD (the terms are largely interchangeable) is now globally recognized as a developmental disorder presenting in childhood and often continuing into adulthood. Like ASD, ADHD is a complex collection of symptoms and behaviors that fall under broad definitions of hyperactivity, impulsivity and inattention. People with ADHD have some or all of these symptoms with varying degrees of severity often resulting in poor performance at school or work, entrenched mood disorders, and relationship difficulties.
In 2007, Brazilian researchers estimated global prevalence of ADHD at 5.3%; however, there was wide variation in country-specific prevalence which researchers attributed to differences in measurement methodologies and cultural expectations (Polanczyk et al., 2007). A more recent meta-analysis estimated global prevalence of ADHD at 7.2% (Thomas et al., 2015). As with ASD, reported prevalence of ADHD tends to be higher in developed nations. However, unlike ASD some researchers have questioned the validity of estimates of double-digit prevalence in the US and other countries as being artificially-inflated by medical and business interests.
Regardless of the actual prevalence, ADHD remains a recognized developmental condition with few treatment options. Medications, primarily stimulants, are only effective and tolerated by 70% of patients, and many patients report varying efficacy from day to day. Over time, some patients acclimate to the medication and require higher dosages to achieve the desired effect. Stimulant medications come with well-documented side effects such as agitation, anxiety, weight-loss/appetite loss, thirst, palpitations and insomnia. Stimulants have the potential to be abused and some adolescents and young adults take stimulants without a diagnosis and prescription.
Non-stimulant medications work for certain patients but a portion of patients do not respond at all to medication and have to rely on behavioral interventions to manage their symptoms.
TCM and the treatment of developmental disorders
TCM principles for treating psychiatric disorders come from the Su Wen of the Huangdi Nei Jing (Fundamental Questions of the Yellow Emperor’s Inner Classic). In TCM, psychiatric disorders are described as energetic disharmonies involving the so-called Five Spirits: the Hun (the noncorporeal spirit), the Po (the corporeal spirit), the Zhi (the will), the Yi (the intellect) and the Shen (the mind and the connecting spirit.) Each of the spirits is associated with a particular organ. For example, Hun is associated with the liver and Shen with the heart. As with other conditions, TCM interventions for psychiatric and developmental disorders center on improving Qi and correcting imbalances.
TCM practitioners tend to view ASD and ADHD as different manifestations of similar imbalances. In TCM theories, ADHD is a condition affecting the mind, thought, and emotion. The main affected systems are the heart, liver, spleen, and kidney, and is caused by the imbalance of yin and yang and dysfunction of the Zang-fu (viscera) organs (Ni et al., 2014).
There are many herbal treatments prescribed by TCM practitioners for ADHD. Ni et al. (2014) counted 39 different formulations using 94 different ingredients (CMM) to treat ADHD in clinical studies included in its meta-analysis. Researchers note that despite a wide variation in TCM formulations to treat ADHD, there is consistent agreement in TCM principles and practices.
Under the Sik-Kee Au TCM Brain Theory, ASD and ADHD result from a blockage of blood flow/nutrients to certain parts of the brain. The therapeutic goal is to gain optimal performance from other organs (notably the heart and liver) so that the brain will get what it needs for better function.
Path to registration and commercialization of its ASD/ADHD treatment formula
Regencell Bioscience has a four-year timeframe to commercialize its standardized formulations and gain pCm registration in Hong Kong. The Company has a number of tasks ahead:
• Completing its second clinical trial and evaluating results.
• Conducting additional clinical trials to support its proprietary formulae in ASD/ADHD and other applications.
• Obtaining patents and other forms of IP protection in Hong Kong and other markets.
• Establishing manufacturing capability and supply chain that will meet registration requirements.
• Assembling and filing documentation for pCm approval.
• Building out its marketing and distribution strategy and infrastructure.
COVID Treatment Formula
In March 2020, Mr. Sik-Kee Au, Regencell’s strategic partner TCM practitioner, started to develop a TCM formula targeting COVID affected patients. So far, Regencell has treated 12 patients (suspected or confirmed COVID cases) and following the treatment, their health records showed improvements after an average treatment period of 5 days.
Following these promising results, in September 2021, Regencell’s wholly-owned subsidiary in Hong Kong, entered into a joint venture agreement with Honor Epic Enterprises Limited to offer COVID related treatments to patients in ASEAN countries, India, Japan, Australia and New Zealand.
Regencell will own 60% of the joint venture, the principal business of which will be the trading, manufacturing, marketing and distribution of TCM formulae products in these countries.
Conclusion
While there is still much work to do, in our view, Regencell Bioscience is taking a thoughtful, systematic approach to developing its therapies.
At its June 2021 IPO, Regencell Bioscience recently raised over $22 million, which the Company plan to use to fund its second research study related to ASD/ADHD treatment, the logistics of its joint venture with Honor Epic to provide COVID treatment to patients in ASEAN countries, product and intellectual property registrations, hiring of new talent to expand its team, in addition to working capital and other general corporate purposes.
We believe that an emphasis on conducting well-designed clinical trials that measure outcomes based on well-established assessment instruments, will provide Regencell Bioscience with a competitive advantage in terms of expertise and credibility in an industry that is moving towards higher standards for efficacy, safety and quality.
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