Regencell Bioscience(NASDAQ: RGC), a China-based drugmaker, has been on fire over the past 12 months, with its share price skyrocketing by more than 21,000% as of this writing (that’s not a typo). A closer look at the company, however, makes it hard to understand its performance over the past year and its valuation.
Regencell looks like a rather speculative bet, and investors should look elsewhere, for instance, toward a well-established drugmaker like Pfizer(NYSE: PFE). Here’s why this blue chip healthcare giant is a better bet.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
Regencell specializes in developing traditional Chinese medicine products, particularly in neuroscience and infectious diseases. The company’s targets include ADHD, autism, and COVID-19. Investors might expect that Regencell’s rise over the past year has been driven by solid clinical progress for its leading candidates. But that’s not the case. Regencell has had few clinical catalysts to speak of yet. Meanwhile, it remains a pre-commercial biotech that generates no revenue and is consistently unprofitable.
Yet, the stock’s market capitalization is about $12.8 billion as of this writing. It’s exceedingly rare for a clinical-stage biotech to have a market cap anywhere close to this, and when it happens, it’s usually because there is already ample clinical evidence (typically from phase 3 studies) for a promising candidate that could go on to generate well over $1 billion in sales.
That’s not what we see with Regencell. The company’s performance has been driven by market dynamics divorced from the business’s fundamentals (such as a short squeeze). In fact, the company itself has said there is “substantial doubt” about its ability to remain in business. Here’s the bottom line: Regencell Bioscience is an extraordinarily risky stock, even more so than the average clinical-stage biotech. It’s best to stay very far away from this company.
Now, Pfizer has encountered its own issues. The company’s revenue and earnings have been inconsistent over the past three years, as its pandemic franchise has not performed as well as it once did. Pfizer has earned approval for newer products, but they have not succeeded in restoring sales growth. And what’s more, Pfizer will encounter important patent cliffs over the next few years, including that of its anticoagulant Eliquis.
That said, Pfizer still looks like a stock worth buying. Here are four reasons why. First, Pfizer has a larger pipeline, including some candidates that look far more promising than its most recent approvals. The company’s portfolio includes a potential GLP-1 medicine called MET-097i. This investigational therapy passed phase 2 clinical trials with flying colors. Not only did it show strong efficacy, but it also appears to have the potential to cause fewer side effects than many competitors, while offering a friendlier, once-monthly dosing regimen.
Pfizer is moving forward with phase 3 studies for MET-097i. The company is doing the same with PF-4404, an investigational cancer therapy. Pfizer launched 11 pivotal studies in 2025 and plans to launch 20 more this year. If Pfizer can earn approval for these products, the company should be able to improve its financial results and bounce back. Second, Pfizer has succeeded in cutting costs and improving its bottom line, partly thanks to artificial intelligence (AI)-driven initiatives.
Third, the stock looks reasonably valued at current levels. Pfizer is trading at 8.7x forward earnings, compared to the average of 18.7 for the healthcare industry. Lastly, Pfizer is a solid dividend stock, with a juicy forward yield of 6.4%. It has increased its payouts by 51.3% over the past decade.
Pfizer hasn’t had an exciting past 12 months like Regencell Bioscience. Despite its issues, the healthcare giant has a robust pipeline that should help it turn things around and a dividend that can compound investors’ wealth if reinvested. Pfizer is a much better buy than Regencell.
Before you buy stock in Pfizer, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Pfizer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $519,015!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,086,211!*
Now, it’s worth noting Stock Advisor’s total average return is 941% — a market-crushing outperformance compared to 194% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer. The Motley Fool has a disclosure policy.
