NeuroScientific (ASX:NSB) hits 80% Crohn’s response and pulls forward Australian approval

A second Phase 2 now runs in parallel, putting commercial revenue on a shorter clock

NeuroScientific Biopharmaceuticals (ASX:NSB) has wrapped up its Special Access Program for fistulising Crohn’s disease and shares rose over 50%. The results must have been spectacular, right? They were: four of five patients hitting a clinical response – that is an 80% response rate in one of the most treatment-resistant conditions in gut medicine, and it builds on the 75% number the company flagged earlier this year when only four patients had been dosed.

The fifth patient still responded, just below the 50% threshold required for a formal clinical response. No serious adverse events were recorded. Every patient saw improvement on the three standard scoring systems used in Crohn’s research, and every patient had at least one seton removed, which is the surgical drain doctors typically rely on when fistulas refuse to close.

The bigger news sits in what NSB has decided to do next. The company is initiating a pivotal Phase 2 trial specifically for fistulising Crohn’s disease in Australia, running in parallel with the previously announced US and Australia Phase 2 in the broader refractory Crohn’s indication. That second trial is the part the market should be working through carefully today.

Why running two Phase 2 trials in parallel changes the commercial timeline

Until today, the StemSmart program was a single Phase 2 readout away from any commercial conversation. The new Australia-only trial in fistulising Crohn’s disease is designed specifically to support Marketing Authorisation from the TGA, which CEO Nathan Smith described as a pathway to commercialisation earlier than previously forecasted.

We think that wording is the line investors should sit with. An Australian-only approval is a smaller prize than a US label, but it is a real revenue path that does not require waiting for the FDA. It also gives NSB a credible local commercial story to take to potential partners while the broader US trial runs.

The trade-off is cost. Running two Phase 2 trials at once eats cash faster than running one, and NSB was sitting on roughly A$7.5 million at last disclosure. A capital raise inside the next 12 months looks more likely than not, and investors should price that in rather than be surprised by it.

Five patients is still five patients, no matter how good the numbers look

The skeptical read here is straightforward. An 80% response rate across five patients is statistically thin, and the earlier Phase 2 work in refractory Crohn’s covered only 18 patients. The pivotal trial is where the data either holds up or does not, and that is the readout that actually matters for Marketing Authorisation.

Worth noting that the SAS cohort was younger adults who had exhausted conventional options, which is both the strongest case for the therapy and the patient group most likely to show a placebo-like response to any new intervention. MRI imaging showed a healing trend but was deemed too early to confirm full fistula closure.

The Mesoblast precedent still helps. The FDA approved an MSC therapy for graft-versus-host disease in December 2024, which means the regulatory pathway for this class of treatment is no longer hypothetical. That removes one of the bigger overhangs that used to sit on every Australian stem cell story.

The platform optionality the market is still ignoring

The Crohn’s market is the headline at roughly US$13 billion globally, but StemSmart is being positioned as a platform. NSB lists kidney transplant immunosuppression, lung inflammatory disease, and graft-versus-host disease as additional addressable indications, with combined market estimates pushing well beyond US$50 billion across those four areas.

Most of that is currently aspirational. None of those secondary indications have human data behind them at NSB, and the company has neither the cash nor the team to chase all of them simultaneously. The realistic read is that platform optionality becomes valuable only if the Crohn’s program delivers a clean Phase 2.

The Investors Takeaway for NeuroScientific Biopharmaceuticals

The 80% response number is genuinely strong, and the decision to pursue Australian Marketing Authorisation in parallel with the US trial is the right strategic move. It shortens the timeline to actual revenue and gives the company a near-term catalyst that does not depend on FDA decisions.

The question now is funding. With Phase 2 trials starting in the second half of this calendar year and cash sitting around A$7.5 million at last disclosure, the funding equation will define whether shareholders capture the upside or watch it get raised away. Investors can read our previous coverage of the SAS results at stocksdownunder.

We will be watching the Phase 2 protocol details, the cash position at the next quarterly, and whether NSB signals partnership interest from larger players. Those three data points will tell us more about the next 18 months than any further single-patient updates.