NeuroScientific (ASX:NSB) Reports 75% Response Rate in Crohn’s Trial: Is This Stem Cell Stock a Buy?

NeuroScientific jumps on early Crohn’s stem cell results

NeuroScientific Biopharmaceuticals (ASX: NSB) surged 43% on Tuesday after announcing promising early results from its stem cell program. Three out of four patients achieved a clinical response in a Special Access Program for fistulising Crohn’s disease. The company’s StemSmart therapy showed a 75% success rate in treating one of the most painful forms of Crohn’s. For investors, the big question is whether these early wins justify buying into a speculative biotech play.

Chief Medical Officer Dr Cathy Cole called the results “exceptional.” With the global Crohn’s disease market worth roughly US$13.8 billion, NeuroScientific is chasing a significant prize. However, only four patients have been treated so far, and Phase 2 trials are expected to commence in the second half of 2026.

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Why This Clinical Data Matters for Investors

Fistulising Crohn’s disease is one of the hardest conditions to treat in gut medicine. Up to 30% of Crohn’s patients develop fistulas, which are painful tunnels that form between organs. Standard treatments often fail, leaving surgery as the only choice.

What counts as a clinical response? Either at least half of the fistula openings close, or discharge drops by 50% or more. Hitting this target in three of four patients suggests real promise. But we must be honest: four patients are far too few to draw firm conclusions.

There is good news on the regulatory front. The US FDA approved Mesoblast’s MSC therapy for graft-versus-host disease in December 2024, the first such therapy approved in the US. While that was for a different condition, it proves stem cell therapies can clear FDA hurdles. NeuroScientific’s StemSmart already holds a TGA manufacturing licence, giving it a head start in Australia.

The Numbers Behind NSB

NeuroScientific trades at a market cap of approximately A$50-55 million. The company holds around A$7.5 million in cash, providing roughly two to three years of runway at current spending rates.

The share price tells a story of growing excitement following the StemSmart acquisition completed in June 2025 and clinical progress since then.

But perspective matters. Previous Phase 2 work in refractory Crohn’s disease treated 18 patients, with the majority showing improvement. That adds confidence. Still, the company is years away from real revenue, with Phase 2 trials not expected until the second half of 2026.

The Investor’s Takeaway

The bull case rests on proven technology, a large market opportunity, and a clearer path to approval following Mesoblast’s FDA win. The 75% response rate, while from a tiny group, hints that StemSmart works in the real world.

The bear case is equally clear. Four patients are not enough to bet on. Phase 2 trials are still 6-12 months away, and results will take longer. With only two to three years of cash runway, the company may need to raise money before key milestones. That would dilute existing shareholders.

At a market cap of around A$50-55 million with almost no revenue, NSB is priced for success. Investors are essentially betting on the Phase 2 outcome.

Our view: NeuroScientific is a high-risk, high-reward opportunity suited only for biotech-focused investors with long time horizons and strong risk tolerance. The early results are genuinely encouraging, but cautious investors should wait for Phase 2 data before buying. Watch for trial start dates and any capital-raising activity in the coming months.