Neuroscientific Biopharmaceuticals Limited [ASX:NSB]
Pharmaceuticals & Biotechnology
A New Entrant in the Emerging Stem Cell Therapy Landscape
We initiate coverage on NeuroScientific Biopharmaceuticals Limited (ASX: NSB) with a fair valuation of A$0.60, representing a 225% potential upside from the latest share price of A$0.185. NSB is a biotechnology company focused on developing innovative therapies for immune-mediated diseases. Its recent acquisition of StemSmart™, a stem cell platform producing Mesenchymal Stromal Cells (MSCs), has shown promising results in Crohn’s disease and Graft-versus-Host Disease. Early data from both clinical programs highlight NSB’s potential to deliver impactful disease-modifying treatments in huge markets valued in excess of $10 billion USD. Notably, NSB’s closest peer, Mesoblast (ASX: MSB), which is also developing MSC-based therapies for immune-driven conditions, recently received FDA approval for its MSC product in paediatric GvHD — a landmark regulatory milestone that validates the therapeutic potential of this approach. Mesoblast currently trades at a market capitalization of ~AUD $3 billion, underscoring the potential re-rating NSB could achieve as it advances through clinical development.
StemSmart™ – A Promising Cell Therapy for Inflammatory Diseases
StemSmart™, developed by Isopogen WA and now owned by NeuroScientific, is a patented MSC therapy derived from adult bone marrow that modulates immune responses, reduces inflammation, and promotes tissue repair. It has shown strong clinical potential in Crohn’s disease, GvHD, kidney transplant support, and lung disorders. In a Phase II trial for biologic-refractory Crohn’s, StemSmart™ achieved 53% remission, outperforming Humira (AbbVie, NYSE: ABBV), which showed 36% and 21% in separate studies. A Phase I trial in steroid-refractory GvHD also showed high response rates and survival benefits in both adults and children. NSB is currently supporting a Special Access Program in fistulising Crohn’s disease to generate further real-world data ahead of broader trials.
Global Therapeutic Markets Highlight Strong Potential for NSB’s Pipeline
With a projected market size of USD 19.3 billion by 2035, Crohn’s disease treatment represents a major global opportunity, especially for innovative therapies like StemSmart™. With a projected market size of over USD 5.5 billion by 2035, GvHD treatment is a rapidly growing global market, driven by rising transplants and innovative therapies like StemSmart™. StemSmart™also holds transformative potential in immunosuppression and lung disease therapy, targeting two global markets worth over USD 96 billion combined by 2025.
Valuation range of A$0.57–0.63 per share
A probability-adjusted DCF valuation of NSB, focused solely on StemSmart™ for fistulising Crohn’s disease, indicates a mid-point fair value of A$0.60—representing 225% upside. Our valuation of NSB is highly sensitive to changes in market penetration and probability of success assumptions. See (Figure 11) on page 27 for sensitivity analysis results. We believe NSB offers a compelling speculative opportunity, with StemSmart™ showing breakthrough potential in refractory Crohn’s disease and strong momentum in the MSC therapy space. However, NSB faces typical early-stage biotech risks—including clinical, regulatory, IP, and market adoption challenges—that could impact timelines, valuation, and commercial success. See page 28 for catalysts and page 29 for key risks.