NeuroScientific Posts $4.69M Loss, Plans Phase 2 Trials for StemSmart™

Loss Widens as NeuroScientific Scales StemSmart Development

NeuroScientific Biopharmaceuticals (ASX:NSB) reported a net loss of $4.69 million for the year ended 30 June 2026, a 154% increase from the $1.85 million loss in FY2025. The widening loss reflects intensified research and development, regulatory, and manufacturing activities as the company advances its StemSmart™ mesenchymal stem cell (MSC) technology platform.

Despite the loss, total income surged nearly 279% to $629,398, largely boosted by a $402,659 R&D tax incentive. The company remains pre-revenue, with losses expected to continue as it progresses clinical programs and scales manufacturing.

StemSmart™ Progresses with Positive Clinical Signals and Manufacturing Transfer

NeuroScientific’s key focus during FY2026 was the StemSmart™ platform, acquired in June 2025 through the Isopogen WA Ltd acquisition. The company successfully transferred the patented StemSmart™ manufacturing process to Q-Gen Cell Therapeutics, one of Australia's largest cell therapy contract manufacturers, in preparation for a TGA audit scheduled for October 2026. This audit aims to expand Q-Gen’s manufacturing license to support Phase 2 clinical trials planned for early 2027.

Clinical outcomes from a small cohort of patients with fistulising Crohn’s disease treated under the Therapeutic Goods Administration’s Special Access Scheme (SAS) were encouraging. In May 2026, NeuroScientific announced that 4 of 5 patients achieved a successful clinical response, defined as closure or significant reduction of fistulae, with no serious adverse events reported. These results reinforce prior Phase 2 findings showing a 78% response rate in refractory Crohn’s disease, validating StemSmart™’s therapeutic potential and informing the design of upcoming trials.

Planning is underway for two Phase 2 clinical trials targeting treatment-resistant Crohn’s disease, including clinical protocol development, a pre-Investigational New Drug (pre-IND) meeting request with the US Food and Drug Administration, and selection of a Clinical Research Organisation to execute the trials. This regulatory engagement is a critical step toward potential US market entry and trial approval. The company’s cash and term deposits totalled $4.63 million at year-end, underpinning these development activities.

Strategic Shift on EmtinB Glaucoma Asset

In a notable strategic pivot, NeuroScientific ceased independent development of EmtinB, its glaucoma drug candidate. Following a comprehensive technical and commercial review, the Board decided to pursue out-licensing and strategic partnerships to advance EmtinB. The decision reflects the recognition that specialised ophthalmic peptide development expertise and resources are required to progress the asset effectively.

Consequently, the carrying value of the EmtinB exclusive licence was fully impaired, with a $210,928 expense recognised in FY2026. No committed out-licensing agreements were in place at year-end, leaving the asset’s future advancement contingent on external partnerships.

Leadership Enhancements and Governance

To support its development programs, NeuroScientific appointed Nathan Smith as Chief Executive Officer and Dr Catherine Cole as Chief Medical Officer in mid-2025. Both bring extensive experience in GMP manufacturing, corporate leadership, and clinical haematology-oncology, respectively. The company also established a Clinical & Scientific Advisory Board chaired by Dr Cole to guide clinical and regulatory strategies for StemSmart™.

Financial Position and Outlook

NeuroScientific ended FY2026 with net assets of $14.8 million, down from $16.8 million a year earlier, reflecting accumulated losses and share-based payment expenses. Cash flow from operations was a negative $2.78 million, driven by increased R&D and administrative costs. The company holds 389.7 million shares on issue, with major shareholders including Sturm West Pty Ltd and Paul Fry holding over 10% and 5% respectively.

The Directors affirmed the company’s ability to continue as a going concern, citing sufficient cash reserves to fund forecast expenditure for at least the next 12 months. The financial statements were audited with an unqualified opinion.

NeuroScientific’s next key milestones include the upcoming TGA manufacturing audit for StemSmart™, initiation of Phase 2 clinical trials for Crohn’s disease, and progress on out-licensing negotiations for EmtinB. These catalysts will be critical in shaping the company’s development trajectory and investor sentiment.

Given the inherent uncertainties in clinical development and licensing negotiations, the path forward remains contingent on regulatory approvals, trial outcomes, and strategic partnerships.