Executive Summary / Key Takeaways

• ARS Pharmaceuticals is pioneering the emergency treatment of Type I allergic reactions with neffy, the first and only FDA and EC-approved needle-free intranasal epinephrine product, addressing significant unmet needs like needle anxiety and portability that limit the use of traditional auto-injectors.
• The U.S. commercial launch of neffy (2mg in Sept 2024, 1mg in May 2025) is underway, showing early traction with high-decile prescribers and strong interest from patients and caregivers, supported by strategic initiatives including a direct sales force, ALK co-promotion, and a planned comprehensive direct-to-consumer campaign.
• Securing unrestricted commercial payer access is a critical near-term focus to overcome prior authorization hurdles; the company is targeting over 80% unrestricted coverage by early summer 2025, a key factor expected to drive a significant inflection in prescription volume starting in Q3 2025.
• A strong balance sheet, bolstered by a $145 million upfront payment from the ALK ex-U.S. licensing deal, provides financial flexibility to accelerate U.S. commercial investments and fund pipeline expansion, including a planned Phase 2b trial for chronic spontaneous urticaria.
• While initial financial results reflect launch investments and reliance on zero-cost inventory, the long-term outlook is tied to successful market penetration against established competitors, achieving payer coverage goals, and leveraging global partnerships to capture a significant share of the estimated multi-billion dollar addressable market.

Setting the Scene: A New Era for Anaphylaxis Management

ARS Pharmaceuticals is at the forefront of transforming the emergency treatment landscape for Type I allergic reactions, including life-threatening anaphylaxis. The company's core focus is the commercialization and development of neffy, a groundbreaking needle-free intranasal epinephrine spray. This innovative product represents the first new delivery method for epinephrine in over 35 years, directly addressing long-standing limitations associated with traditional injectable auto-injectors.

The market opportunity for neffy is substantial. In the United States alone, an estimated 40 million people experience Type I allergic reactions. Of these, approximately 20 million have been diagnosed with severe reactions potentially leading to anaphylaxis. While about 6.5 million patients were prescribed an epinephrine autoinjector in the last three years, only 3.2 million filled their prescriptions in 2023, and merely half of those consistently carry their prescribed device. This leaves a vast population of diagnosed patients unprotected, highlighting a critical unmet medical need that neffy is designed to fulfill. The near-term addressable market among currently prescribed patients is estimated at $3.0 billion in annual net sales, with an additional $7.0 billion opportunity among the 13.5 million diagnosed but untreated patients.

Neffy's technological differentiation lies in its proprietary composition of epinephrine combined with the Intravail absorption enhancer, enabling safe and effective intranasal delivery. Clinical data has demonstrated that nasally delivered epinephrine achieves blood levels comparable to approved injectable products across various conditions, including repeat dosing and allergen challenge. Studies have also shown statistically significant pharmacodynamic responses compared to injection, even within one minute of dosing. The needle-free design eliminates needle-related apprehension and pain, improves portability and ease of use, and is designed for high reliability and temperature stability. These attributes are intended to increase prescription rates, encourage earlier administration, and potentially prevent reactions from escalating to severe outcomes.

The company's journey to this point involved strategic steps, including licensing key technology from Aegis, securing capital through a reverse merger with Silverback Therapeutics (SBTX) in 2022, and establishing international partnerships. These foundational elements have positioned ARS Pharma to launch neffy into a competitive landscape dominated by established injectable products like Viatris 's EpiPen, Teva 's generics, Sanofi 's Auvi-Q, and Symjepi from Sandoz . While these competitors benefit from scale and established market presence, neffy's unique delivery method offers a distinct value proposition aimed at disrupting the status quo and capturing market share by addressing patient and caregiver barriers to treatment.

Building the Commercial Engine: Launch and Market Penetration

Following FDA approval in August 2024, ARS Pharma initiated the U.S. commercial launch of neffy 2mg in September 2024. This was quickly followed by the FDA approval of neffy 1mg in March 2025 for younger pediatric patients (15 to < 30 kg), with its commercial availability starting in May 2025. The 1mg dose is particularly significant, representing 23% of all epinephrine units dispensed in 2024 and over half of prescriptions for children, a key demographic where needle anxiety is prevalent.

The company's launch strategy is multi-faceted, focusing on direct engagement with high-volume prescribers. The sales force, comprising approximately 120 ARS Pharma employees, began field operations in October 2024. This effort is being significantly bolstered by a co-promotion agreement with ALK U.S., which will add approximately 60 sales reps targeting up to 9,000 pediatricians and other prescribers starting in early June 2025, expanding the promotional reach to over 20,000 healthcare providers. Early commercial progress is encouraging, with the sales force reaching over 5,700 healthcare providers by Q3 2024 and over 1,700 physicians submitting prescriptions through the neffyConnect program, 80% of whom are in the highest prescribing decile. The neffy Experience Program, allowing over 2,500 allergists to use neffy firsthand in clinical settings, has also shown strong enrollment and positive early feedback, with participating doctors prescribing neffy at 2.5 to 3 times the national average.

A critical focus for the launch is securing broad payer coverage to minimize access barriers. As of Q1 2025, over 57% of U.S. commercial lives have access to neffy without prior authorization, a significant increase from 27% at the start of the year. The company is actively negotiating with major payers and group purchasing organizations (GPOs), having recently secured agreements with MSR and Zinc, which are expected to provide unrestricted access through OptumRx (UNH), UnitedHealthcare, CVS Caremark (CVS), Anthem (ELV), and Aetna by early summer 2025. This progress is anticipated to bring unrestricted commercial coverage to over 80% by that time. Prior authorizations have been identified as a major administrative burden for physicians, limiting prescribing volume despite high interest. The percentage of prescriptions requiring a PA has decreased from ~70% at the start of 2025 to ~45% in Q1 2025, with approval rates between 60-80%. Achieving the 80% unrestricted coverage target is expected to significantly reduce this burden and drive a material increase in prescription volume.

Patient affordability is addressed through the neffyConnect program, offering a co-pay savings card that allows most commercially insured patients to pay as little as $25 per prescription, which is less than the typical $40 co-pay for a generic injector. A cash price of $199 is available for uninsured or high-deductible patients, and a patient assistance program supports eligible underinsured individuals. The company is also launching a comprehensive direct-to-consumer (DTC) campaign in May 2025, with a planned investment of $40-$50 million for the remainder of the year, primarily in Q2 and Q3. This campaign aims to raise patient and caregiver awareness and drive demand, aligning with the anticipated increase in unrestricted payer access and the peak summer/back-to-school prescribing season.

Financial Performance Underway

ARS Pharma's financial profile reflects its transition to a commercial-stage company heavily investing in market penetration. For the three months ended March 31, 2025, the company reported total revenue of $8.0 million. This included $7.8 million in net product revenue from neffy sales in the U.S. and $0.2 million in collaboration revenue from the ALK agreement. This is a significant increase from $0.0 million in total revenue for the same period in 2024, prior to neffy's launch.
Operating expenses totaled $45.1 million in Q1 2025, a substantial increase from $13.2 million in Q1 2024. This rise was primarily driven by a significant increase in selling, general, and administrative (SG&A) expenses, which surged from $8.0 million in Q1 2024 to $41.1 million in Q1 2025. This increase reflects the build-out and deployment of the sales force, marketing campaign development, and other commercial infrastructure costs. Research and development (R&D) expenses decreased from $5.2 million in Q1 2024 to $3.0 million in Q1 2025, primarily due to reduced CRO-related and personnel costs as development activities shifted towards commercial support.

Cost of goods sold was $1.1 million in Q1 2025, benefiting from the utilization of zero-cost inventory manufactured prior to FDA approval. Initial gross-to-net discounts were slightly over 60% in Q1 2025 but are expected to decrease towards 50% as payer coverage improves.
The net loss for Q1 2025 was $33.9 million, compared to a net loss of $10.3 million for Q1 2024. The accumulated deficit as of March 31, 2025, stood at $157.2 million.

The company expects operating expenses, particularly SG&A, to increase substantially throughout 2025 due to the full year impact of the sales force, accelerated marketing investments (including the $40-$50 million DTC campaign), and costs associated with the ALK co-promotion agreement (adding approximately $8 million in operating expense for 2025). Total projected operating expenses for 2025 (excluding COGS and stock-based compensation) are between $210 million and $220 million.

Strategic Partnerships and Global Expansion

ARS Pharma has strategically partnered to expand neffy's reach beyond the U.S. market. A significant development was the exclusive licensing agreement with ALK in November 2024, covering Europe, Canada, and other territories (excluding U.S., Japan, China, Australia, New Zealand). This partnership provided a substantial $145 million upfront payment and includes potential regulatory and commercial milestones up to $20 million, sales-based milestones up to $300 million, and tiered royalties on net sales. The agreement leverages ALK 's established allergy-focused commercial capabilities in 46 countries. Due to a repurchase option embedded in the agreement for the European Economic Area rights, a portion of the upfront payment is accounted for as a financing liability rather than immediate revenue, though the cash is available to ARS. The company expects to receive $5 million in cash proceeds from ALK milestones in each of Q2 and Q4 2025.

Beyond the ALK deal, ARS has existing partnerships with Alfresa for Japan, Pediatrix for China and surrounding regions, and Seqirus for Australia and New Zealand. Regulatory submissions have been completed in these territories, with decisions anticipated by mid-2025 in the U.K., the second half of 2025 in Japan, and year-end 2025 in Canada and Australia, and the first half of 2026 in China. EURneffy 2mg is already approved in the EU, with commercial launches expected by mid-2025 in Germany and the U.K. (pending approval). These partnerships position neffy for potential commercialization in countries representing approximately 98% of the current global epinephrine autoinjector sales, establishing a global footprint within a year.

Pipeline Expansion and Future Growth Drivers

While the primary focus is on the commercialization of neffy for its approved indications, ARS Pharma is also exploring opportunities to expand its intranasal epinephrine technology into additional indications. The most advanced of these is the evaluation of neffy for the treatment of acute flares in patients with chronic spontaneous urticaria (CSU). CSU affects an estimated 1.5 million patients in the U.S. who experience unpredictable and often severe flare-ups despite being on chronic therapies like antihistamines or biologics.

ARS plans to initiate a Phase 2b randomized, placebo-controlled outpatient clinical trial in CSU patients in the second quarter of 2025. This study is designed to evaluate the potential of neffy to provide rapid relief for these acute exacerbations. With a planned enrollment of 600 patients (400 on neffy, 200 on IM injection), this will be the largest randomized controlled study ever conducted with epinephrine. Topline data from this trial are anticipated in early 2026, potentially followed by the initiation of a single pivotal efficacy study later that year. This represents a significant pipeline opportunity that could address a distinct unmet need and contribute to future revenue growth. Additionally, the company initiated a U.S. post-marketing registry-based study for neffy in oral food challenge or allergen immunotherapy clinics in Q2 2025, gathering real-world evidence on neffy's use in a clinical setting.

Competitive Positioning and Market Dynamics

ARS Pharma operates in a highly competitive market dominated by established injectable epinephrine auto-injectors. Viatris , with its EpiPen franchise, holds a significant market share, benefiting from brand recognition and extensive distribution. Teva (TEVA) and Sandoz (SDZ) offer generic alternatives, competing primarily on price. Sanofi , through its partnership for Auvi-Q, differentiates with device features like audio instructions. Beyond injectables, several companies are developing alternative delivery methods, including other nasal sprays (Bryn Pharma, Nasus Pharma, Hikma, Orexo, Belhaven BioPharma) and sublingual candidates (Aquestive Therapeutics (AQST)).

Neffy's key competitive advantage lies in its needle-free intranasal delivery, enabled by the proprietary Intravail technology. This offers tangible benefits over injectables, such as eliminating needle anxiety (a major barrier for patients and caregivers), improving portability (smaller size), and simplifying administration. While direct, publicly available quantitative comparisons across all competitors for metrics like administration time, compliance rates, or manufacturing costs are limited, neffy's design is strategically positioned to improve patient compliance and ease of use, factors that are critical in emergency situations and represent a significant differentiator from the current standard of care. The company's focus on securing broad unrestricted payer access is a direct strategic response to the competitive landscape, aiming to remove administrative hurdles that favor established, broadly covered products. The ALK co-promotion agreement specifically targets the pediatric segment, leveraging ALK 's expertise to penetrate a market particularly sensitive to needle-related issues.

Despite being an early commercial-stage company with lower scale compared to pharmaceutical giants like Viatris (VTRS) or Sanofi (SNY), SPRY's rapid revenue growth since launch and its focus on innovation provide a competitive edge. Its gross margin profile (over 60% in Q1 2025) appears favorable, although high SG&A costs associated with the launch impact overall profitability. The company's reliance on third-party manufacturing and distribution, while common in the industry, introduces supply chain risks that competitors with integrated facilities may mitigate. However, SPRY's strategic partnerships and focus on securing supply agreements (e.g., with Renaissance for manufacturing, Ompi for microvials) are designed to manage these dependencies.

Risks and Challenges

Investing in ARS Pharma involves significant risks inherent in the biopharmaceutical sector. The company's near-term success is highly dependent on the commercial performance of neffy in its approved indications. Failure to achieve sufficient market acceptance by physicians, patients, and caregivers, or to secure and maintain adequate payer coverage and reimbursement on favorable terms, would materially adversely affect its business and stock price. Competition from established injectables and emerging alternatives poses a constant threat.

Operational risks include reliance on third parties for manufacturing and distribution, potential supply chain disruptions, and the ability of international partners to successfully develop and commercialize neffy in their territories. The company also faces risks associated with developing neffy for additional indications like CSU, including potential development delays, clinical trial failures, and the ability to navigate regulatory pathways. Intellectual property risks, including the outcome of the EPO opposition and the Aptar (ATR) lawsuit, could impact the company's ability to protect its technology and commercialize its product. Furthermore, the company has a history of significant operating losses and will require substantial future funding to support its growth strategy, although its current cash position provides a runway of at least three years. Macroeconomic factors and changes in healthcare legislation could also adversely affect the business.

Outlook and Investment Thesis

ARS Pharma is poised for a pivotal year of commercial execution in 2025. Management projects total operating expenses (excluding COGS and stock-based compensation) between $210 million and $220 million for the year, reflecting accelerated investments in the U.S. launch. A significant portion of this is allocated to the DTC campaign and expanded promotional efforts through the ALK (ALK) co-promote. The company anticipates a significant inflection point in prescription volume and revenue starting in Q3 2025, driven by the expected achievement of over 80% unrestricted commercial payer coverage by early summer, the impact of the DTC campaign raising patient awareness, and the availability and uptake of the 1mg pediatric dose coinciding with the peak summer and back-to-school season.

The company's strong cash position of $275.7 million as of March 31, 2025, provides financial flexibility to fund these accelerated commercial initiatives and advance its pipeline, including the planned CSU trial, while maintaining an operating runway of at least three years.

The investment thesis centers on SPRY's potential to disrupt the anaphylaxis market with a differentiated, needle-free technology that addresses critical unmet needs. Success hinges on effectively executing the U.S. launch by overcoming market access hurdles and driving adoption, leveraging global partnerships for international expansion, and demonstrating the potential of its technology in new indications like CSU.

Conclusion

ARS Pharmaceuticals has successfully transitioned to a commercial-stage company with the launch of neffy, a truly differentiated product in the emergency treatment of allergic reactions. By offering a needle-free alternative, neffy is uniquely positioned to address key barriers to epinephrine use, potentially improving patient outcomes and expanding the overall market. The company's strategic focus on securing broad payer access, executing a comprehensive marketing campaign, and leveraging partnerships is critical to realizing neffy's blockbuster potential in the multi-billion dollar addressable market.

While significant investments in commercialization are impacting near-term profitability, the strong cash position provides the necessary resources to drive growth and explore pipeline expansion opportunities like the CSU program. Investors should closely monitor the company's progress in achieving its payer coverage targets, the impact of the DTC campaign on prescription volume, the uptake of the 1mg pediatric dose, and the execution of its global expansion strategy through its partners. The successful execution of these initiatives will be key to establishing neffy as the new standard of care and delivering long-term value.