My name is Roanna Ruiz. I'm one of the senior biotech analysts here at Leerink, and it is my pleasure to introduce ARS Pharmaceuticals. With me today, I have Richard Lowenthal, CEO, and Justin Chakma, Chief Business Officer. Thanks so much for joining me.
Thank you.
Yep.
Good to be here.
Yeah. I'll kick it off with a big picture question before diving in. Rich, could you just help recap for investors who are digging in on the story, just what are some of your goals for 2026 and thinking about neffy's progress so far as the first FDA-approved needle-free epinephrine nasal spray?
Yeah, I think for 2026, I think we're still focused on first expanding our access reach, especially on the commercial side. We anticipate getting to around 90% coverage by this summer. We're working on securing a few of the larger payers that we still have left to get unrestricted access, 'cause in this category, especially the PA burden is very high for the doctors. The number of prescriptions is, you know, each prescription's a low revenue, but there's a lot of them, almost 5 million prescriptions. It's a big barrier for doctors, more than in most categories. We need to focus on getting the rest of the access complete.
We're also now seem to be in a good spot with a lot of the Medicaid states to where we expect a lot of the Medicaid states to come on board very soon. Next one will probably be Florida, since we're in Florida. We are now kind of in a place where we know where most of the Medicaid states will move forward. It's good. It's showing great value of neffy. In fact, you know, they're willing to pay more than twice what they pay for EpiPen, so and that's for Medicaid. But that is also about 24%-25% of the market, so we wanna get that as well. That's really one of our big goals for this year, and especially going into the summer.
The second big goal is we're working on our Phase 2b study on urticaria, and we think that's a real value driver that people don't recognize yet. We're focused on getting that trial moving. It's already ongoing. We're expanding the sites we're enrolling. We're hoping by this summer, also third quarter, that we'll be able to do an interim analysis, and the interim analysis itself may be significant, because it's gonna be at around 20 people enrolled. In our first study, which was an in-house study in the clinic, was 20 people, and it was highly significant, especially on itch. Within about 5 minutes, we reached significance over placebo.
This new study is testing lower doses 'cause we believe we can even go to a lower dose, and then also outpatient assessments of people doing this at home, on their own, doing their own assessments as if they were, you know, real life type of study. We expect by mid-2027 to be able to start Phase 3, and one of the big reasons to do that interim is so that we can go to regulators and get agreement on the Phase 3 design. We wanna get that data as soon as possible.
Those are our two big goals this year, is really, you know, expanding access for neffy so that we start seeing a lot bigger uptake, which we would expect, and then also, focusing on the urticaria 'cause we think that's a value driver that people aren't recognizing yet.
Yep, makes sense. I'll start with the first goal or thinking about neffy in the commercial space. I know you've talked about before a little bit of physician burden with prior authorizations and stuff with neffy last year. Could you talk a bit about the Get neffy on Us program, how that's helping sort of work through these sort of slight challenges and, you know, how could that help maximize things with the upcoming back to school surge?
Since we launched, we did have an option on our website for virtual prescription. We just never promoted it, and it wasn't quite the way it is now. We decided, because of the PA burden, and it's really two factors. For doctors, it's the prior authorization burden. We wanted an option for the doctors, and the patients to be able to go to a virtual prescriber, who could also do the PA. What a lot of the doctors are doing, and we're still in the process of expanding the awareness of this and getting the doctors on board, and we do have, like, little notepads that have all the instructions and QR code, and the doctors can just give that to a patient. There's a few options a doctor has.
One is that they can prescribe themselves. If they want help with a PA, we have BlinkRx that can provide help and support. That means they're doing it themselves. They're signing the PA and sending it into the insurance company. The other option is they can write the script themselves. If the patient gets rejected at the pharmacy, if the insurance company rejects the claim, then the patient can just go to Getneffy.com and get UpScript to do the prescription and rewrite a prescription 'cause they gotta control the PA and then they're gonna do the PA for the patient, for the doctor.
It kind of gives the doctor that out to where, "Well, I'm not too worried about writing this script anymore, 'cause if it does get kicked back, the patient can just go there, and I don't have to deal with it." That's the other option there. Then there's always the option for the doctor to just send them to Getneffy.com right away and not even have to deal with it. We also train the patient everything through Getneffy.com so the doctor can actually save a lot of time if they're in the mode of, "I'm not worried about writing the prescription, but my patient wants it. They can go there and get it. I'm gonna tell them just go to Getneffy.com." The other reason for it is really the patient caregiver burden.
Mm-hmm.
You got to remember that in this category, if you see one of our ads, commercial or whatever, and you say, "I'd really like to get neffy," you call up your allergist, typical wait time for an appointment at an allergist is 3-6 months. The allergists still want to see the patient and counsel them, even though with neffy there's no training required. Our labeling doesn't require any training or anything, so technically they could prescribe it virtually and not be concerned. You know, after 40 years of that workflow of EpiPen and having to train, and they're just so used to it that they still want to see the patient, talk to them about it, and show them how to use the device.
That's a burden for the caregiver and patient. I mean, you know, if you have to make an appointment, it's 3-6 months away, and then you got to go in, it takes hours to go to the doctor and sit there and wait. It's a lot of work. Getneffy.com is maybe 10 minutes of time.
Mm-hmm.
Especially, you know, if your insurance company's covering, they can just send the prescription to your local pharmacy and it's real fast. If they need to do a PA, you got to wait for the insurance company to evaluate the PA. That's kind of another piece of it is that we wanna make it easier for patients and caregivers to actually get neffy as well.
Yep. Makes sense. I also noticed on your recent earnings call, you mentioned that no neffy product has expired yet.
Correct.
How are you thinking about the overall epinephrine market dynamics of refills and neffy uptake, and how do you expect that to evolve in this year?
About 50-60% of the market is refills due to expiration, just auto-injectors expiring. One of the barriers to getting involved or getting into that market is really that most of those prescriptions are refilled virtually, meaning the patient's not coming into the doctor. Somebody in the back room, a physician's assistant, somebody's just writing that script and sending it in. Patients often also, depending on the doctor you talk to, we've seen some doctors write, "Fill as needed," which is whenever you want another one, you can go to the pharmacy virtually, you know, you don't even have to talk to the doctor. Some of them limit the number of prescriptions.
I talked to one KOL who said he only allows them to get a couple because if they use an EpiPen, he wants to know they've used it and talk to them about what happened. It's a range of kind of different strategies doctors use. To get into that, if again, as I said before, the doctors wanna see people the first time they prescribe neffy and counsel them, so that we're dependent on the people going into the doctor's office. We are working on strategies to try to. One of them is also the Getneffy.com, so people realize they have an option, they can just go there and get it.
They don't have to worry, but we're also working on other strategies to try to break into that virtual market and disrupt it so that we can, you know, try to build that. Yeah, none of our initial launch batches have expired. They won't expire till the end of this year. We do expect some dynamics over the summer for refills due to expiration to start because of the schools. Schools require that you bring an epinephrine product that will cover the school year, so at least the nine months of the school year. Of all the product we have out there, a lot of it is gonna expire, you know, starting end of this year, beginning of 2027. Those initial launch lots, then that won't make it for the school year.
There may be some refill dynamics starting up this summer, but we would not expect it to occur till later. Now, once that starts to get into a normal cadence, then all the people that have had neffy and start refilling will have the advantage of those virtual refills. That will start to become an advantage over the future. For the first couple of years, it's, you know, something that we've been recognizing is something that's, you know, out there, and we're not getting the advantage of it yet.
Yep. Got it. Interesting. Thinking about real-world use of neffy, I mean, what have you seen in terms of the allergy challenge situations in doc offices, and how is that helping build prescriber comfort and awareness of neffy today?
Yeah, no, that's been very successful. In fact, one of our most successful programs is our neffy Experience program. When doctors use it in the clinic, they are high prescribers. The ones, when we look at doctors who have actually used it in the neffy Experience program and look at their market share, it's dramatically higher than in most other doctors. In fact, it's in the high teens for most of them on average. Having that experience, and that was the whole idea of the program, was one, you give the doctor the experience that it works the same, and they're really happy. We published some data from neffy Experience now on that already, where it seems to be, from the statistics, it's working exactly the same as injection.
We also see it in the confidence of the doctors to prescribe. It's also a better message to the patients, the caregivers. You know, if mom and dad come in and say, "You know, well, we really love this idea, but does it work the same?" It's the difference between a doctor saying, "Well, the data looks good, and the FDA approved it. It looks like it should work the same," versus, "I've used this, and it works exactly the same. We see great response.
Mm-hmm.
That's a different message to send to the patient and the caregiver. It's been very effective. Then we're also getting other data. You know, our registry study's ongoing. We have other, you know, anecdotal reports and things of even very severe reactions that have been treated and very successfully. We've had no real negative things come out of the marketplace so far, and we got a lot of people that have used it, so it's all heading in the right direction.
That's great. Thinking on the prescriber side, what are you sort of noticing in terms of what physicians say? Like, what kind of patients are requesting or asking for neffy, and what are you seeing in terms of are there switches from, let's say, auto-injector to neffy, or is it more new patient starts that are getting on neffy?
First of all, on the last part, it's around 75% switching.
Mm-hmm.
About 25% is really in that expansion market we've talked about, which is we have the people that have EpiPens now, and we are seeing, as I said, 75% of our market coming from that group. There's also about 25% coming from people that have been given a prescription but never filled it. They refused to fill it. They didn't want an auto-injector. So we see people in that category coming back to get neffy. We also see a little under 10%, but a reasonable percentage of the market that is coming from what we call the P3 group. This is the 13.5 million people that have been diagnosed but never even received a prescription. Most of them are not going to allergists.
Most of them only a couple% in the claims database go to allergists. Most of those people were diagnosed in an emergency room. Another doctor diagnosed them. They had an anaphylactic reaction. This is true anaphylactic diagnosis, or anaphylaxis and they've never been in the market. Those are completely new to the market. We are seeing that kind of expansion.
Yep. Great.
Sorry, what was the other part of the question? I apologize.
Oh, just, I think you answered most of it. Just thinking about, new patient starts, auto-injectors, and-
Yeah
... any sort of noticing what patients are asking for neffy.
Yeah, the patients, I mean, we still are a little on the kids side, so we are seeing still more children.
Mm-hmm.
Parents and children. It's not as big as it was when we first launched. When we first launched, it was about 65% kids. Now we're probably 55%. But we're also seeing good growth of the 1 milligram, and we do have it; it's on the FDA website, so we have a tentative approval, but just for an administrative reason that we're hoping it clears up this week or next week, where we've removed the age restriction from our label, and FDA has agreed to that. It was an efficacy supplement. We've provided data to them to show that we don't need the age restriction, and they agreed. Very shortly we'll lift that age restriction. Again, the label's already on the FDA website.
They already for some reason posted it even though it's just tentatively approved. That will expand that younger population even more, 'cause there's a lot of three-year-olds, maybe even some two-year-olds, that are 15 kilos, 33 pounds. Right now, doctors are still reluctant to prescribe to them. I think we have about of the neffy sales, it's about 17% of the children, that younger population, and it should be more than 20%, so we think there's another 4 or 5% there that probably will come in once we can get that age restriction lifted.
Yep. Super interesting. Wanted to also check in, if you could refresh for us, you know, where do things stand today in terms of, you know, percent of covered lives that are unrestricted? I know you alluded to this a little bit in terms of your goals for payer coverage, so just like help level set.
Right. With commercial coverage, it's 57% of covered lives are unrestricted access, meaning they just get the prescription, go to the pharmacy and pick it up. And that includes some of the big ones, Express Scripts, Optum, UnitedHealth Group in total, 'cause UnitedHealthcare, Optum, and some other, Cigna, and some other big companies. We've got pretty good coverage in that regard. And then about 93% overall, the other, you know, 36% requiring a PA. We got very few companies that are not covering or blocking, and it's really a handful of Blue Cross companies out there. We have pretty good coverage. Again, this is a sensitive market to the PA.
Even where most products would say that's really good for the stage of the launch, we got two of the three PBMs covering. We're getting pretty close with the third. Still, even that percentage of PA required is a lot for this population. Again, when you go to general practitioners who are really not used to writing PAs, allergists are a little better, but the pediatricians and general practitioners are even more resistant to writing PAs. That's why one of our major goals is obviously to try to improve that. Then on the Medicaid side, as I said, we have eight states that cover it as preferred right now, which means no restriction.
We are now in a good place with the buying groups, 'cause there's a few buying groups that represent a lot of the smaller states. Florida is independent, but their P&T committee actually is this week, and we've been invited and looks like it's a go. We'll be on Medicaid in Florida shortly. We're talking to a lot of other big independent states, and we think we have a good situation to expand that pretty rapidly over this year.
Again, with the Medicaid states, for some of them, even if they're positive about everything, they're positive about the medical need, they're positive about the price. We still got to wait for their P&T committee, so that's going to be over the course of the rest of this year that we'll see a lot of other Medicaid states come on board.
Yep. Got it. One question I get sometimes from investors is just thinking about the DTC campaign for neffy so far, like, and going forward, how are you thinking it's gonna evolve into 2026 and then 2027? What metrics are you tracking that's giving you confidence in, you know, continuing to invest here?
Yeah. The DTC campaign, it's pretty broad. We're on TV, connected TV, linear TV, connected TV, social media, pop-up, you know, search, things like that. We've seen a really good improvement in awareness of neffy. We went from around 20% to well over 60%, aided awareness with the consumers, and even improvement in awareness among doctors. Doctors' awareness is much higher, of course, but consumer awareness and getting people to know that neffy's out there, and as I said, to want to go to their doctor and ask for it or to go to Getneffy.com. The other thing we've done, only in the last few months is switch our advertising to be a little bit more direct on the benefits of neffy.
Originally our advertising was very positive and celebrating neffy, but then we wanted to get to really, you know, what is the issue? You know, that you're sending your child to school, they're hesitant to use auto-injectors, but you're more confident that they're gonna have neffy and you'd be willing to use it. Or you're a young adult on the go and neffy's just a lot easier to take with you and manage your life. And so those messages are out there now with the new advertising which we switched over, and we are focused on, in that advertising the Getneffy.com as well as our pricing strategy. We think that message is really getting out there. We do see. Again, because we are dependent on people going to the doctor at this point.
Mm-hmm
getting a prescription with the doctors, we do see impact of things more than the auto-injectors because a lot of their prescriptions are virtual. We do see an impact of things like holidays or bad weather on the East Coast. You get blizzards and stuff like that, and we actually see that because people can't get to the doctor or don't go because it's a holiday week, right? So creates a little bit more fluctuation in the IQVIA numbers, but-
Yeah
It's all kind of expected when you think about it.
Okay. Got it. Wanted to ask a little bit about the ALK partnership as well.
Yep.
You have the U.S. co-promote for Pediatrix and then also in Europe as well.
Right
... with your partner. What are some of the early learnings from working with ALK on both of these fronts?
Yeah. Well, first of all, I think the relationship with ALK-Abelló is really good. I think they've been very communicative about anything that's going on, and they've listened very carefully to us. Our pricing in Europe has been quite remarkable, in fact. In fact, it puts us in a very good position in the U.S. if there's any most favored nation pricing type of situation. The European price is substantially higher than we expected, really 2x of what they're paying for EpiPen, so they're willing to pay double. They've launched in a number of countries already, especially Germany, U.K. are the two biggest. Those are the two biggest markets in Europe. They're picking up very well.
In fact, one of the other things when we talk about access is in Germany, they got immediate universal coverage. They got central coverage and pretty much no PAs at all, zero. They're already, what, close to 20% of the market share?
Yeah, 17%.
Over 17% of the market share in Germany. That just tells you that, you know, same message we're getting in the U.S., the docs love it. The docs much prefer neffy, and then you say, "Okay, but why aren't you prescribing?" It's the system in the U.S. While we're always not necessarily a fan of socialized medicine, but nonetheless, a single payer makes a big difference, right? You get universal coverage, and that makes a big difference in sales. They're doing super well. I think they're doing well in the U.S. too with the co-promote. It's been a very positive relationship. We're pretty happy with the ALK folks.
Okay. Great. I want to circle back to CSU because I know you helped give some timelines and expectations for that program for neffy that's working behind the scenes a little bit. I was curious maybe to just give a little bit of background to investors who are digging in on CSU with neffy. Could you give a little bit of the rationale and some of the early evidence.
Yeah, sure. Sure.
Just dig in a little bit more on why you're really excited about pursuing this?
Yeah. The genesis of this idea, just so you know, is when you talk to the older allergists, okay, you know, it's kind of something that people forgot. Long time ago, before antihistamines, that's how long ago we're talking about. Some of these older allergists didn't have antihistamines when they first started. Patients came in with real severe events of urticaria, and they'd give them a shot of epinephrine, and it was amazingly effective. That and the fact that we wanted to demonstrate the beta-2 response, which is a mast cell response, and that's really important that you can demonstrate that. We ran the first urticaria study, which was in the clinic, and it really, neffy has an amazing effect.
I mean, it's as I said, the main thing that happens with these patients is when they have a flare. We're not talking about using epinephrine chronically. They'll be on their base antihistamine therapy, or they'll be on a biologic Xolair, and they'll be on that base therapy. Even when they're on that base therapy and they're quote unquote controlled, they're having flares, and these flares are big outbreaks of urticaria, and sometimes it can be very intense. In fact, even if you go to the Xolair phase 3 studies, the publications, people went to the emergency room, you know, 4-6 times a year on average, depending on the study, because of these flares. What they're going to the emergency room for is mainly that itch. I mean, they're it's just intense. They're just
They can't put on clothes, they go to emergency room. A lot of times they get IV antihistamine or IV steroids to try to get it under control. Some people could take steroids at home and, you know, it might take 4 or 5 hours to get an effect, but some people respond to steroids at home. Of course, doctors don't like to be giving steroids. The epinephrine is amazingly effective. It's within minutes. Literally 5 minutes, as I said, on itch, we were statistically significant. I think it was almost completely resolved in 15 minutes. It's a very easy way to treat that flare, that acute reaction at home, and it would be an add-on to antihistamines or to Xolair. It wouldn't be replacing those therapies.
If you also think about why do people progress from antihistamine, which is really cheap. I mean, go to Costco, it's probably $200 to take even 4 times the dose for the entire year. It's really cheap to stay on antihistamine therapy. Why do they step up to a Xolair or to other biologics now? It's mostly due to those flares. They're trying to find something that's working better. Now, the Xolair still people are having the flares, right? We think it's 50%-60% of the population has these flares.
If they could just take a lower dose, we're already confident it will be much lower dose than what you're using for food allergy, and maybe even a dose that would cause almost no cardiovascular effect, you know, not more than standing up from a chair. That's what we want, is we wanna get that beta-2 response stabilization of the mast cells without much side effect. We think that neffy would be a great option. It wouldn't be called neffy, it would be a different product, but that intranasal epinephrine is a great way for those people to be able to treat themselves and knock down those flares, and it would be very safe 'cause the dose would be very low.
So we think that's really a good market, and there's nothing else in that space. There's nothing in that market right now. We also, as I said, believe it's a good pharmacoeconomic argument for insurance companies, because if we can prevent an emergency room visit. That alone is probably great. Even if they're on Xolair, you can probably argue that there'd be less emergency room visits and it's worth paying for. Or if you're arguing that you don't need to step up as many people from antihistamine to Xolair or to other biologics, that's a huge difference in cost. To an insurance company, it actually seems like a very positive type of idea, even though it's an add-on, but you gotta justify the cost. It should be very positive.
The population's not as big as food allergy, of course, but they'll use it many times during the year.
Yep.
They'll use it if they're having a flare every month, which is not uncommon. In fact, in our study, we're enrolling people that have at least one flare a month on average. You know, then they're gonna be using a dozen, half a dozen if it's every other month. That's, you know, we think it's a very good market, maybe as big as food allergy.
Got it. Interesting. You’ve got a lot going on.
Yeah.
You're working forward with CSU flares. You're also actively deepening the launch of neffy in the US.
Right
expanding to Europe and other countries.
Right.
Wanted to ask a bigger picture question. Just how are you prioritizing execution across all these fronts and capital allocation and stuff like that?
We're obviously, as ARS, we're focused on the U.S.
Mm-hmm.
We have our partners overseas, so that's all royalty and they're all paying COGS and royalties and things like that. The only impact on ARS for the overseas market is really a little bit on the regulatory side 'cause we're still supporting them on regulatory and on the operations side 'cause we're still manufacturing for the world right now. We are working on a second manufacturing site in the European region, which will then take some of the burden off our US site. Our US site has more than enough capacity. Our Chinese partner, Pediatrix, is launching this month in China. You know, that's a kind of a black box market because there's 70 million people in China with this disease, and there's no community use product right now.
There's no EpiPens. There's no auto-injector. neffy will be the first product ever in China that can be used outside of a hospital. For food allergy or venom allergies. They have a right to manufacture in China eventually. As the market builds in China, we would anticipate having a third manufacturing site in China as well.
Great. Sounds good. In the last minute, wanna ask another zoomed out question. What do you think the market most underappreciates about the ARS Pharma story right now?
Yeah, I think, you know, for the US, there's a couple things. One, the food allergy market, I think we are building a good base. We've got a lot of doctors, over 22,000 doctors that have prescribed now, and we're building a good base of patients. So as we get into that, you know, renewal, the prescription renewals, when they start to expire, I think that will start to really build the market 'cause we'll start compounding our market. So what you're seeing now is just new patients. It's all pretty much new patients. And then the urticaria. People don't recognize the value of that indication. We think some of the KOLs are really excited.
It's a little bit of a mix if you talk to random doctors, 'cause if they don't understand exactly what we're doing, sometimes they don't quite get it yet. If you talk to people like Jonathan Bernstein, who really understands what we're trying to do, I think he's super positive about this idea 'cause he realizes there's nothing else. He's one that even has patients that he'll step up from Xolair to cyclosporine to get them to try to get under control 'cause they're having these flares. It for him, it's a really great idea.
In fact, he's even one that suggested to us that you could use the intranasal epinephrine first when a person first comes in while you're still trying to stabilize them on antihistamine or a biologic to figure out what's gonna work for them, but you can give them relief right away by giving them the epinephrine because you know it's gonna work.
Yep.
It's a very low risk program, actually, because we know it works. There's no question it's gonna work. It's just a matter of execution.
Yep.
It's a very low risk program.
Got it. Great. Well, thanks so much for joining me.
Oh, good.
Appreciate it.
Thank you. Thank you. Appreciate it.