Street Calls of the Week
SAN DIEGO - ARS Pharmaceuticals, Inc. (NASDAQ:SPRY), currently valued at $968.5 million and trading near its 52-week low of $9.73 compared to its high of $18.90, announced Monday it has secured a senior secured term loan facility of up to $250 million from affiliates of RA Capital Management and OMERS Life Sciences. According to InvestingPro data, the company maintains a strong balance sheet with more cash than debt.
The company has initially borrowed $100 million to accelerate commercial growth of neffy, its FDA-approved needle-free epinephrine nasal spray for emergency treatment of allergic reactions including anaphylaxis. The company’s robust liquidity position is evidenced by a current ratio of 6.17, with liquid assets well exceeding short-term obligations.
The funding will support marketing initiatives and help generate real-world evidence about neffy’s effectiveness. According to the company, neffy has nearly doubled its prescriber base across allergy, primary care, and pediatrics over the past four months.
The loan facility includes an interest rate of SOFR plus 5.5% with a 3.0% SOFR floor, and interest-only payments until maturity in September 2030. The agreement provides for interest rate reductions of 25-50 basis points upon achieving certain sales milestones.
Beyond the initial $100 million, the facility includes two additional $25 million delayed draw term loans available under specific conditions, plus an uncommitted $100 million incremental term loan subject to lender agreement.
"This capital from RA Capital, a top-tier healthcare fund and long-time investor in ARS Pharma, in partnership with OMERS Life Sciences, provides the added resources to scale our commercial activities rapidly while preserving shareholder value," said Richard Lowenthal, Co-Founder, President, and CEO of ARS Pharma, in the press release.
Adam Kaye, Senior Managing Director at RA Capital, stated, "Based on its unique product profile and accelerating commercial traction, we see significant potential for neffy."
ARS Pharma expects its pro forma cash resources based on the committed capital to fund operations through expected cash-flow breakeven. While the company is not yet profitable, with an EBITDA of -$58.73 million, analysts maintain a bullish outlook with an average consensus rating of 1.17 (Strong Buy). For deeper insights into SPRY’s financial health and growth potential, including additional ProTips and comprehensive analysis, visit InvestingPro.
In other recent news, ARS Pharmaceuticals has announced that Japanese regulators have approved its needle-free epinephrine nasal spray, Neffy, for emergency treatment of allergic reactions. This approval by the Pharmaceuticals and Medical Devices Agency (PMDA) in Japan includes both 1 mg and 2 mg doses for adults and children over 15 kilograms, marking the first needle-free epinephrine treatment available in Japan. Additionally, Raymond James has maintained its Strong Buy rating for ARS Pharmaceuticals, highlighting the positive market share trends for Neffy, which saw an increase from 3.35% to 3.74% in market share week-over-week. Roth/MKM has also initiated coverage of ARS Pharmaceuticals with a Buy rating, citing the potential of Neffy and setting a price target of $40.00. In a separate development, ARS Pharmaceuticals received a Paragraph IV certification notice from Lupin Inc., which seeks approval to manufacture a generic version of Neffy before the expiration of ARS Pharmaceuticals’ patents. Lupin’s notice challenges the validity and enforceability of several U.S. patents held by ARS Pharmaceuticals. These developments reflect significant activity surrounding ARS Pharmaceuticals and its Neffy product in the market.
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