Earnings call transcript: ARS Pharmaceuticals Q3 2025 tops revenue forecasts

ARS Pharmaceuticals (SPRY) reported its Q3 2025 earnings, revealing a revenue of $32.5 million, exceeding forecasts of $28.56 million by 13.8%. Despite a net loss of $0.52 per share, which was below expectations, the company’s stock surged 14.92% in pre-market trading, reflecting investor optimism about its growth prospects and market performance. According to InvestingPro data, SPRY has seen 2 analysts revise their earnings downwards for the upcoming period, suggesting caution despite the revenue beat.

Key Takeaways

• ARS Pharmaceuticals’ revenue exceeded forecasts by 13.8%.
• The company’s stock jumped 14.92% in pre-market trading.
• Neffy, a nasal spray epinephrine auto-injector, showed significant market penetration.
• The company anticipates seasonal sales decline in Q4 but expects growth to resume in 2026.

Company Performance

ARS Pharmaceuticals demonstrated strong performance in Q3 2025, with a significant increase in revenue driven by the success of its flagship product, Neffy. The company reported a 2.5x increase in U.S. net product revenue from Neffy compared to the previous quarter. This performance underscores ARS’s ability to capture new market segments and expand its consumer base.

Financial Highlights

• Revenue: $32.5 million, up from the forecasted $28.56 million.
• Earnings per share: -$0.52, compared to the forecast of -$0.46.
• Cash, cash equivalents, and short-term investments totaled $288.2 million.

Earnings vs. Forecast

ARS Pharmaceuticals’ actual earnings per share of -$0.52 fell short of the forecasted -$0.46, resulting in a 13.04% surprise. However, the revenue beat expectations by 13.8%, indicating strong sales performance.

Market Reaction

Following the earnings announcement, ARS Pharmaceuticals’ stock rose by 14.92% to $9.88 in pre-market trading. This surge reflects positive investor sentiment, likely driven by the company’s robust revenue growth and market expansion efforts. The stock’s current price remains below its 52-week high of $18.9, offering potential room for further growth.

Outlook & Guidance

Looking ahead, ARS Pharmaceuticals expects a seasonal decline in Q4 sales but anticipates a return to quarter-over-quarter growth in 2026. The company is focusing on international expansion and increasing payer coverage to sustain its momentum.

Executive Commentary

CEO Richard Lowenthal stated, "We are building momentum across every dimension of our business," highlighting the company’s strategic initiatives and market penetration. He also emphasized ARS’s mission to transform the management of severe allergic reactions.

Risks and Challenges

• Seasonal sales fluctuations could impact short-term revenue.
• Expanding into international markets involves regulatory and logistical challenges.
• Negotiations with payers like CVS Caremark could affect market access and pricing.

Q&A

During the earnings call, analysts inquired about challenges during the back-to-school season and variations in prescription tracking. The company addressed these concerns, highlighting ongoing negotiations with key payers and the potential of its virtual prescriber program to enhance accessibility.

Full transcript - ARS Pharmaceuticals Inc (SPRY) Q3 2025:

Conference Operator: Good morning and welcome to ARS Pharmaceuticals conference call. At this time, all participants are in a listen-only mode. After the company’s prepared remarks, we will open the line for questions. Please be advised that today’s conference is being recorded. I’ll now turn the call over to Justin Chakma, Chief Business Officer. Please go ahead.

Justin Chakma, Chief Business Officer, ARS Pharmaceuticals: Good morning and thank you for joining our third quarter 2025 earnings conference call. With me on the call are Richard Lowenthal, our Co-founder, President, and CEO; Eric Karas, our Chief Commercial Officer; and Kathy Scott, our CFO. This morning, we issued a press release detailing our financial results and commercial highlights. That press release and the slide presentation, which we’ll refer to today during today’s call, are available in the investors’ and media section of our website at ars-pharma.com. Before we begin, please note that today’s remarks and slide presentation may contain forward-looking statements. Actual results may differ materially. Please refer to our press release and SEC filings for further risk disclosures. With that, I’ll turn the call over to Rich.

Richard Lowenthal, Co-founder, President, and CEO, ARS Pharmaceuticals: Thank you, Justin. Good morning, everybody, and thank you for joining us to discuss what has been a pivotal quarter for ARS Pharmaceuticals, driven by the continued momentum of neffy in the U.S. and around the world. Third quarter marks a true inflection point for our business. As you can see on slide three, U.S. net product revenue for neffy grew again quarter over quarter, reaching $31.3 million in Q3, representing a 2.5-fold increase from the prior quarter and exceeding consensus expectations of $28.3 million. This change reflects a strong growth in new patient starts and overall demand for neffy. Surveys among neffy users indicate that we can expect durable utilization and reoccurring refill behavior, trends that we expect will continue to build as both coverage and awareness expand. These results show that our multifaceted commercial strategy is delivering results.

Later this month, our first analysis of real-world treatment outcomes from the neffy Experience Program will be published in the Annals of Allergy, Asthma, and Immunology, with a total of 554 patients treated. Findings show that about 9 out of 10 patients experiencing anaphylaxis were effectively treated with a single dose of neffy, which is consistent with outcomes for epinephrine injections, where either IM injection or EpiPen require a second dose approximately 10% of the time to resolve the event. Updated results in 680 patients were highlighted in an oral presentation at ACAAI and reinforced that neffy delivers equivalent outcomes to injection products in real-world use. On top of a series of case reports also presented at ACAAI by independent physicians, we expect additional peer-reviewed publications in 2026 that will further validate neffy’s clinical experience with injection products.

Before Eric reviews our commercialization details, there are two important topics I want to touch on today. First, why neffy’s revenue trajectory isn’t accurately reflected in IQVIA script data. Second, what we’ve learned from recent market dynamics, including back-to-school seasonality. Starting with IQVIA, as we’ve noted before, the weekly IQVIA rapid data, which are generally available on a paid subscription basis, provide a directional view of prescription activity but are not completely accurate and reliable measures of neffy’s true performance or market share. IQVIA data sets often exclude a number of channels that are central to our business, including certain retail, mail order, and specialty pharma volumes, as well as bulk purchases by institutions and clinics that buy directly through wholesalers. These additional sales are not accurately captured by IQVIA and are variable from week to week and thus cannot be predicted.

Turning to market dynamics, during the back-to-school season, allergists and pediatricians experience a huge surge in patients’ visits, including checkups and sports physicals. That higher patient volume means that HCPs have significantly less time per an appointment, typically just five to seven minutes per patient, leaving little to no opportunity to discuss new treatment options or changing prescriptions. That challenge is even greater for patients who still need prior authorizations. As a result, in the second half of Q3, we saw a temporary pause in market share growth. Importantly, though, we view this as a one-time event. Looking ahead to Q4, market share growth has resumed, although we anticipate Q4 sales will decrease from Q3 given the overall epinephrine market typically declines about one-third due to seasonality and the holidays.

As we move into 2026, we expect to return to quarter-over-quarter growth as both market share and overall prescription volumes rise in parallel. To further drive adoption and accessibility, we recently launched our new Get neffy on Us program at the getneffy.com website. This is an important initiative designed to help patients switch to neffy year-round with a hassle-free virtual prescriber interaction at no cost to patients if covered by insurance. This program is anticipated to help accelerate sales growth year-round and circumvent the hectic back-to-school season. Eric will share more details, but this program removes much of the patient and physician burden in prescribing neffy by shifting the prescription, prior authorizations if needed, and patient training to our virtual physician system. Once patients are on neffy, physicians can more easily manage refills electronically, or patients can return to getneffy.com to get additional renewal prescriptions.

Together with our broader DTC campaign, this initiative makes it simpler than ever for patients to experience the benefits of neffy and represents a key driver of long-term adoption. In fact, we already have proof of what hassle-free prescribing can do for neffy sales. Neffy was launched in Germany in late June, where there is a more seamless prescribing experience without additional HCP paperwork. The slope of the market share capture in just the first few months has been three times higher than what we’ve seen in the U.S., showing just how impactful growth can be when administrative burdens are not a barrier. This is also a strong signal for our global growth trajectory. Neffy received approval in Japan in September, with launch anticipated to start in the fourth quarter of 2025.

We expect approvals in Canada by the first quarter of 2026, with launch expected in the first half of 2026, and we expect approval in China in the first half of 2026. We expect that as these launches begin, they will start to contribute to the total revenue and cash proceeds in the second half of next year as distribution scales across partner regions. On the clinical front, enrollment is ongoing in our phase 2B Urticarid trial, and we are on track for top-line data in the middle of 2026. This indication represents a major label expansion opportunity in a 2 million patient market in the United States. Early market research with allergists supports that our nasal spray product, if approved, could be prescribed to more than 60% of all of their CSU patients, irrespective of whether those patients are on antihistamine, biologics, or a combination therapy.

Finally, in September, we secured an up to $250 million term loan facility, from which we drew down $100 million initially. Strategically, we chose this structure in partnership with our largest shareholder over other capital vehicles to increase commercial investment and further strengthen our balance sheet without dilution. This reflects our confidence and that of our investors in neffy’s durable cash flow profile and long-term potential. Our planned investments are geared towards expanding the current market and improving adherence and refill rates, reengaging lapsed patients and activating untreated patients, as well as converting the current $2 billion annual U.S. epinephrine market at neffy’s net price. With this financing, we ended Q3 with approximately $288 million in cash equivalents and short-term investments, giving us even more flexibility to support our evolving commercial initiatives.

In summary, we’re building momentum across every dimension of our business, from revenue growth and market share growth to access, real-world evidence, and global expansion, all while maintaining a strong balance sheet. I’ll now turn it over to Eric to provide more detail on our U.S. commercial performance.

Eric Karas, Chief Commercial Officer, ARS Pharmaceuticals: Thanks, Rich. The fundamentals of our commercial execution continue to strengthen, and I’m pleased to share how our strategy is translating into tangible results. Starting with revenue drivers, our $31.3 million in U.S. net product revenue reflects not only traditional retail pharmacy prescriptions captured in IQVIA data, but also institutional sales to universities and colleges, as well as retail orders from clinics and hospital networks. This quarter, we’ve observed modest improvements in gross-to-net retention, with cash prescriptions decreasing from about 20% to approximately 12% of total volume. By offering cash prescriptions through BlinkRx and other directly managed programs and optimizing our copay buy-down program at the point of sale, we’ve gained greater control, which led to favorable gross-to-net performance and improved profitability. Our DTC campaign is also delivering meaningful engagement, as seen on slide four.

Consumer awareness has climbed from 20% pre-campaign to 56% as of September, and intent to get neffy remains high. Approximately 80% of surveyed patients say they are very likely or extremely likely to ask their healthcare provider about neffy after learning about it. The early lift from the campaign aligns with benchmarks for commercially sensitive brands, and we believe it will continue to improve as awareness grows. To accelerate greater adoption, we’re excited to introduce our Get neffy on Us initiative, which is part of our direct-to-consumer campaign. As outlined in slide five, this program was designed to simplify access to neffy. Patients can schedule a quick virtual visit with a prescriber to get started. Once prescribed, neffy can be shipped directly to their home or picked up at the pharmacy of their choice, typically with a zero copay for most commercially insured patients.

Importantly, patients are not required to wait for their current autoinjector prescription to expire. They can transition to neffy immediately without the need of an additional appointment with their HCP. By minimizing hassle, assisting with coverage and the prior authorization, and enabling straightforward auto refills, this program makes it easier than ever for patients to choose neffy and stay protected. We’ve incorporated the Get neffy on Us program into all of our DTC materials, and early survey feedback shows that a majority of patients are open to using the virtual prescriber option. We believe this initiative will encourage consistent prescription switches throughout the year, extending beyond the usual back-to-school period and maintaining growth even during traditionally low-volume months. We are also seeing meaningful expansion in reach and adoption.

Turning to slide six, to date, over 18,000 healthcare providers have prescribed neffy, an 85% increase since August of this year, with 81% of prescriptions coming from top decile 7-10 prescribers. Market share amongst new prescribers is at 10.3%, outpacing existing ones with the same call frequency, signaling faster uptake as new doctors benefit from refined messaging, an easier prescribing experience, and growing real-world evidence. These operational improvements are driving momentum and scaling our efforts. On the pediatric front, our ALK co-promotion has efficiently extended our reach to approximately 9,000 pediatricians, where our market share continues to grow. In addition, approximately 6,500 schools have opted into our neffy in schools program, providing access to emergency doses at no cost. Perhaps most importantly, we’re seeing early signs that neffy is expanding the overall epinephrine market, not just taking share. We’re reaching new patient segments.

As seen on slide seven, amongst patients prescribed neffy, approximately 19% were lapsed patients who had stopped filling prescriptions, and 7% had never filled at all despite being diagnosed. These patients who stayed away primarily due to needle anxiety or device complexity. In total, about a quarter of patients prescribed neffy are from these new segments. As summarized in slide eight, patient satisfaction is remarkably high. 87% of neffy patients report a positive impact on their daily and social lives. 95% say they’re likely to refill the prescription compared to actual refill rates of around 30% for needle injectors. The current epinephrine market is valued at $2 billion annually at neffy’s net price, growing at 6-8% organically prior to neffy’s entry and branded promotion. This year, we’ve seen year-over-year growth at 9% and year-to-date growth at 8%.

As both neffy captures share and expands the market through improved refill rates, new patient adoption, and higher devices per patient, the opportunity is significant. In summary, our U.S. launch execution is progressing well, and we are gaining momentum. We are excited about the ongoing investment in direct-to-consumer initiatives, the launch of the Get neffy on Us program, discussions with payers, and our efforts in the field to increase market share amongst targeted HCPs. We look forward to driving growth, and our commercial infrastructure is optimized to scale sales rapidly through 2026. I’ll now turn it over to Kathy to discuss our financials.

Kathy Scott, CFO, ARS Pharmaceuticals: Thank you, Eric. We continue to maintain a strong financial position while investing significantly in the commercial growth of neffy. Looking at our third quarter 2025 financial results on slide nine, starting with revenue, we recorded total revenue of $32.5 million. As we’ve discussed, it’s important to look at U.S. net product revenue separately from collaboration and supply revenue. Our U.S. net product revenue from neffy in Q3 was $31.3 million, representing a near 2.5-fold increase from the prior quarter. We recognized $1.1 million in supply revenue from partners during the quarter. We also earned royalties of $0.1 million from ALK related to the launch of neffy in Germany. In accordance with GAAP, these royalties were recorded to the financing liability on the balance sheet rather than our P&L.

Turning to our operating expenses, R&D expenses for the third quarter were $2.8 million, primarily related to our ongoing phase 2B Urticarid trial and continued development expenses for neffy. SG&A expenses were $74.8 million, reflecting our ongoing investment in our national DTC campaign and sales and marketing efforts. While SG&A spend increased with DTC expansion, these are deliberate investments designed to drive durable share growth with spend efficiency improving quarter over quarter. We remain committed to making substantial investments in neffy to ensure both short and long-term market share capture and brand awareness. Our gross-to-net retention in the third quarter was modestly higher than in the second quarter due to certain channel dynamics. Looking ahead, we expect gross-to-net retention to remain in the low to mid 50% range, even with the reduced $0 copay program.

Net loss for the third quarter of 2025 was $51.2 million or $0.52 per share. Lastly, as of September 30, 2025, we had cash, cash equivalents, and short-term investments of $288.2 million. In September, we secured a senior secured term loan facility with RA Capital, our largest shareholder, and Ono Pharmaceutical of up to $250 million. We drew an initial $100 million from this facility, which will be used primarily to accelerate neffy’s commercial growth. The funding will also support our marketing and medical affairs initiatives to generate and disseminate real-world evidence about neffy’s effectiveness. This financing provides several strategic advantages. First, it’s an attractive cost of capital at SOFR plus 5.5%, with interest-only payments through September 2030, zero dilution, and terms similar to recent commercial stage deals such as Verona Pharma. Second, it comes from high-quality investors who understand our business and are aligned as long-term partners.

Third, it maximizes our flexibility for commercial initiatives, including DTC campaigns and real-world evidence generation. Our current cash position is expected to be sufficient to achieve cash flow breakeven without additional equity financing, while maintaining the resources needed to fully capitalize on the U.S. commercial opportunity for neffy and benefit from the continued U.S. growth and expanding international revenue. With that, I’ll pass the call back to Rich.

Richard Lowenthal, Co-founder, President, and CEO, ARS Pharmaceuticals: Thanks, Kathy. As we look ahead, we remain laser-focused on our key priorities. First, sustaining and accelerating neffy U.S. market share growth through the fourth quarter and into 2026. Second, enabling neffy global expansion through launches in multiple geographies across our partner network. And finally, advancing our clinical stage Urticarid program towards a potential label expansion. Our momentum continues to build across every dimension of our business, and we are confident in our path towards long-term growth and profitability. Most importantly, we’re executing our mission of transforming how severe allergic reactions are managed and fundamentally impacting the lives of patients, families, and caregivers. Thank you for your continued support, operator. Please open the line for questions.

Conference Operator: Thank you. We’ll now begin the Q&A session. If you’d like to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Lachlan Hanbury-Brown with William Blair.

Lachlan Hanbury-Brown, Analyst, William Blair: Hey, guys. Thanks for the question, and congrats on the quarter. I guess, yeah, first question is maybe just I know there were obviously some high expectations in Q3, and would be curious to hear how these results sort of stack up to your internal expectations heading into the quarter.

Richard Lowenthal, Co-founder, President, and CEO, ARS Pharmaceuticals: Hello.

Kathy Scott, CFO, ARS Pharmaceuticals: Rich and team, can you please come off mute?

Conference Operator: Please remain on the line. We apologize for the technical difficulties. Lachlan, you are back on. Please restate your question.

Lachlan Hanbury-Brown, Analyst, William Blair: Awesome, Peg. I thought the first question was just, yeah, I know there were some high expectations heading into Q3 with the back-to-school season. I was curious to hear how this performance sort of stacked up to your own internal expectations. Yeah.

Richard Lowenthal, Co-founder, President, and CEO, ARS Pharmaceuticals: Yeah, Lachlan, this is Richard Lowenthal. I think the performance we’ve reported obviously was better than analysts’ expectations, and we met our expectations. I mean, we’ve spoken a little bit about the difficulties over the summer and doctors’ burden and why we are shifting a lot of our attention towards our Get neffy on Us program, which physicians right now are giving us feedback that they’re very, very positive about this approach. We obviously would have liked to have seen a better performance over the summer, but I think it met our expectations, and I think we learned and adjusted very quickly to avoid the issue of the doctor burden problem that we experienced.

Eric Karas, Chief Commercial Officer, ARS Pharmaceuticals: I would just add too, as we stated in the prepared remarks, I mean, the growth of new prescribers and prescribers overall has been strong in Q3 and throughout the summer. As I mentioned also, what we’re seeing with that group of doctors too, with, I think, just really focused messaging, the real-world data, and then some of the programs that we put in place is a higher share. That is very encouraging. The increase that the consumer awareness with our DTC campaign continued to grow through the summer months.

Lachlan Hanbury-Brown, Analyst, William Blair: Yeah, so maybe on that point about the higher share in the newer prescribers, is that a higher share at a certain time after writing their first script or just an overall higher share among them than the original prescribers? If so, maybe why are the initiatives that are getting higher share in the new prescribers not driving further share growth in the prior prescribers at the same rate?

Eric Karas, Chief Commercial Officer, ARS Pharmaceuticals: Rich, I can take—do you want to take that one?

Richard Lowenthal, Co-founder, President, and CEO, ARS Pharmaceuticals: No, no, you can take it.

Eric Karas, Chief Commercial Officer, ARS Pharmaceuticals: I think, as I mentioned, the focus on kind of tighter messaging in terms of the unmet need and not only the attributes of needle-free, but the totality of what neffy offers continues to drive adoption and writing. I think, as Rich said, the volume of overall patients and kind of our core went up quite a bit in the summer. That is one of the reasons why, again, the neffy on Us program was designed to really help the offices and help the patients. I mean, if you look at our allergists, for example, our top, top 4,000, I mean, the share is higher than the average. I think we are seeing that kind of across the board where we have good focus, reach and frequency, a tighter message, really focused market access messaging too.

Our sales team is able to kind of see within a doctor’s patient base the specifics around where neffy is covered without a PA. Really kind of sharing and educating those best practices has really kind of helped us with adoption that we see kind of with those physicians that I mentioned.

Richard Lowenthal, Co-founder, President, and CEO, ARS Pharmaceuticals: Lachlan, let me just correct one thing because I think what you stated is not really the correct perception. The doctors that are prescribing neffy at the higher tiers continue to expand their use. Their market share continues to go up. We also expand the number of prescribers, but new prescribers tend to be trialing, right? New prescribers tend to be coming in. They try out neffy with some of their patients, and once they have positive experience and they’re comfortable, they start then expanding. While we’re seeing a good growth of new prescribers, those prescribers are not adding a lot to our market share. I do not want you to think that existing prescribers are decreasing. They’re actually increasing. When we look at our existing prescribers, they are increasing in market share.

The only reason that market share kind of took a dip over the summer is because the volumes get so large, and a large percentage of that volume is renewal prescriptions, which are virtual. They are not even going to see the doctor. If we could look at just prescriptions that were at a doctor’s office, I think we would have had a much higher market share of those prescriptions. You have a lot of virtual renewals going on before school starts. We will take advantage of that next year. This year, obviously, we do not have renewals of neffy yet on an annual basis. Starting next year, we will start to see the benefit of that virtual prescribing.

Lachlan Hanbury-Brown, Analyst, William Blair: All right. Thanks. Maybe final one from me. The institutional sales point you made was an interesting one. Can you just elaborate on maybe how much volume went through that channel, what the economics are like, how big that opportunity is, what you’re doing to capture that beyond the traditional retail setting?

Richard Lowenthal, Co-founder, President, and CEO, ARS Pharmaceuticals: Yeah. We’re not going to elaborate on that today because it’s inconsistent, obviously. We are just starting up formal marketing efforts in that area. We are now shifting some of our attention to market directly to institutional buyers and also to provide both discounts and other incentives to them to start boosting those sales going forward. It’s not consistent enough yet for us to give you any kind of guidance, Lachlan. We’d rather not give too much detail on that at this point.

Lachlan Hanbury-Brown, Analyst, William Blair: Yeah. Makes sense. Thanks for the questions.

Conference Operator: Our next question comes from Josh Schimmer with Cantor.

Josh Schimmer, Analyst, Cantor: Thanks, Ryan. Taking the questions. Apologies if I missed this in the prepared remarks. What % of covered lives now require some form of prior auth? What trends are you seeing there? For the online prescribing option, what is being done to raise awareness of patients that that is available to them? Thanks.

Richard Lowenthal, Co-founder, President, and CEO, ARS Pharmaceuticals: Yeah. I’ll take the latter part and then let Eric answer the part about the prior authorization and % of prior authorizations. I think we are advertising already. We’ve started to incorporate the new program into our DTC. You will also shortly see new TV commercials, which use the same theme, same background, same theme, but different voiceover and banners in order to make it very clear to customers that we now have this virtual prescriber option, that it’s no cost to the patient or caregiver. Again, with commercial insurance, it’s zero copay. I think that is rolling out. I mean, I think virtual ads are already updated. Also, we sent out, obviously, an email blast to everybody on our email list that has been on neffy.com.

Several of the large advocacy groups have put this out on their email list that ARS has now got the promotion going and is paying for a virtual prescriber if they want to skip the hassle of a physician visit and also that they can get a zero copay now. They can get multiple packs with zero cost. It is more than just one box. It is multiple boxes they can get, whatever their insurer will tolerate. Just so you know, on that front, almost all insurers will tolerate two boxes in one prescription. Some will accept two packs in one prescription. We are defaulting to two packs in the virtual prescriber prescription. Eric, you want to talk about PAs?

Eric Karas, Chief Commercial Officer, ARS Pharmaceuticals: Yeah. Good morning, Josh. Thanks for the questions. Overall, when you look at the PA required, and this is through kind of commercial, Medicaid, and Medicare, it’s about 50%. That number has come down as we’ve also shared too. Specifically within commercial, about 57% of prescriptions, patients don’t require a PA.

Josh Schimmer, Analyst, Cantor: Okay. Thank you.

Conference Operator: Our next question comes from Roanna Ruiz with Lyrinx Partners.

Roanna Ruiz, Analyst, Lyrinx Partners: Great. Good morning, everyone. A couple from me. Could you talk about the inventory levels for neffy in the quarter and how we should think about it exiting for Q? Secondly, I also noticed you talked a bit about IQVIA being a bit off in tracking neffy prescriptions. Could you give us a little more detail about what portion of the scripts are flowing through IQVIA versus LinkRx and other channels?

Richard Lowenthal, Co-founder, President, and CEO, ARS Pharmaceuticals: Yeah. Let me speak to that first, and then Eric can add on to it. I think the inventory levels that the distributors are maintaining tend to be between 15-20 days. It fluctuates, obviously, from week to week and period to period. They do build inventory for peak periods. What would be normal is that they’re going to reduce down their inventory as the market drops in fourth quarter. As we said, that’s part of the reason why we expect that the overall sales in fourth quarter, although we believe we’ll do very well, will come down from the third quarter. Part of that is driven by inventory adjustments as well. That dynamic is fairly normal, but again, this is a product with some seasonality to it. The distributors are well aware of that.

They do adjust their inventory according to that seasonality. They seem to be trying to maintain their inventory between 15 and 20 days on hand. Eric, do you want to speak to the other part of that?

Eric Karas, Chief Commercial Officer, ARS Pharmaceuticals: Yeah. I think, Roanna, good morning. Thanks for the questions. When you look at kind of the distribution of the prescriptions being filled, it’s slightly higher kind of on the retail side. I think as we kind of transitioned more where we had higher coverage and so forth, doctors started sending patients directly to kind of the local pharmacies because it was something easier for the patient to kind of pick it up and get it right away. It’s probably about 55% to 45%. As Rich mentioned, and we mentioned, some of the inaccuracies of capture rates and some of the other channels that we’re selling medication to is not necessarily tracked in the IQVIA data overall.

Richard Lowenthal, Co-founder, President, and CEO, ARS Pharmaceuticals: Yeah. It’s very inconsistent, Roanna. We can see that from week to week or period to period, it’s not very consistent what IQVIA is capturing.

Roanna Ruiz, Analyst, Lyrinx Partners: Yep. Makes sense. Thanks a lot.

Conference Operator: Our next question comes from Andreas Argyrides with Oppenheimer.

Richard Lowenthal, Co-founder, President, and CEO, ARS Pharmaceuticals: Hey, good morning, guys. Thanks for taking our questions. Congrats on the solid quarter here. A couple from us. There was a previous question around prior authorizations. Maybe what are some of the gating factors in reaching unrestricted access? What are your timelines to add, let’s say, CVS Caremark, etc., being a bigger formulary than 26? How do you anticipate those improvements contributing to growth next year? I got one or two follow-ups.

Yeah. So Andreas, I’ll start out with an answer on that. We continue to work, obviously, with CVS Caremark. We do have some new proposal in with them. We are very optimistic. What the timing of that is, we cannot be sure of right now. We believe that it will be in the first half of next year that they will put it on formulary with preferred status. We are also working with them to possibly remove the PA requirement even as non-preferred sooner than that. We cannot really promise because CVS is not consistent in their behavior. We know that in the past, when we had an agreement with CVS, they did not follow through with that. We are working with them. They seem to be working with us. CVS Caremark certainly is very, very positive.

We have to just wait until we get through that. We do have a new proposal in with them, and we are talking fairly regularly with Zinc and CVS groups. On the other side, we also are working with Prime and other Blue Cross companies. That is the other piece that we are focused on. We are making progress in that regard as well. Also with Anthem, which kind of follows Caremark but is independent of Caremark.

What do you think? I mean, what do you think some of the considerations that these payers look at when they decide to make their decisions? What are some of the data points that you guys are bringing to their attention?

Yeah. They see the market growth. I think they understand the medical value. At least most companies understand the medical value of neffy. I think it’s just a matter of, and it’s a little different for different companies. I think with CVS, there’s a little bit different focus on the revenue that they would generate. For the Blue Cross companies, I think it’s just managing their premiums and managing their cost. They tend to be delaying coverage for that reason, even if they recognize the medical value. There is a handful of companies that are just not covering for other reasons. It tends to be just managing their costs, and we need to work through that with them.

Okay. Great. I know you guys aren’t necessarily giving guidance here, but just given the strong momentum in Q3, how are you thinking about Q4 sales and then growth into next year? Thanks.

Yeah. As we said, I mean, Q4 will probably be less than Q3. I think that’s anticipated to some extent, even in the analyst estimates. We will continue to grow market share. Again, depending on how well, again, neffy and our program does and how much business that drives will probably dictate whether we are well above consensus or not. I think that that program, hopefully, will solve some of the headwinds that we have been seeing. If we can make more progress on access, but that will probably be in the first or second quarter of next year, that will certainly also add to the momentum at that point.

Okay. Great. Thanks for taking my questions. Congrats on the quarter again. Thanks.

All right. Great. Nice to talk to you.

Conference Operator: Our next question comes from Kevin Holder with Roth Capital Partners.

Eric Karas, Chief Commercial Officer, ARS Pharmaceuticals: Good morning. Thanks for taking our questions. First one for me, I know you launched in the U.K. with ALK a few weeks ago. Just some commentary on the adoption there. Is it tracking more towards the growth trajectory in Germany or closer to the growth trajectory in the U.S.? I know a little bit early stages there, but just some commentary would be helpful. Thank you.

Richard Lowenthal, Co-founder, President, and CEO, ARS Pharmaceuticals: Yes. Yeah, it’s a little early to say. It’s a little early to say, but what I can tell you is that I think the U.K. physicians and patients’ caregivers are very excited about neffy. I think we expect a very good performance. Again, they have a more seamless reimbursement process than the U.S. We know that they get fairly well covered very quickly, or they are already being well covered. We do expect adoption. I would expect, at least at this stage, again, too early to be sure, but I would expect adoption to be more like Germany, more because of the very rapid access that they get in those countries.

Eric Karas, Chief Commercial Officer, ARS Pharmaceuticals: Thank you. That’s very helpful. Then just one last one for me. I think in the slide deck, you show that you’re targeting 9,000 pediatricians with the ALK U.S. Salesforce. Kind of what is your progress there thus far in kind of trading that market?

Richard Lowenthal, Co-founder, President, and CEO, ARS Pharmaceuticals: Eric, do you want to speak to that?

Eric Karas, Chief Commercial Officer, ARS Pharmaceuticals: Yes. Hey, good morning. Yeah. We’re seeing a nice increase through the summer months when that team went into the field of share. So we tracked a couple of things in terms of overall volume, new prescribers, and that is progressing nicely. Obviously, we want to kind of see that continue growing at a pace here in Q4 as well. We are pleased to get to overall about 20,000 physicians. We are hitting all of those big allergists, the SLs 8-10, but then we have been able to expand to about another 9,000 pediatricians that also see patients that need epinephrine. Great. Thank you very much, and congrats on the quarter.

Conference Operator: Our next question comes from Ryan Deschner with Raymond James.

Justin Chakma, Chief Business Officer, ARS Pharmaceuticals: Hi. This is Anthony on for Ryan. Thank you for taking our question and congrats on the quarter. We wanted to know, how are you thinking about the impact of the virtual prescriber program over the next several months? What patient demographics do you think will have the biggest impact from this program?

Richard Lowenthal, Co-founder, President, and CEO, ARS Pharmaceuticals: Yeah. I’ll start out, and Eric can add to what I say. We are very excited about this program. We’ve had a virtual prescriber option on our website, but it wasn’t very well utilized only because of the fee and because of us not promoting it, right? We were not advertising it. Again, the feedback I got, I was just at the American College of Asthma Allergy and Immunology, is that the doctors are actually looking at this as a really positive thing. I mean, doctors, allergists especially, are exceptionally busy. They’re under a lot of pressure to see as many patients as they can. The time it takes to counsel patients on a new drug and switch them takes up a lot of their time.

By introducing this program not only to the patients and caregivers, but to the doctors, the doctors are coming back with a very positive attitude towards it that they can actually talk to their patient and then switch them over to getneffy.com, and we would take care of the rest. We would take care of the prescription, a PA if necessary, training, everything for the patient so that that burden is removed from the doctor. On top of that, patients and caregivers will now have the opportunity to get neffy without a waiting time. Typical waiting time to see an allergist is three to six months. They do not need to travel down to the doctor’s office and sit in the doctor’s office. It is fairly quick.

There’s also probably less dropout because you’re going to have a very quick interaction virtually, and then the prescription goes to the pharmacy or gets filled through the mail order system. It’s going to go really, really quick. Less chance of a patient deciding that they change their mind or do not want to go to the doctor, cancel the appointment for other various reasons, life reasons. We expect it to have some meaningful impact. I mean, how much impact, we can’t tell you. I think the positive response of the doctors we’re getting has been very reassuring because they see it as a way for them to switch their patients without having to take up too much of their time. I think that’s an important aspect in today’s world when they’re under pressure to see just one more patient each day.

Eric, do you want to add anything?

Eric Karas, Chief Commercial Officer, ARS Pharmaceuticals: Yeah. I mean, a couple of points to build on what Rich mentioned. As Rich said, we were just at the college conference. Even before the conference started, we did an advisory board with about 12 physicians. One of the things that we went through is this program, and the response was very positive. We will see how, obviously, we’re watching really closely. As we mentioned earlier, too, making sure we’re promoting this through our DTC efforts as well. We’ve also done market research specifically with caregivers, parents, and patients. As Rich mentioned, they see this as time savings, making the product really easy to get, the ease of use, the cost aspect of not having to pay lower copay.

Just over the product overall, I mean, when you start thinking about the unmet need and the patients kind of see this again, needle-free, the temperature excursions, the simplicity, ease of use, the feedback that we’re getting again from across patients and parents about this program has been positive.

Justin Chakma, Chief Business Officer, ARS Pharmaceuticals: All right. Thank you very much.

Conference Operator: That concludes today’s question and answer session. This will conclude today’s conference call. Thank you for participating. You may now disconnect.

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