Good morning and welcome to ARS Pharmaceuticals' Conference Call. At this time, all participants are in listen-only mode. After the company's prepared remarks, we will open the lines for questions. Please be advised that today's conference is being recorded. I would now turn the call over to Justin Chakma, Chief Business Officer. Please proceed.

Good morning and thank you for joining our first quarter 2025 earnings conference call. This morning, we issued a press release detailing our financial results and commercial highlights, which is available in the Investor and Media section of our website at ars-pharma.com. With me on the call are Richard Lowenthal, our Co-Founder, President and CEO, who will review recent corporate updates and achievements; Eric Karas, our Chief Commercial Officer, who will cover our commercial activities and progress; and Kathy Scott, our CFO, who will provide a summary of our financial results and cash position. Before we begin, please note that today's remarks 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.

Thank you, Justin. Good morning, and thank you all for joining us on this call. We're off to a strong start in 2025 as we continue to execute the nationwide launch of neffy, the first and only needle-free epinephrine treatment approved for type 1 allergic reactions, including anaphylaxis. We believe neffy has blockbuster potential, addressing a U.S. market potential of $3 billion net sales in the near-term, comprised of about 6.5 million patients who have been prescribed epinephrine over the past three years. Beyond this, an additional 13.5 million diagnosed patients have no epinephrine prescription and many struggle with needle anxiety and portability concerns. Only 3.2 million patients actually fill their epinephrine auto-injector prescriptions, underscoring the substantial unmet medical need that neffy is uniquely positioned to solve. With only two quarters of commercialization so far, neffy is gaining traction as a potential new standard of care in this space. In the first quarter of 2025, neffy generated $7.8 million in U.S. net product revenue, reflecting the continuously growing demand among physicians, patients, and caregivers for an alternative to traditional auto-injectors. We started this year with 27% commercial insurance coverage and now have reached 57% coverage with more payer discussions ongoing. We are entering the peak epinephrine prescribing season during the summer with strong momentum. And with additional health insurance coverage anticipated in the coming months, we also expect to generate additional demand through our DTC consumer awareness campaign that launches tomorrow. This demand is supported by the real-world evidence of adoption by thousands of health care providers who have prescribed neffy already. In addition, thousands more have participated in our neffy Experience Program using neffy during oral food challenges and immunotherapy treatments in the clinic. This month, we also reached a major milestone in addition to our 2-milligram dose for children and adults weighing 30 kilograms or greater, neffy 1-milligram was approved by the FDA in early March of this year and is now available at pharmacies across the U.S. for children weighing between 15 and 30 kilograms. The availability of this pediatric dose is particularly important as the 1-milligram dose represents 23% of all epinephrine units dispensed in 2024 and more than half of all epinephrine prescriptions for children. Neffy offers caregivers and young patients a reliable and easy-to-use option, and we ensured that it was available before summer travel, camps, and back-to-school preparations. To further strengthen our commercial reach, including to key pediatricians, we recently expanded our strategic collaboration with ALK-Abelló, a global leader in allergy care ahead of this peak summer prescribing season. This co-promotion agreement expands our direct promotional network for neffy to over 20,000 health care providers across the United States, including targeted outreach to approximately 9,000 pediatricians, accelerating our efforts to position neffy as the leading epinephrine option for both adults and children. This partnership builds on our broader global relationship with ALK. Under this agreement, ARS will continue to focus on allergists and the highest volume pediatricians and PCPs in the United States and retains full control over all aspects of U.S. commercialization, including marketing, medical affairs, market access, production, and distribution. Lastly, regulatory reviews are underway for neffy in the U.K., Canada, Japan, China, and Australia, with decisions and commercial launches in these countries expected to begin in mid-2025 through the first half of 2026. To summarize, this is a year of execution for ARS. We aim to deepen physician engagement, expand access, and lay the groundwork for a global commercial footprint for neffy supported by our partners. I'll turn the call over to Eric for a more detailed review of our commercial progress.

Thanks, Rich. Our commercial strategy is built on three key pillars; driving health care provider adoption, securing market access, and increasing patient awareness. Since launch, our sales team has directly engaged over 10,000 health care providers. More than 50% of these providers have prescribed neffy. Of the prescriptions submitted to-date, nearly 90% have come from top decile targets. We view this as a strong endorsement from leading experts who treat the highest number of patients at risk for allergic reactions. Approximately 2,500 health care providers have also enrolled in our neffy Experience Program and over 13,000 units have been placed in offices for use during anaphylactic events. This hands-on experience has led to numerous physician testimonials that highlight the positive impact neffy is having in clinical practice. With the recent availability of the 1-milligram dose, we will be adding it to our neffy Experience Program, and we'll collect additional information on both the 1-milligram and 2-milligram doses. We plan to share the physician survey data from our neffy Experience Program in various medical forums later this year. As Rich mentioned, we continue to make progress in payer access. We have secured commercial coverage across more than 30 formulary platforms, now including UnitedHealthcare. Currently, over 57% of all U.S. commercial lives have access to neffy. We are approaching a tipping point in market access that will enable more health care providers to prescribe neffy without restrictions. In the coming months, as patients schedule appointments and visit their allergy care providers, we anticipate that access to neffy will become quicker and easier. For patients within commercial insurance, our assistance program ensures that most individuals will only have a $25 co-pay, which is less than the typical $40 for a generic injector. We are making it easier for patients as the co-pay support is now automatically applied at the point of sale in retail pharmacies. Additionally, for eligible patients who are uninsured or underinsured, we provide neffy at no cost through our patient assistance program. These programs reflect our commitment to ensure that all patients at risk of an allergic reaction have access to this potentially life-saving treatment. As we turn to the third pillar of our commercial strategy, patient awareness, we are excited to announce the launch of a broad and comprehensive direct-to-consumer campaign that will redefine the epinephrine landscape and establish neffy as a household name. Our campaign titled Hello neffy, Goodbye Needles will debut tomorrow. We are utilizing a multichannel strategy to reach patients, parents, and caregivers where they are, including connected TV, broadcast, social media platforms, health-related websites, prints, pharmacies, and point-of-care settings. Our data-driven media plan aims to engage high-value audiences during key seasonal periods such as back-to-school and the availability of our 1-milligram dose. We expect to reach 95% of severe allergy patients and their caregivers. Our investment is essential for achieving our goals of raising awareness and encouraging adoption. Every aspect of this campaign is designed to empower patients and their caregivers to position neffy as a standard of care and drive prescription growth. We believe our DTC campaign could generate significant revenue in the second half of 2025 and beyond, while establishing neffy as a leading brand in severe allergy care. I'll now pass the call over to Kathy to walk through our financials.

Thank you, Eric. The details of our financial results can be found in our earnings press release and 10-Q filing, so I'll provide a summary. For the first quarter of 2025, we recorded total revenue of $8 million. This is comprised of $7.8 million in U.S. net product revenue for neffy, and we expect to see a continued ramp-up in product revenue as our commercial efforts accelerate. In addition, we had $0.2 million in collaboration revenue, which was the recognition of deferred revenue from performance obligations related to our collaboration and license agreement with ALK. Under our new co-promotion agreement with ALK, ARS will continue to recognize all net product revenue in the U.S. and retain full responsibility for commercialization. Neffy will be detailed by ALK sales representatives in primary position for the first 2 years and co-primary position during the last two years of the four-year agreement. Additional terms of our co-promotional agreement can be found in our 8-K and 10-Q filings. In terms of our operating expenses, cost of goods sold for the first quarter was $1.1 million. Our COGS continues to benefit from some inventory that was expensed prior to FDA approval in August 2024. R&D expenses for the first quarter were $3 million, primarily related to clinical expenses and product development. Sales, general, and administrative expenses were $41.1 million for the first quarter, largely tied to personnel, sales, and marketing expenses associated with the commercialization of neffy in the U.S. As Eric noted, we are launching a comprehensive DTC campaign tomorrow, which has a planned investment of $40 million to $50 million for the remainder of 2025. The bulk of this expense will be recognized in our SG&A in the second and third quarters of the year, and we believe we will start seeing the benefits of the DTC campaign starting in Q3 2025. Also, with the planned DTC spend and additional investments in pediatric access and commercialization with our partner, ALK, we project total 2025 operating expenses of between $210 million and $220 million, excluding stock-based compensation and cost of goods sold. The ALK co-promotion agreement adds approximately $8 million in operating expense to the previous guidance for 2025. We believe this is a solid investment in our future growth potential in the pediatric market. ARS' portion of the commercial expenses under the co-promotion agreement with ALK will be recorded as an expense on our P&L for the first year of the agreement but will accrue and not be paid in cash to ALK until the second year of the agreement. Any future performance-based payments to ALK based on achieving certain market share thresholds are expected to be recognized as operating expenses. Lastly, we reported a net loss of $33.9 million or $0.35 per share for the first quarter. Overall, we are well-capitalized today with a disciplined and strategic investment approach to support the commercial execution of neffy, while also advancing development of our nasal epinephrine program in new indications such as urticaria. As of March 31st, 2025, we had cash, cash equivalents, and short-term investments of $275.7 million. We reiterate today that based on our current plans, we have an operating runway of at least three years. With that, I'll pass the call back over to Rich.

Thank you, Kathy. As you've heard, we are executing from a position of strength. We've seen momentum across the board from strong early revenue and formulary wins to physician testimonials and real-world adoption. This reinforces our belief that neffy is a truly transformative product. I am proud of the work our team has done, and I'm grateful to our partners, the medical and advocacy communities, and above all else, the patients and caregivers for their support and enthusiasm. Operator, please open the line for questions.

Thank you. The next question comes from Ryan Deschner with Raymond James. Please go ahead.

Good morning. Thanks for the question. Curious how much of the 1Q sales figure is attributed to inventory and how you're thinking about inventory over the next few quarters going into peak epinephrine season as well as following it? And I have a follow-up.

Yes. Hi, this is Rich Lowenthal, Ryan. How are you? Our first quarter numbers were very little influenced by inventory. We're seeing fairly steady inventories at this point, and it was prior to the 1-milligram being launched. So, this was all 2-milligram sales, of course. But we don't think it had much influence on the sales this quarter.

Got it. And what would the gross to net discount look like in the first quarter? How meaningful was that change from fourth quarter to first quarter?

Kathy can give you the full details. But as expected, the gross to net will slowly come down towards the 50% mark. We're seeing a good uptake of insurance coverage and fewer cash sales, and that will obviously bring down our gross to net when we get better insurance coverage. But Kathy, do you want to speak to the gross to net in this quarter?

Sure. Good morning, Ryan. Yes, Q4 had a higher gross to net ratio compared to Q1. As Rich mentioned, our payer coverage is improving. We were around 60% for Q1, but we expect that to decrease to about 50% as we move into 2025.

Thanks Kathy, thanks Rich.

Thank you so much. One moment for our next question and it comes from the line of Josh Schimmer with Cantor. Please proceed.

Thanks for taking the questions. Just a couple of quick ones. First, when you've worked through the inventory on hand, what do you expect cost of goods to settle out at? And then for the, I think, 50% of commercial lives that have access, can you confirm that there are no prior auth requirements for access to neffy for them?

Sorry, can you repeat the second question, Josh?

The update was over 50% of commercial lives have access to neffy. Just want to make sure that there are no prior auth requirements for those patients.

Currently, about 57% of people have coverage without any prior authorization. If we include those who require prior authorization, that number is close to 90%. However, we don't view prior authorization as full coverage, just partial coverage. Approval rates for prior authorizations range from 60% to 80%, depending on the insurer, but we need physicians to submit those requests, which is a hurdle. Right now, 57% have access to neffy without needing any prior authorization or extra paperwork; they can simply get a prescription and pick it up at the pharmacy. As for the cost of goods, I don't think we've provided specific details, but generally, the costs are relatively low. I’m not sure if we’ve given precise guidance on that, have we, Justin?

No, I think the question was whether as we use up our inventory, what happens to cost of goods.

Kathy, do you want to speak to that?

We have some no-cost inventory that was expensed before FDA approval, as mentioned in our 10-Q. As we integrate that into our inventory over the next 18 months, we expect the cost of goods sold to increase slightly. However, for the most part, that zero-cost inventory consists of raw materials. We are still incurring manufacturing costs for the inventory that contributes to our near-term cost of goods sold.

Okay. Thank you.

Thank you. Our next question is from Roanna Ruiz with Leerink Partners. Please proceed.

Hey morning everyone. A couple for me. Could you talk about the strength of the neffy Experience Program and helping to convert possible later adopter physicians into broader prescribers of neffy? And what has the feedback been so far in terms of some details you've heard recently about the use of neffy there? Any updates on single versus twice dosing of neffy, for example?

Yes, I can provide an update. As Eric mentioned earlier, the neffy Experience Program has been very successful, with over 2,500 physicians enrolled who have access to neffy. Many of these physicians have utilized all the resources we provided. We plan to expand the program to include not only the 1-milligram dosage but also to offer additional supplies of the 2-milligram for those who have already used their initial supply. The feedback so far has been very promising based on surveys from the sites administering neffy to patients. The results have been quite favorable, with approximately 90% of patients responding well to a single dose of neffy, while about 10% require a second dose, which aligns with what we see with injections. Overall, the physician feedback has been very positive. We are considering publishing some of these findings soon to support other doctors who may still have hesitations or questions about available real-world data, especially since we have a substantial amount of such data now. We are also excited about the 1-milligram dosage being utilized, particularly for younger patients undergoing oral food challenges. Additionally, we might present an abstract on the neffy Experience Program and its results at the upcoming American College meeting.

Got it. That helps. And a quick follow-up for me. On the payer front and insurance coverage, how are you tracking against your goal of, I think, 80% commercial lives by 3Q? And could you remind us, are there any payers still in negotiations or in progress right now that you would need to secure to get there?

Yes, we are still in discussions with several payers. We have a contract with Zinc but are negotiating with Caremark and Aetna for coverage of neffy. Caremark is a significant insurer that we are trying to finalize an agreement with. Additionally, we are working with Prime and various Blue Cross companies to secure more coverage. Some Blue Cross entities already have coverage in place, and we maintain a scorecard on our website for transparency regarding which companies have coverage and which are still pending. Currently, Caremark is processing prior authorizations at a high approval rate, between 60% and 80%. Although they still require prior authorization for neffy, approvals are happening quickly. We aim to finalize agreements with key payers to reach our goal of 80% coverage. Overall, with prior authorization, we are already exceeding 90%, and only a few companies are currently blocking access to neffy, which is encouraging.

Yes, sounds good. Thanks.

Thank you. Our next question comes from Andreas Argyrides with Oppenheimer. Please proceed.

Good morning and thank you for taking our question. I apologize for the earlier disruption. Rich, could you share your thoughts on the remainder of the year, particularly regarding how the Q1 results are aligning with the anticipated inflection point in the second half? Thank you.

Yes, I think we're still tracking according to plan and exactly where we believe we should be right now. We are obviously expecting to see that inflection in the third quarter. The August, September timeframe tends to be peak sales for this product, especially with the children. Our sales are still heavily weighted towards children with the 2-milligram. We expect that to be expanded, and greater focus on children with the 1-milligram. So, we do expect to see that inflection point start this summer. And with the DTC campaign and 1-milligram available, we think that that's where we'll start to see a real upturn in market share.

And then just a quick follow-up. Do you still think that prior auths are the biggest impediment at the moment? And so when you get to the broad access that you're guiding towards, that will be a real boost?

Yes, I mean I think the prior authorizations when we have low insurance coverage is an impediment. When we start to get higher and higher up in insurance coverage, there are fewer prior auths the docs have to deal with, and they're more than happy to write prior authorizations. They just don't want to write too many. So, it's a matter of volume, right? And so we do see the number of prior authorizations coming down, we see the approval rates increasing. So, that's a good sign, and that encourages doctors to continue to write prior authorizations for those patients that are not getting automatic insurance coverage without paperwork. So, that's encouraging. So, we do think it's a headwind, but it becomes less and less and less as time goes by because the remaining patients that are not covered or those insurance companies that are delaying. The doctors are more willing to write the prior authorizations because there's just fewer of them. Does that make sense?

It does. Thanks. And congrats on the quarter. Thanks. I'll jump back in the queue.

Thank you.

Thank you. Our last question is from the line of Louise Chen with Scotiabank.

Hi, thanks for taking my questions here. So I just wanted to ask you how we can think about the sales targets that ALK has to hit in order to get to the performance-based payments that you have discussed? And then the second thing is, what is your market share now? And where do you hope to be by the end of the year? Thank you.

Eric, I think you should take that question, if okay.

Yes, let me take the second part first. So when you look at market share overall in the category of the basket of epinephrine across the board, brand and generic, we have about a 1.3% share. But what we also focus on more importantly is our targets of the doctors that we're calling on directly. That's about 6.2%. And then we also have super targets, which is about 7.5%. So, these are doctors that we spend extra time in terms of our promotion and focus. As far as the ALK co-promote, this is a great opportunity that we are very excited about. Obviously, we're able to expand our footprint of the number of reps. We're going to grow from about 12,500 physicians with direct promotion up to about 20,000. So, we have some milestone targets in terms of market share that we think is very reasonable to hit those targets. And especially as we've articulated, we've got so many catalysts coming up in the next three to six months here with the 1-milligram, the DTC commercial, and continued payer coverage improving. So, we feel really confident about this co-promote and look forward to the impact that they're going to have in the pediatric space.

Great. Thank you.

Thank you. And our last question is from Lachlan Hanbury-Brown with William Blair. Please proceed.

Thank you for the questions. Could you provide details on the number of prescriptions that were written and filled in the quarter as we try to understand the capture rate of IQVIA and other providers? Also, you've mentioned the PAs and their high success rate. Can you discuss how many of the prescriptions in the past quarter were covered versus those that required a prior authorization?

Okay. I think, Eric, you should probably take that question.

Sure. Sounds good. So, first, when we look at the prescription data through IQVIA, we've talked about this before, and it's not 100% capture of everything. Our cash prescriptions through Blink are not covered. But roughly, if you look at the extended unit data on a weekly basis, it's about 13,000 prescriptions or units. But again, that's not a complete capture. And then as far as the PAs, if you look at the beginning of this year, we were looking at about 70% of prescriptions required a PA. That's down to about 45%. So, as Rich went through and I went through in our comments, we're seeing the PAs come down, which is a very positive thing. We work closely with the doctors and obviously, their staff to submit the PAs. We're continuing to drive that. And I think with six to seven months under our belt, we have really good insights in terms of the criteria that's evaluated in terms of an approval of the PA. So, our sales team continues to share that information with office managers and those individuals in the office that are responsible for those PAs.

Great. Thanks. And could you also talk about the sort of overlap between the neffy experienced docs and the high prescribers? I mean, the 2,500-odd doctors in the neffy Experience Program, are they all in that sort of the high prescribing bucket at the moment? How is that sort of conversion looking?

Yes, I can address that. From a decile perspective, about 81% of our highest volume physicians are prescribing neffy, which is very positive. When considering the combination of deciles 8, 9, and 10, the figure rises to approximately 75%. We notice that doctors involved in the Experience Program tend to prescribe about 2.5 to 3 times more than the average observed nationally. This program is achieving our goals of fostering trust and confidence among doctors. They appreciate the opportunity to gain firsthand experience, which allows them to share personal stories with patients based on their clinical practice. As mentioned, we aim to expand this initiative in the latter half of the year, but we're already starting to roll it out through peer-to-peer education and speaker programs. Most of our speakers are part of the program and possess firsthand experience, enabling them to effectively communicate with other healthcare providers. We plan to keep promoting this, as we recognize that the program is meeting our expectations.

Thanks.

Thank you. And with that, ladies and gentlemen, we conclude our Q&A session and program for today. Thank you all for participating. You may now disconnect.