Good morning, and welcome to ARS Pharmaceuticals Fourth Quarter and Full Year 2025 Earnings Conference Call. Please be advised that today's conference is being recorded. I will now turn the call over to Justin Chakma, Chief Business Officer. Please go ahead.

Good morning, and thank you for joining our fourth quarter and full year 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 Chief Financial Officer. Earlier this morning, we issued a press release detailing our financial results and commercial highlights for the fourth quarter and full year 2025. That press release and the slide presentation that we will refer to during today's call are available in the Investors and Media section of our website. 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, everybody, and thank you for joining us. 2025 was our first full year for ARS as a commercial company. It was a year focused on building infrastructure, educating the market and learning as we introduce a new treatment into a well-established therapeutic category. Neffy is the only FDA-approved needle-free treatment for type 1 allergic reactions, including anaphylaxis. Real-world data from our Neffy Experience program published in the Annals of Allergy, Asthma and Immunology showed that approximately 90% of patients experiencing anaphylaxis are effectively treated with just a single dose, consistent with published results for injection-based epinephrine products. These data support Neffy's profile as a safe, effective and reliable treatment, which reinforces confidence among health care providers and patients. For our first full year of commercial sales, we generated $72.2 million in net product revenue. That performance reflects meaningful physician engagement and patient uptake across multiple commercial drivers, which Eric will discuss in detail. At the same time, quarterly progression has been shaped by the structural dynamics of this category, particularly the refill dominance, electronic prescribing patterns, prior authorization requirements and seasonal factors such as deductible resets and back-to-school demand. Growth has not yet followed a linear trajectory, consistent with products launched in a mature refill-driven market. We believe this reflects market structure rather than underlying demand for Neffy. Legacy auto-injectors benefit from decades of embedded renewal behavior within physician workflows. Approximately half of these prescriptions are refills, most written electronically without an office visit. As a new entrant, Neffy has relied on new prescriptions, and we have not yet reached the point where expired Neffy product contributes to volume through refills. New prescriptions require office visits, education, workflow adoption and administrative time, all of which introduce friction early in the launch. These realities informed our commercial team, and we have refined our execution approach going into 2026. As part of the continued refinement of our strategy, beginning in the second quarter, we will expand our sales force and realign territories to increase engagement with our priority accounts. Importantly, this is funded through reallocation of existing commercial resources and will not increase our planned SG&A expense in 2026. We also strengthened our virtual and digital strategy. Given the dominance of electronic refills, long-term success requires participation in renewal workflows, not just influence of the initial prescription. Our Get Neffy on Us program at getneffy.com offers commercially insured patients a free virtual visit with a prescriber along with a zero co-pay for eligible patients. getneffy.com is designed to reduce administrative barriers and streamline patient transition from auto-injectors to Neffy. In parallel, we refreshed our DTC campaign early this year to emphasize practical real-world use, including fear-free administration and portability of Neffy. We are still early in building up the getneffy.com awareness. However, engagement indicators have been encouraging so far. Collectively, these efforts are intended to improve consistency and scalability over time. As we move forward into 2026, our focus remains on disciplined execution. Our priorities fall into three categories: access, adoption and advancement. On access, we are committed to expanding unrestricted coverage with the remaining major PBM, CVS Caremark, where discussions are ongoing. In a high-volume category like epinephrine, prior authorization requirements can create meaningful administrative friction. Reducing that burden remains an important objective. We ended 2025 with approximately 93% overall commercial coverage, inclusive of plans that may still require prior authorization and approximately 57% of covered lives have access without prior authorization. On adoption, we are focused on deepening engagement in high-volume practices, improving workflow integration and building the installed patient base. As the installed base matures and product reaches expiration cycles, renewal contributions should become increasingly relevant beginning later in 2026 and into 2027. On advancement, our international partners continue to secure regulatory approvals across Europe, China, Japan and Australia, reinforcing the broader global opportunity of Neffy. We expect continued regulatory progress and partner-led launches in these territories in 2026. We also continue to advance our pipeline in the treatment of chronic spontaneous urticaria flares with interim data expected in the second half of 2026 from our ongoing Phase IIb trial. This is an indication with peak sales potentially as large as Neffy and anaphylaxis. We remain on track to finish this study by the end of 2026 with Phase III beginning in mid-2027. In summary, Neffy is a differentiated product operating within a large established market. We have made important progress in our first full commercial year, and we are applying those learnings to sharpen execution and improve consistency going forward. With that, I'll turn the call over to Eric to share more details on our commercial execution.

Thank you, Rich. 2025 was Neffy's first full year on the market and one in which we learned a great deal about operating within a mature refill-driven category. My comments will focus on four areas: prescriber adoption and field execution, payer access, consumer demand and DTC performance and market expansion and refill behavior. Starting with prescriber adoption and field execution as of the year-end 2025, more than 22,500 health care providers have prescribed Neffy, representing significant growth from midyear levels. Fifty percent of these prescribers are repeat writers, indicating continued usage once they gain experience with the product. Prescriptions remain concentrated amongst our high-decile allergists and pediatricians, with approximately 80% generated by decile 7 to 10 prescribers. This concentration validates our targeting strategy and reinforces that Neffy is gaining traction in high-volume practices. Our sales representatives are highly focused on leveraging market access wins and account management in these practices. During 2025, we also gained clarity around how prescribing behavior is influenced. Approximately half of epinephrine prescriptions are refills and the majority are written electronically without an office visit. As a result, influencing workflows, not just clinical preference, is essential. Our market analysis shows that driving prescriber change in high-volume accounts requires consistent engagement, at least three calls per month with both physicians and administrative staff who manage electronic prescribing systems. That insight underpins our decision to expand our field organization from 106 to 150 and to realign territories to increase interaction frequency with priority accounts. This is about improving execution intensity, not simply expanding our footprint. Turning to market access. We ended 2025 with approximately 93% commercial coverage, inclusive of plans where prior authorizations may still be required. We are highly focused on CVS Caremark, Anthem and the large regional payers to ensure commercial coverage without restrictions. We have also secured unrestricted coverage for Medicaid patients in eight states. In other states, Medicaid coverage requires prior authorization, and we are working diligently to reduce barriers for health care providers and ensure affordability for patients in these highest volume states. Across commercial and Medicaid, we are encouraged by the ongoing discussions with payers and state-level decision-makers and look forward to sharing more information during the second quarter as those discussions progress. For plans that require prior authorization, approval rates are approximately 55%. While approvals are meaningful, the administrative burden itself can dampen prescribing momentum in a high-volume category, which is why reducing pay requirements remains a top commercial priority. Turning to consumer engagement. Our DTC efforts have materially increased awareness. Aided awareness has risen from approximately 20% pre-campaign to 60% today. Recent brand tracking data shows that about 55% of caregivers and patients recall seeing a Neffy advertisement. This exceeds industry norms and shows strong brand attribution. As expected in the first 12 to 18 months of a DTC launch, awareness builds ahead of full prescription conversion. While we are seeing lift in prescriptions, conversion is influenced by multiple factors, including ad frequency, appointment timing, product access and payer coverage. Importantly, we are building a durable patient base and expanding brand equity, positioning us to translate awareness into sustained prescription growth as HCP adoption deepens and coverage continues to expand. Our messaging has evolved alongside the campaign, focusing more directly on the challenges with needle injectors. Previously, we emphasized differentiation with our Hello Neffy, Goodbye Needles campaign. Recently, we've begun to emphasize the emotional and lifestyle benefits, reduced anxiety for parents protecting their children when heading to school, portability for people with active lifestyles and greater confidence in administering Neffy without hesitation when needed. We are also integrating DTC with our digital conversion platforms, including our Get Neffy on Us program. Currently, approximately 10% of Neffy prescriptions are facilitated through this program, which allows eligible patients to obtain Neffy without waiting for their current needle injector to expire or requiring an in-office visit. We expect this percentage will expand meaningfully over the next 12 months as awareness grows as we more tightly integrate DTC and digital conversion pathways. The long-term objective is clear: build a large base of Neffy patients who renew electronically. As this base matures and Neffy gains market share, the renewal dynamics will act as a tailwind instead of a friction point. In the broader epinephrine auto-injector market, IQVIA research indicates that only 31% to 39% of refill prescriptions are renewed after 12 to 24 months from the initial prescription. This reflects a natural level of patient turnover over time and creates a meaningful opportunity with the majority of patients cycling through refill decisions within one to two renewal periods. Healthcare providers have multiple touch points to recommend therapy and to introduce Neffy as a better treatment option. To fully capture this near-term opportunity, it is critical that we participate not only in in-office prescribing decisions, but also in electronic renewal workflows, where many of these refill decisions are made. Embedding Neffy into those digital pathways expands our ability to intercept patients at the point of renewal. Encouragingly, early patient surveys indicate strong refill intent amongst Neffy users with initial renewal activity expected to emerge in 2026, though it remains early in our launch. Additionally, we are seeing prescriptions come from all patient segments, those who are newly diagnosed, those who are previously diagnosed and untreated and those who had lapsed, which suggests both capturing share in the market while also expanding it. Over the course of 2025, we strengthened prescriber depth and engagement. We expanded commercial coverage, we materially increased awareness. We built a scalable virtual conversion infrastructure, and we began laying the groundwork for renewal-driven sustainability and growth. 2026 is about operational precision and consistency. The adjustments we have made reflect a deeper understanding of the category dynamics and the drivers of durable growth. Our objective is on steady, sustained growth built on tighter workflow integration and disciplined commercial execution and continued alignment between awareness, access and prescribing behavior. I'll now turn the call over to Kathy.

Thank you, Eric. I'll walk through our financial results and then spend a few minutes on capital allocation, operating discipline and our path to cash flow breakeven. For full year 2025, total revenue was $84.3 million, comprised of $72.2 million in U.S. net product revenue, reflecting our first full year of commercial sales, $9.7 million in revenue from collaboration agreements and $2.4 million in supply revenue from our international partners. As we've emphasized in prior quarters, we believe U.S. net product revenue is the clearest indicator of underlying demand and commercial traction. That revenue stream reflects real market penetration and recurring prescription behavior. R&D expenses were $13.2 million, primarily driven by our product development, clinical trials and personnel-related costs. SG&A expenses were $230.1 million, reflecting our investment in commercialization, including DTC and our sales team. These investments were intentional and strategic designed to build durable market share and long-term brand equity. As noted, we are preparing to expand our sales force from 106 to 150 beginning in the second quarter of 2026. This expansion will be funded through reallocation of existing commercial resources, including reductions in lower-yield spend categories, such as certain market research and non-core initiatives. As a result, the expansion is expected to be neutral to our overall SG&A run rate in 2026. This is an important point of our operating discipline. We are not increasing spend but optimizing it. We are directing dollars toward high-return field-based commercial execution based on our insights and learnings we have gathered during launch, which we expect will accelerate revenue growth without increasing structural cost. This approach reflects a more focused and execution-driven phase of the launch. Separately, at year-end 2025, gross to net was in the low to mid-50% range. We continue to target gross to net retention of around 50% at steady state. As coverage broadens and prior authorization requirements decline, we expect greater predictability in revenue modeling and continued operating leverage. Turning to our cash balance. We ended 2025 with $245 million in cash, cash equivalents and short-term investments. This provides a strong and flexible balance sheet for a commercial stage company. Our current cash position is expected to be sufficient to fund ongoing commercial expansion of Neffy in the U.S. with continued investment in DTC and field execution to advance our chronic spontaneous urticaria program and to carry the company through expected cash flow breakeven, a critical milestone for the company. In summary, we are focused on strong execution, disciplined investing in our commercialization efforts, growing revenue and market share and a clear path to profitability. With that, I'll turn the call back to Rich for closing remarks.

Thank you, Kathy. As we move into 2026, our focus is on steady execution quarter-by-quarter. It is still early in the commercial life cycle of Neffy, a product that addresses a meaningful need among patients and caregivers with food allergies. We are encouraged by the progress made to date, given the structural dynamics of this large established market, which takes time to navigate. Our priorities in the months ahead are expanding access, deepening the prescriber base and office staff engagement and continuing to build a loyal patient base. At the same time, we remain disciplined in how we allocate capital and manage expenses. We believe we have built the foundation to support durable growth and long-term value creation. Thank you for your continued support. Operator, please open the line for questions.

Our first question is from Ryan Deschner with Raymond James.

This is Anthony on for Ryan. Just one question from us. You've previously mentioned inventory dynamics were very different from 3Q to 4Q last year. How are you thinking about inventory dynamics in 1Q so far and into the 2Q back-to-school ramp?

Eric, do you want to take that question?

Yes. Thank you for the question. We watch that number closely. It's called days on hand. And right now, what we're seeing in the first quarter is something you would typically see managing days on hand. So we're very comfortable with that. As we get into kind of the June, July, August and September time frame, we'll obviously watch that closely, too, and make sure that we manage that. The wholesalers are looking at kind of like an average of the last couple of weeks and they project out. But obviously, we'll watch that closely as share and volume increases in the back-to-school season when the volume picks up.

All right. And actually, if you don't mind, can I ask one more question?

Sure.

How are you looking at the direct-to-consumer spend in 2026? And yes, that's it.

Yes. So we expect that the direct-to-consumer spend in 2026 will be very similar to what we spent in 2025. It's about roughly $100 million between direct-to-consumer and direct-to-health care provider advertising. So that's what we're projecting right now.

Our next question coming from the line of Andreas Argyrides with Oppenheimer.

Congrats on a successful year. Can you give us a little bit more color on what you're seeing on the contribution from the Get Neffy program? And then also, how are you thinking about timing on expanding unrestricted access? Yes, maybe a follow-up.

Yes. So first on the getneffy.com. So we're seeing a little bit over 10% of our prescriptions coming through getneffy.com at this point. We believe the program is growing well. So we see the trend lines are going well, and it's starting to catch on. A lot of it is just building awareness of the program. And again, the program provides benefits to both the physicians by making it a little bit easier for them to deal with prescribing and especially if there's a prior authorization necessary and also for patients who want to get Neffy and don't want to wait the long periods of time it sometimes takes to get an appointment with an allergist to get in to get a prescription. So we think it's going to grow over time, and we're very happy with the program right now. And the second question, just remind me, Andreas, sorry.

Just more on the timing of expanding the access.

Yes. Well. Right. Okay. So we believe we'll have some confidence in our coverage very shortly in the next month. Certainly, Caremark will wait until July 1. And then Anthem and Aetna can actually move a little bit quicker and so can Blue Cross companies; if they put it on formulary, they can move a little quicker. But Caremark has a very rigid system, so they put it on July 1. So we believe heading into the summer, we'll have a fairly substantial expansion of our coverage. And then we're also working very heavily, Andreas, on getting additional Medicaid coverage, and we're making a lot of progress in that arena as well.

Our next question coming from the line of Lachlan Hanbury-Brown with William Blair.

I guess I'd be interested on the sales force. You said the sort of expansion there is funded by reallocation. You mentioned a couple of points, but would appreciate any more detail you can give on kind of where that funding is coming from and what is, I guess, being deprioritized to fund the sales force?

Well, I think, and Eric or Kathy can go into more detail, but I think some of it is coming from advertising. A lot of it is coming from market research, where we were doing quite extensive market research and felt we could cut back on that and shift that funding over to the sales force. Kathy, do you want to go into any more detail on that? Kathy, maybe on mute.

I'm sorry, my audio is very garbled. I didn't hear the question.

So Lachlan, do you want to repeat the question or...?

Yes, sure. I mean I was just interested in a bit more color on where the funding for the sales force expansion is coming from or what's being deprioritized? I know you said market research and a few other things in the call, but wondering if there's more you can elaborate on there.

Lachlan, as Rich said, we looked across the entire marketing and commercial budget and the things that we're taking down, like we looked last year at some of the large conferences, some of the regional conferences that we did. We really did an analysis of the greatest impact in terms of prescribers being there and then we do promotional tracking of them. So we took some of that budget down. As Rich also said, we look to optimize our spend from a media perspective, so took some money from there. And then also just monies that the representatives use in the offices to bring in lunch and things along those lines, a very small portion. But again, we feel very confident that just does not have any impact on our ability to execute what we need to do, but more importantly, to take the sales force from 106 to 150 to make sure that we have that really, really strong account management pull-through and the frequency that we see that really links to higher market share adoption is what we're excited about.

And maybe the second question. Can you talk more about what you're seeing from the direct-to-consumer campaign? I mean I know you said you're seeing good awareness increases, but are there any other signs beyond awareness that that's sort of having an effect or maybe even driving behavior? Appreciating it's probably a bit early still to be seeing a meaningful shift in behavior?

Yes, I think we do. There are different factors; we have a lot of analysis that goes into that, and we can track patient behavior when they watch a commercial, especially via connected TV or pop-up ads. We can trace that behavior to actions like visiting the website and then getting a prescription. So we definitely see an impact from the direct-to-consumer campaign.

And Rich, I would just add too, like when we do some of the surveys, too, the recall of the advertisement is in the mid- to upper 50s, which really is strong and exceeds what we see kind of across the board in industry norms. So that's obviously encouraging in addition to the awareness. The feedback we've also heard too in some of our just research of patients and consumers, too, is that the messages are resonating. We're very excited about the new creative campaign, too, as in my comments, and Rich talked to this as well, where it really gets to the point of the challenges with the needle injector, talks about the emotional impact, more of the ease of use of carrying, lack of hesitation and even points that Neffy works just as well as a needle injector; those points are resonating, and we'll continue to drive those with consumers and physicians.

Our next question is coming from the line of Kevin Holder with ROTH Capital Partners. What we're hearing from patients and consumers is that the messages are resonating. We're very excited about the new creative campaign, as I mentioned and as Rich discussed, because it addresses the challenges with the needle injector, highlights the emotional impact, emphasizes ease of carrying and reduced hesitation, and even makes the point that Neffy works just as well as a needle injector. Those messages are resonating, and we'll continue to drive them with consumers and physicians.

Congrats on the quarter. The first one, I wanted to touch on the refill rates. How should we be thinking about the timing and cadence of those refills and how it converts to revenue through 2026? And what do you anticipate the proportion of new scripts versus refills being by year-end?

On the proportion? Okay. So I'll talk a little bit first about the dynamics of the refills. So we are seeing some refills. Mostly at this stage, we would expect it to be coming from patients who just want to get more Neffy. They got perhaps one or two boxes earlier and then wanted to get more or because they've actually used the product and wanted to replace it. But we don't expect to see refill dynamics start from expiration until the end of this year. There may be some starting over the summer because of the back-to-school period and the fact that typically schools require that their epinephrine—that patients' epinephrine—parents bring epinephrine to the school that will last for the full year. So a lot of our initial launch lots are going to start expiring at the end of '26, beginning of '27. So we would expect to see some meaningful refill dynamics pick up at that point when things start to expire and also, as I said, over the summer because of the need to have a prescription that lasts for the full year. And what were you saying again, the last part of that question, if you can just repeat it.

Yes, of course. Just in terms of new scripts versus refills, how much of each are you seeing and what's the dynamic there?

Yes. I mean right now, I think the vast majority of our prescriptions are new prescriptions. So they're new patients. Eric, do you want to speak to that any more?

I think from a top line perspective, when we look at our trends and as Rich said, in the second half of this year, there is definitely volume that will be coming from refills because we're hitting more than that year, 1.5 years mark. We are seeing patients right now too, if you look at the audiences that we've previously shared, like our P1 audience is the patients that currently have a needle injector. About 75% of our prescriptions are coming from there. And then the P2, P3 audience are people that were either prescribed or diagnosed, haven't been prescribed; about 25% of our prescriptions are coming from that area. So this is from survey data of physicians and patients. But again, certainly, in the second half of this year, we'll see more of the refill impact given just the timing of the product being on the market for 1.5 years to 2 years at that point.

Okay. That's helpful. And then just one more for me. With the new advertising campaign that you launched in January, how should we be thinking about SG&A spend like throughout the rest of the year and the cadence?

I think it will be consistent. We basically gave a little bit of guidance on that already. So I think it will still be consistent. I don't think the new campaign is changing that. It's just changing the messaging and the creative part of it. But as far as the spend, I don't think we're anticipating any change in the spend.

And I am showing there are no further questions in the queue at this time. Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation, and you may now disconnect.