ARS Pharmaceuticals Q4 2024 Earnings Call Transcript

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Provided by Quartr
March 20, 2025
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Operator

Good day, and welcome to ARS Pharmaceuticals Fourth Quarter and Full Year twenty twenty four Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Instructions will be provided at that time. As a reminder, this call is being recorded.

Operator

I would now like to turn the call over to Justin Chock, my Chief Business Officer. Please go ahead.

Justin Chakma
Justin Chakma
Chief Business Officer & Secretary at ARS Pharmaceuticals

Good morning. With me today are Richard Lowenthal, Co Founder, President and CEO of Aris Pharma Eric Krahz, our Chief Commercial Officer and Kathy Scott, our CFO. Earlier today, we issued a press release outlining our fourth quarter and full year '20 '20 '4 results along with recent business highlights. You can find this press release on our website at arspharma.com. Our call today will proceed as follows: Rich will provide an overview of our corporate progress and key development and insights into the Nephii launch Eric will discuss Nephii's ongoing and planned commercialization efforts in The U.

Justin Chakma
Justin Chakma
Chief Business Officer & Secretary at ARS Pharmaceuticals

S. And our market strategy Kathy will then provide a financial overview, after which we will open the call for questions. Before we begin, please note that today's discussion includes forward looking statements based on our current expectations. These statements are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to our earnings release issued today for further details and a discussion of risks.

Justin Chakma
Justin Chakma
Chief Business Officer & Secretary at ARS Pharmaceuticals

With that, I'll turn the call over to Rich.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Thank you, Justin, and thank you to everyone dialing in today. The past six months have been extremely productive for ARS. Since September, we have successfully launched nephi two milligrams in The United States and secured FDA approval for the one milligram Nephi dose for patients weighing fifteen kilograms to less than thirty kilograms. The population of children at this lower weight range that will use Nephi one milligram represents 23% of the current auto injector market. ARRIS has also made significant strides in payer coverage with over 51% commercially insured able to get nephi without a prior authorization as of April 1.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

And we anticipate over 80% without prior authorization by early this summer with the addition of nephi to the Caremark formulary. Our commercial execution has established a strong foundation of healthcare provider awareness for nephi as a compelling alternative to traditional epinephrine auto injectors, providing patients with a needle free portable and highly effective option for severe allergic reactions including anaphylaxis. The U. S. Epinephrine market represents a $3,000,000,000 in annual net sales near term addressable opportunity among six point five million patients prescribed epinephrine in the last three years with an additional expansion opportunity among untreated patients of over $7,000,000,000 in annual net sales covering an estimated twenty million patients that have been diagnosed with severe allergic reactions based on claims data.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

However, only three point two million patients consistently fill their auto injector prescriptions, leaving a vast population without protection. Nephi directly addresses this gap by eliminating barriers such as the needle anxiety and portability challenges. Just a few weeks ago at the twenty twenty five American Academy of Allergy, Asthma and Immunology Annual Scientific Meeting, we showcased nine presentations on the continuously growing body of clinical evidence demonstrating the therapeutic value of Nessie to healthcare providers. Notably, among the presentations at the Quad AI meeting, a study in Japanese patients experiencing anaphylaxis symptoms after oral food challenge found that patients receiving nephi experienced low symptom scores within ten minutes compared to traditional intramuscular injection. A separate set of clinical studies in China reinforced the bracketed pharmacokinetics and pharmacodynamic profile of Nephi in persons with pure Chinese ethnicity, demonstrating its efficacy and safety under a variety of conditions, including self administration, allergic rhinitis, infectious rhinitis and allergy challenges and repeat dosing.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

An additional analysis confirmed that nephi is safe and achieved effective exposures of epinephrine for patients four years of age and older and weighing fifteen kilograms to less than thirty kilograms. I'm proud of these data we presented at the AAAAI meeting as it showcases nephi's extensive and rigorous clinical development program. Nephi remains the only approved product to have generated anaphylaxis efficacy data in a clinical study to have met the bracketing criteria established by FDA for approval of all key pharmacokinetic parameters to ensure safety and efficacy and to have data demonstrating that it is well tolerated in children down to fifteen kilograms body weight to account for almost half of the patients prescribed epinephrine. This and other extensive clinical data we have previously presented on nephi's profile has now been supported by the growing real world data of treating anaphylactic reactions from our nephi experience program. The data from the nephi experience program to date is numerically better than that historically reported with epinephrine injections.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

We plan to share additional details of the survey of our nephi experience program once we have completed the survey and plan to repeat this several times during the program as it progresses with over two thousand five hundred clinicians having nephi for oral food challenges and immunotherapy treatments. At QuadAI, hundreds of physicians shared with us many of their positive success stories of treating patients with nephi, including cases where patients had been rescued by nephi from even having very severe anaphylactic reactions and being unconscious. Physicians are clearly and enthusiastically communicating to us that they believe that nephi represents a new standard of care. We have established a strong initial commercial trajectory in The U. S.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

To ultimately deliver on this expectation and establish nephi as the new standard of care. Since the initial launch in September of twenty twenty four, nephi generated $7,300,000 in net product revenue in The United States, reflecting a strong early adoption since it became available in the fourth quarter and strong breadth of early prescribing with thousands of healthcare providers prescribing nephi, reflecting the allergy community's confidence in nephi as an alternative treatment. That said, as you can see in the IQVIA prescription data, we are still on the early part of the S curve of what we anticipate to grow into a multibillion dollar blockbuster peak sales trajectory. We anticipate a significant inflection in both the depth and as well as the breadth of healthcare provider prescribing later this year as the headwinds from the need for prior authorization requests diminish. Healthcare providers consistently tell us that the current levels of nephi prescribing represent only a fraction of their intended use of the product in the future.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

In fact, one leading allergist stated that he intends to switch all of his 4,000 patients, but our data shows that this doctor is only prescribed to about one percent percent of their patients to date given the need for these prior authorizations to get approval. A key learning in the nephi launch is the unique administrative barrier that prior authorizations pose for nephi due to the large volume of epinephrine eligible patients, as well as the acute nature of this disease. This results in the need for a very large number of prior authorizations to get a significant revenue, given each prior authorization translates to an average of 1.3 prescriptions per patient to date. As a result, healthcare providers only have bandwidth to prescribe very selectively due to the cumulative time required to prepare prior authorizations, even with simplified forms and ARS facilitation through BlinkRx. Based on the feedback from hundreds of prescribers, including most recently at the Quad AI meeting, we expect to see a tipping point in the nephi trajectory as we obtain our payer coverage goals early this summer and make prescribing more seamless for physicians.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Our payer engagement strategy has already yielded multiple favorable coverage decisions, including Ascent, the group purchasing organization for Express Scripts, one of the three largest pharmacy benefit managers in The United States, who put nephi on formulary within ten weeks of launch. In the last month, we also have signed contracts and provided patients with unrestricted access to nephi with two other group purchasing organizations, MSR and Zinc, at terms that preserve our greater than 50% gross to net yield. MSR signed an agreement in February adding nephi to their formulary, which now gives patients who have OptumRx access without any restrictions. As of April 1, UnitedHealthcare will also add nephriate to their formulary with unrestricted coverage under the MSR agreement. Just the past few days, we also obtained agreement and coverage with Zinc, which provides access to the largest payer in The United States, CVS Caremark, as well as Anthem, Aetna and several other insurers.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

We anticipate being on formulary for CVS Caremark, Anthem, Aetna and others by July 1 in time for the summer peak prescribing season for children. Therefore, we remain on track for 80% unrestricted commercial coverage by the summer of this year. We have also made progress on Medicaid with bellwether states such as Texas, Alabama and Montana adding nephi to their formularies without prior authorization and other states are expected to follow suit in the coming months leading into the summer prescribing season for children. By the summer, we anticipate physicians to freely start writing nephi for their patients without being deterred by the administrative workload of prior authorizations. This will be in time for the back to school season driven by the pediatric population and will also be supported by the fact that we will have one milligram nephi in the marketplace by May 2025, which represents 23% of all prescriptions as mentioned earlier.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

And having ended this year with over $314,000,000 in cash or cash equivalents, we are in a strong financial position to accelerate adaptation and awareness during the back to school season, including an extensive direct to consumer campaign we anticipate launching in May of twenty twenty five. In parallel, we are also on track to have a global commercialization footprint with nephi within one year from now. As a reminder, your nephi, the equivalent of nephi in Europe, is approved in the European Union. Our UK regulatory submission is under review with a decision expected by May 2025 and our partner, AOK Abello, is preparing for commercial launches in Germany and UK by this summer. Regulatory submissions are also completed in Canada, China, Japan and Australia with decisions in Canada, China and Japan anticipated by year end 2025.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

As we look ahead, physicians and patients demand is clear for Nessie. We are also getting favorable payer formulary coverage, which is now just a function of time with the three major GPOs signing agreements that are favorable and give us a 50% close to net or better. We are also accelerating our marketing and investments in direct to consumer advertising prior to the back to school peak prescribing season. We expect to see significantly broader and deeper adaptation of nephi across the board through conversion of the existing epinephrine users, reactivation of patients who previously avoided treatment due to their fear of injection and bringing nephi to those who didn't have a prescription or diagnosis in the past. Let me turn the call over to Eric to walk through our commercial highlights and plans for increasing adoption and use of nephi in 2025.

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

Good morning and thank you, Rich. As we've laid out previously, our nephi commercial strategy is focused on three core areas: position education and engagement to drive nephi adoption and market share payer coverage to ensure affordability and access to nephi, and patient awareness and education to encourage adoption and prompt patients to ask their healthcare provider for nephi. Our team is executing very well against all three of these. To date, our sales team has directly engaged with approximately 9,000 healthcare providers. Additionally, more than 4,000 healthcare providers have submitted nephi prescriptions through BlinkRx by nephi connect.

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

Importantly, approximately 81% of these prescriptions were submitted by physicians in the highest decile of allergists. These are physicians who represent the highest volume prescriptions in The U. S. At the recent AAAAI meeting, we met with over 1,000 physicians and the feedback across the spectrum of stakeholders continues to reinforce the enthusiasm for a needle free epinephrine treatment and the growing demand for nephi. Among the physicians that the team engaged at the conference, the feedback regarding the product was overwhelmingly positive.

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

Many HCPs who have used nephi in a clinical setting as part of the experience program shared their experiences. One particular influential physician who is a thought leader amongst his peers had his first experience with nephi just two weeks before the conference. He was so impressed with the response, which appeared within a minute that he shared his experience with his colleagues and nursing team. Allergists have reported great real world success with response rates similar to or even better than those historically reported with epinephrine injection products. As of today, approximately two thousand five hundred allergists have enrolled in our nepothe experience program and as shared, it allows for hands on clinical use and real world validation of the product.

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

This participation represents over eighty percent of the healthcare professionals conducting allergy challenge studies, reflecting a strong interest in nephi. Our commercial team is actively sharing this information with both nephi experienced participants and healthcare professionals more broadly, which reinforces their confidence in nephi's clinical profile backed by real world response data. We have observed strong adoption by payers with positive coverage decisions from major organizations such as Express Scripts, Cigna, Optum, Navitus Health and TRICARE. The coverage enhances access to nephi for millions of commercially insured patients across the nation. Furthermore, starting April 1, UnitedHealthcare will include nephi as a covered treatment without a prior authorization.

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

In addition, all three group purchasing organizations have signed contracts with us, Ascent in late Q4 of last year and Zinc and MSR in the last few weeks. And we expect downstream payers of these GPOs to adopt the negotiated terms and add nephi to the formularies with unrestricted access. Payers recognize the added value that nephi offers by lowering barriers to prompt epinephrine use, leading to better outcomes for patients and reduced healthcare costs. Our goal is for nephi to achieve more than 60% commercial coverage by the end of the first quarter. Given our current position, we are confident in our ability to reach this target.

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

We are actively engaging in discussions and contract negotiations with additional key payers and expect to achieve 80% commercial coverage by the early part of the third quarter. As commercial coverage increases, the product acquisition process is streamlined, allowing doctors to more easily send prescriptions directly to retail pharmacies such as CVS and Walgreens. For patients with commercial insurance, our co pay assistance program has made nephi more affordable. Most commercial patients only pay $25 for each prescription, which is lower than the average co pay of $40 for a generic auto injector. Our co pay support is automatically applied at the point of sale, ensuring that nephi is accessible to more patients.

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

Switching gears, we are also proud of our nephi in schools program, which provides K-twelve schools with two cartons or four single use doses of Nephi at no cost. This initiative aims to promote widespread adoption of the product in schools nationwide. To date, more than 5,000 nurses have participated in our educational sessions and are now advocates for NFIE. We greatly appreciate the collaboration with school nurses who play a crucial role in safeguarding children by administering this easy to use needle free epinephrine device in emergencies. As we look ahead, we are planning a large scale direct to consumer advertising campaign starting in May.

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

This is time for the peak prescribing season during the summer. This campaign will include connected television platforms such as Hulu, Netflix and Prime, as well as linear TV focused on news and sports channels. In addition, we will utilize print and social media incorporating influencer partnerships with a combination of broad and targeting advertising strategies. This initiative is crucial because our market research indicates that when a patient requests nephi, physicians will prescribe it, provided there are no market access barriers. We also recognize that the epinephrine market has been highly responsive to promotional efforts in the past, and we have seen no meaningful promotion in the last decade.

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

We are planning additional near term commercial initiatives specifically aimed at the pediatric population, targeting both healthcare providers and caregivers. We plan to share more details about these initiatives in the coming weeks. The pediatric population significantly contributes to the summer peak in prescriptions observed in the market as schools prepare to reopen. We believe we are well positioned to take advantage of this seasonal trend, especially since early adopters of nephi are parents with children who are affected. The recent approval of the one milligram dose will allow us to access the entire school age population.

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

We also plan to continue collaborating with our advocacy partners running PSA campaigns as well as other institutional partners to create a total surround sound environment for an FA. Finally, as the year progresses, we will evaluate further expansion of our sales team by early twenty twenty six to maximize healthcare provider engagement and drive market share. After spending several months on the front lines with our sales team and meeting with hundreds of prescribers, it has become clear that nephi has a compelling clinical profile that resonates with both physicians and patients. This has been further validated by the successful treatment of patients with allergic reactions as demonstrated in our nephi experience program. All indications show that physicians are eager to prescribe nephi more frequently and we understand the steps needed to remove the obstacles they face.

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

We are excited to unlock the demand for nephi in the coming months by ensuring a more seamless insurance experience and driving patient demand through our comprehensive DTC campaign and our sales and marketing efforts. Let me now pass the call over to Kathy to talk through our financials.

Kathleen Scott
Kathleen Scott
Chief Financial Officer at ARS Pharmaceuticals

Thanks, Eric. We reported our Q4 and full year 2024 financial results in a press release this morning and I'll walk through some of the highlights. In terms of sales, we're proud to have recorded $6,700,000 in neppy sales for the fourth quarter of twenty twenty four and $7,300,000 for the full year 2024 since our launch in late September. Of note, these revenues are slightly higher than the preliminary numbers that we announced mid January. Before turning to our revenues, I'll take a minute to explain how we're treating the cash proceeds from our ALK licensing agreement that was signed in November 2024.

Kathleen Scott
Kathleen Scott
Chief Financial Officer at ARS Pharmaceuticals

As a reminder, we received a non refundable upfront cash payment of $145,000,000 from ALK. In Q4, only $73,500,000 of that payment was included in our revenues. The remaining $71,500,000 is treated as a liability on the balance sheet due to GAAP accounting treatment. Specifically, $69,400,000 is treated as a financing liability and $2,100,000 is treated as a contract liability for future performance obligations. This GAAP accounting treatment is because of a specific term of our licensing agreement that we built in to maintain strategic optionality for the future.

Kathleen Scott
Kathleen Scott
Chief Financial Officer at ARS Pharmaceuticals

The agreement ensures that ARS has the option to repurchase rights for certain regions partnered out to AOK, which results in our not being able to account for a portion of the cash proceeds as revenue. So while the business and economic intent is that of a licensing agreement, due to the open ended flexibility of the reacquisition language, GAAP treats cash flows from these certain territories as a financing agreement that shows up on the balance sheet impacting our reported revenue figures. To reiterate, there is no impact on the amount of the non refundable cash proceeds received and we have sole discretion in how they are used. Going forward, none of the financing liability from the ALK agreement that appears on the balance sheet as of 12/31/2024, will be included in revenue until the expiration of the ALK agreement. We expect to receive $5,000,000 in cash proceeds from milestones under the ALK agreement in each of Q2 and Q4 twenty twenty five.

Kathleen Scott
Kathleen Scott
Chief Financial Officer at ARS Pharmaceuticals

Approximately half of each $5,000,000 payment will be recognized as GAAP revenue. The other half would not be recognized as GAAP revenue, but will be added to the financing liability on the balance sheet. Future royalty payments from ALK would be recognized as GAAP revenue if they are related to the territories that are not subject to the repurchase right. Royalty payments related to territories that are subject to the repurchase right would be capitalized and added to the financing liability on the balance sheet. To summarize our 2024 revenues, total revenue for the fourth quarter of twenty twenty four was $86,600,000 dollars which included $6,700,000 in net product revenue from nephi sales in The United States, Seventy Three Point Five Million Dollars in collaboration revenue from ALK, six million dollars in collaboration revenue from our licensing partner in Japan and $400,000 in revenue from supply agreements.

Kathleen Scott
Kathleen Scott
Chief Financial Officer at ARS Pharmaceuticals

Full year 2024 revenue totaled $89,100,000 reflecting $7,300,000 in neppy sales in The U. S, Eighty One Point Five Million Dollars in collaboration revenue and $400,000 from supply agreements. The Q4 and full year 2024 revenues do not include the $71,500,000 cash proceeds received from ALK that are required by GAAP to be recorded as a liability on the balance sheet. Turning to our expenses. R and D expenses for the fourth quarter and full year 2024 were $3,000,000 and $19,600,000 respectively.

Kathleen Scott
Kathleen Scott
Chief Financial Officer at ARS Pharmaceuticals

These costs were primarily associated with the manufacturing of nephi to support our U. S. Commercial launch, along with certain other product development costs and personnel related expenses. Our SG and A expenses for the fourth quarter and full year 2024 were $35,500,000 and $71,700,000 respectively. These primarily reflect marketing expenses and personnel related costs associated with the commercial launch of nephi as well as general operating expenses.

Kathleen Scott
Kathleen Scott
Chief Financial Officer at ARS Pharmaceuticals

We had net income of $49,900,000 or $0.51 per share basic and $0.48 per share diluted for the fourth quarter. Net income was $8,000,000 or $0.08 per share basic and diluted for the full year 2024. In terms of our balance sheet and cash runway, we ended the year with $314,000,000 in cash, cash equivalents and short term investments. At the time of FDA approval of nephi two milligram in August 2024, we guided to an operating runway of at least three years, which budgeted an upfront fee of about $50,000,000 for an ex U. S.

Kathleen Scott
Kathleen Scott
Chief Financial Officer at ARS Pharmaceuticals

Partnership. The ALK licensing agreement provide us with a significantly greater cash infusion of $145,000,000 upfront and an additional $10,000,000 in near term regulatory and launch milestones expected to be attained in mid to late twenty twenty five. As such, the combination of the capital brought in from our ALK deal, along with our earlier than anticipated success in obtaining favorable coverage decisions from U. S. Payers, has given us a lot of flexibility to further invest in the commercialization of nephi, while maintaining a strong balance sheet.

Kathleen Scott
Kathleen Scott
Chief Financial Officer at ARS Pharmaceuticals

Looking ahead, as Eric noted, we plan to accelerate our DTC investment beginning in May in order to take advantage of the back to school seasonality. We are projecting a DTC campaign spend of between $40,000,000 and $50,000,000 in 2025. In parallel, we are working to ensure availability of the one milligram nepi dose for children four years or older starting in May. With this in mind, we anticipate operating expenses, excluding both cost of goods sold and stock based compensation, will be approximately $200,000,000 to $210,000,000 for the full year 2025. With this forecast, we still expect to maintain a runway of at least three years based on our current operating plan.

Kathleen Scott
Kathleen Scott
Chief Financial Officer at ARS Pharmaceuticals

I'll hand the call over to Rich now to finish up.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

2024 has set up 2025 to be a pivotal year of commercial execution for nephi. Our primary focus is accelerating adoption of nephi and expanding global market access and advancing our intranasal epinephrine technology with the plan to start Phase II in urticaria as well as our allergy challenge clinic registry study in the next few weeks. The early enthusiasm from physicians, payers and patients reinforces our confidence in nephi's potential to become a new standard of care in emergency allergy treatment. I'd like to thank the entire ARRIS team for their dedication in making this launch a success. We look forward to continued momentum in 2025 and beyond.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

With that, let's open up the call for questions.

Operator

Thank you. We will now begin the question and answer session. Our first question comes from Ryan Deschner with Raymond James. Your line is open.

Ryan Deschner
Ryan Deschner
Vice President - Equity Research at Raymond James Financial

Hi, good morning. Thanks for the question. And congrats on the progress. I think you mentioned that nephi one milligram will be available starting in May. A lot of KOLs we've spoken to has been the big source of demand even currently.

Ryan Deschner
Ryan Deschner
Vice President - Equity Research at Raymond James Financial

How are you looking at the ramp for this format relative to what we've seen with the Tumig product? And then I have a follow-up.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Yes. We believe it's additive. It's about 23% of the market. However, it's probably more than that for the impact on the sales ramp of nephi as we discussed the adoption we're seeing right now is heavily weighted towards children. So obviously adding the younger children, which obviously parents have more of an issue with injecting is actually should be very beneficial.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

And as we said, we expect it to be weighted. And in 2024, it was twenty three percent of the prescriptions for epinephrine injection. So we think the '23 will have a significant impact on our sales ramp sorry, the one milligram, excuse me, the twenty three percent would have a significant impact.

Ryan Deschner
Ryan Deschner
Vice President - Equity Research at Raymond James Financial

Got it. And then just one more, wondering if you could give us any more detail on the progress toward the 80% access goal, which I think was more toward the end of the third quarter. It sounds like it's evolving. And what proportion of nephi sales do you expect to come from public programs like Medicaid? Thank you.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Yes. And I'll speak a little bit to that. And then, Eric, if there's anything I missed, you can add in. So at this point, we're at about as of April 1. So UnitedHealthcare came to agreement with us and we'll put it on unrestricted access on April 1.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

So as of April 1, we'll be at about fifty one percent of commercial patients will have access without a prior authorization. Now it's a little over sixty percent total, but we actually focus on the ones that don't need the prior authorization because that's the what we're realizing is the major barrier to prescribing neffy for a lot of physicians, even those that are very favorable. They honestly tell us they only have so many hours in a day and weekends to write prior authorization. So it is a big headwind. With that also said, we just signed an agreement really just within the last week with Zinc.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Zinc represents Caremark, Aetna, Anthem and a number of other insurers, which is more than 25% of the commercially insured market. Unfortunately, for whatever reason, I can't tell you, but Caremark typically only puts things on formulary either January 1 and July 1. So we do currently expect them to put neffi on formulary by July 1. They do make exceptions. It could go sooner, but we don't know that yet.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

If Caremark goes on formulary July 1, we also expect Aetna and Anthem to be on formulary and by formulary I mean unrestricted access, right? So no prior authorization required because they're already approving prior authorizations fairly readily. But we do expect them to have unrestricted access by July 1 or sooner. So that would bring us very close to that 80% mark. Certainly, if you count all coverage, but even just counting unrestricted access, I think we'd be close to the 80% mark by July 1.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

And we think that's very encouraging going into the summer season on top of our DTC campaign and other information we'll be putting out to make doctors more and more comfortable with the use of nephi. We think we'll all come together for this summer period and really hopefully drive sales over the summer.

Ryan Deschner
Ryan Deschner
Vice President - Equity Research at Raymond James Financial

Thanks for the color. Appreciate it.

Operator

One moment for our next question. Our next question comes from Alexa Diemer with Cantor Fitzgerald. Your line is open.

Alexa Deemer
Biotechnology Equity Research Associate at Cantor Fitzgerald

Good morning, everyone. This is Alexa Diemer on for Josh Schimmer and congrats to the ARS Pharma team on another great year. I wanted to ask what percentage of the epinephrine market is direct to patients in comparison to the broader entities like airlines and schools?

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Okay. Well, currently very little is being sold outside of the retail market. So almost all of our sales are retail. We are working with the two largest kit manufacturers for airlines who do want to replace other epinephrine products in the kits. Obviously, airlines have to opt in, but there's a lot of advantages to neffy between the ease of use, the lack of the needle, which reduces liability for the airlines as well as the temperature excursion data, high temperature data, which is important in an airplane.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

But very little and Eric, you can chime in here. I don't think much if any of our revenue is coming from outside of retail. We expect that to grow over time. But initially it takes time for that to happen. And for example, the kit manufacturers did not want to put nephine in the kits until the one milligram was available.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

So they're waiting, because they want they need both doses. So at that point, we expect that to start to pick up over time. And again, not immediately because they're not going to go throw away all their kits or replace all their epinephrine in the kits. They're going to do it over time as it expires. Eric, do you want to add anything into that?

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

Rich, I'll just add that when we look at our forecasting, it's really focused on the retail market. As Rich mentioned, kind of this public interest market of airlines, you can think about hotels, restaurants, law enforcement, emergency rescue, that's not included. But as time goes on in terms of education and awareness and then getting funding, we do have an opportunity in that channel. And then just one point back to Ryan's question too, just people may be thinking this, the one milligram is also included in all of our payer contracts. So again, once that's available, there's no issues with the doctor writing the one milligram in addition to the two milligram.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

And I'll just add one more point to that because one of the things you need in the retail market is to find a way to make or to make it easier for some of these organizations such as restaurants to purchase neffy, right? So you can imagine a very well off restaurant can easily afford to buy a couple boxes of neffy. Most restaurants run on fairly tight margins, so buying nephi to have in the restaurant is perhaps a hurdle. One of our largest advocacy groups actually came up with a great idea and is working on this independently of us because they want to see nephi in the restaurants and they believe that without the needle, the liability again becomes much better. So that the good Samaritan using nephi can't hurt themselves versus an auto injector.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

They're actually negotiating with several of the largest insurance companies and I've mentioned this to a few analysts already to give a discount on their insurance if they have nephi in the restaurant or epinephrine in general. And we think that's a brilliant idea actually, because that would potentially pay for the nephi or the restaurant by giving a discount on their insurance if they actually have the epinephrine in the restaurant. So those kind of things are all happening, but again, we'll take some time before we start to realize significant revenue from those type of opportunities.

Alexa Deemer
Biotechnology Equity Research Associate at Cantor Fitzgerald

Awesome. Thank you and congrats again.

Operator

One moment for our next question. Our next question comes from Louise Chen with Scotiabank. Your line is open.

Louise Chen
Managing Director at Scotiabank

Hi, congratulations on all the progress this quarter and thank you for taking my questions. I had a few for you. So first question I wanted to ask you was, how long does prior authorization for those payers that require you to do it usually last for? Does it have to be renewed? The second question I had was, do you have any data that talks about that upside expansion opportunity for you?

Louise Chen
Managing Director at Scotiabank

And how many of those patients are actually picking up from there? Those that are untreated were previously diagnosed? And then last question is, I saw some headlines on the potential for epinephrine to go over the counter. I don't know if you have any thoughts on if that were to ever happen, what that would mean for you? Thank you.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Okay. So could you just repeat the questions one at a time? First question, sorry, just to make a clear

Louise Chen
Managing Director at Scotiabank

Yes, sure.

Louise Chen
Managing Director at Scotiabank

Okay. So I wanted to ask you with respect to prior authorization for the payers that require you to do it. How long does this usually last for? Does it have to be renewed at some point?

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Yes, I think, and Eric, you can add into this, but I believe that they need a prior authorization. I mean, again, the nature of this is a little unusual. You might only get one or two or three prescriptions a year, right? So they're going to get a prior authorization for that prescription. Some of them are for one, some two, we've seen three prescriptions go through or three boxes in one prescription, I should say, three units pretty readily.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

But I believe they would probably need that prior authorization each time. So that's a huge burden. And if you think about the revenue, if on average right now we're seeing 1.3 units per prescription. Now we believe that will go up significantly because a lot of those are cash pays where they're just buying one now and they'll get more once it's on unrestricted coverage once their insurance company is covering it. But if you think about it, it's only a little more than $500 in revenue to us, net revenue.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

So each prior authorization accounts for a very small net revenue and that's why we believe in this category it's a major hurdle for the doctors. Do you want to add anything to that, Eric?

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

Yes, I would just say it's a mix. It depends on the insurer as Rich mentioned. Some will require it every single time, others maybe a little bit longer. But I also think it's important as we mentioned in our presentation that we are on track to hit that 80% of coverage in commercial. And when we say that, that's covered with no PA.

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

All of our contracts that we're putting in place with the GPOs, with the PBMs, again, we're not paying any rebates if there's any type of step edit or prior authorization. So we're really confident that again, we're lowering the barriers in time here for physicians to write this product without a PA.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Okay. And if you could just repeat your second question again?

Louise Chen
Managing Director at Scotiabank

Yes, sure. Okay. So wanted to ask you for patients that were previously diagnosed or untreated with traditional epinephrine, how many of them have chosen to take your product? Just trying to assess the expansion opportunity and how that's progressing for you?

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Eric, do you have that information?

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

We haven't broken out and done any claims analysis. We have plans to do that in the middle parts of the year here. But from an opportunity perspective, as we've shared, there's three point two million patients that have current treatment and then you're looking at another sixteen point five that are diagnosed without treatment. Within that group, we know over the last couple of years, there's three point three million patients that have been prescribed epinephrine, about a third of them have filled, but they haven't refilled. So there is an opportunity, a significant opportunity there to reengage those patients.

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

When we talk to physicians, when we talk to patients in that group, the major reasons why they didn't refill or fill initially is because of the needle size, portability and affordability as well. So, when you look at our programs in commercial, again, if they're covered, dollars 25 for the prescription, even if they get more than one carton, we only charge one co pay, but we're able to again get reimbursed on two cartons or three cartons. The average co pay for a needle injector is about $40 So I think we're removing a lot of the challenges in terms of a needle free, easy to use, portable option. And we do see a very significant opportunity to reengage this population, whether it's through the physician or our DTC efforts that will launch in May.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Does that help?

Louise Chen
Managing Director at Scotiabank

Yes. Can I ask one more quick question?

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Yes.

Louise Chen
Managing Director at Scotiabank

There you go. Thank you. The opportunity for epinephrine to go over the counter, what would that mean for you?

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Yes. It's been brought up to us multiple times, including by big pharma companies. Of course, we know the inhaled epinephrine is over the counter, but it's not systemic and it's for asthma. The two criteria for over the counter obviously are first safety. We believe nephi is very safe, especially with only two doses.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

You can overdose on epinephrine, so that is a big risk and FDA has raised significant concerns about levels above that observed with two EpiPen. So that's been a big significant discussion for years and years and years that they just don't know the safety in real world patients with levels above that. So people that might take more than two doses in FE would be a concerned FDA. The other criteria is self diagnosis. You got to be able to self diagnose that you have the disease.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

And there's a lot of causes of symptoms similar to food allergies that may or may not be an actual food or venom allergy. So FDA would also have to get over that barrier of the ability of people to self diagnose. So while it's a discussion and would be interesting, I think it's a difficult hurdle for this type of product, just to profile for FDA. So I would not expect it to go TC certainly in the near future. I would not expect that to happen.

Louise Chen
Managing Director at Scotiabank

Thank you.

Operator

One moment for our next question. Our next question comes from Ruana Ruiz with Leerink Partners. Your line is open.

Roanna Ruiz
Senior Managing Director, Biotechnology Analyst at Leerink Partners

Hey, good morning everyone. So I was curious, what are you hoping to learn from the challenge clinic registry study for nephi that starting in April and around how long will that run for? And as you gather this data, would you present it in sort of a rolling basis this year at medical meetings or publications?

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Yes. So first of all, this is going to be the largest randomized controlled study ever done with epinephrine period. There's never been a study like this done, but now that we're approved, FDA believes it's feasible, we believe it's feasible. So it will be six hundred people treated, four hundred on FE, two hundred on I'm injection. And again, it will be randomized and partially blinded.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

By partial, I mean, it's blinded up to the time the physician decides to give a dose of epinephrine. They won't know what the treatment is up to that point. The second dose would not be blinded because of course they know what they gave the first time. And it would have to be the same product the second time if they need a second dose. So this is going to be a very significant study.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

FDA's primary interest is safety. Again, as I mentioned, all of our clinical trials are in healthy people in the clinic, not having a reaction. So FDA is very interested in seeing real world data of Alzheimer's. Basically, this study will be anyone they're going to give oral food challenge to is eligible to enroll. That would normally get epinephrine if they have a reaction.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

And so it's a really real world study where you're going to get patients with asthma, with all sorts of other concomitant meds. Nothing is barred in this study. So we'll get a really good sense of the safety of nephi and also of injection. So even prime injection, I don't think we have a super good sense of that in a clinical environment like this, where you're really recording things that are not just spontaneously reported. So that's the nature of the study.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

It's going to be really, it's going to be an amazing study. We will do an interim analysis. I don't think we'll do multiple rolling ones because that's just not normally done, but we probably will do an interim analysis so that at least preliminary data will be presented probably at the next Quad AI meeting. And then we'll present the full data and we will be looking at clinical outcomes as well, but those are secondaries because FDA did really focus on safety that they wanted to understand the safety of nephi, have better data on the safety of nephi. We understand its side effects are very mild and very infrequent, but nonetheless they want to see in patients that actually have a reaction and are on all their concomitant meds or have all their other concomitant conditions that you typically see in this population.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

So that's really the main focus of the study. And we will probably do an interim analysis, Rana. So that's helpful as well.

Roanna Ruiz
Senior Managing Director, Biotechnology Analyst at Leerink Partners

Yes, got it. Interesting. And then wanted to follow-up, I thought your KOL feedback that you mentioned earlier was really interesting in terms of physicians that want to switch all of their patients to DESE or possibly majority.

Roanna Ruiz
Senior Managing Director, Biotechnology Analyst at Leerink Partners

Do you

Roanna Ruiz
Senior Managing Director, Biotechnology Analyst at Leerink Partners

have a sense of the proportion of physicians out there that you're detailing that have this interest?

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

I think it's mixed. I think of some we talked to at QuadAI, which are really the top tier physicians to be very honest because they're the ones that are going to the meetings and educating themselves. And I've had a number of conversations myself with a lot of these. And one major one told me that he just doesn't have he can't spend all evening and weekends writing PAs, so prior authorization. So he's kind of limited, he's picking and choosing, but he would switch almost everybody and he thinks almost all of his patients would prefer nephi.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

And he also noted that he in his region, he's a major advisor to pediatricians and general practitioners. So he had thrown out that he advises about 100 pediatricians and a couple of 100 general practitioners that have patients that contact him with questions. And he said none of them will write PAs. They just won't do it. So allergists are more flexible to write these prior authorizations, where pediatricians just probably have less time.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

I don't know if or they're not as as equipped in their in their clinics to write prior authorization to manage it. So so he said they just won't do it until that that barrier clears. But even they're contacting him about nephi and wanting to prescribe, especially again to the children are a primary focus of a lot of these doctors right now. But we think it's pretty prevalent. There are still a few that are waiting to see some real world data and we're collecting real world data from a nephew experience that looks spectacular right now.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

And once we get to a large enough end, right now we could talk about it a little bit if you want, but we're at about seven fifty eight patients treated that have been reported from four seventy eight doctors. And the data is coming in really like it's working at least as well as injection, possibly even better. But nonetheless, once we get to maybe a couple thousand, we might do a publication of basically a letter to the editor of one of the major publications to give some data. And I think that's what a lot of them are waiting for. They're waiting to see, especially the less, let's say, academic scientific doctors that understand the data well.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

The other ones are like, well, okay, let me see it used in a bunch of patients and it's working well and then I'll prescribe. And then they all agree this is a much better profile, much better product than injection for their patients, but a lot of them still have that hesitation. So that's another one of the other two or three things we're focused on is really that access, unrestricted access, making the doctors comfortable and getting real world data for them that it's really working equal to injection. And then the third is raising awareness among the patients and caregivers that nephi is available and they can go get it unrestricted without complications or high fees. That's going to be a big initiative as well.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

And that's why we're aligning our DTC campaign with that access occurring. And some people say north of 50% is already good enough to start driving patients into the doctors. We're actually going to start that process when we're

Operator

Our next question comes from Lesley Henry Brown with William Blair. Your line is open.

Lachlan Hanbury-Brown
Biotech Equity Research Analyst at William Blair

Hey guys. Thanks for taking the questions. I guess, the first one is just, can you talk about the system that you have to go back to doctors or patients who were written a script and it wasn't approved once you get coverage with the insurer and sort of the system you haven't, maybe what you've seen from that so far as you've won? Yes. So

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

two different things I would separate. If it's through BlinkRx, our online pharmacy, then BlinkRx is obviously keeping record of all patients who were denied a prior authorization or who even filed a prior authorization. So we have all that data, and their contact information because they went through blinkRx. So as insurers are added to coverage, and we get unrestricted coverage with new insurers, they can go back and inform the patient as well as the doctor that that patient is now covered and can go back and get nephi without a prior authorization. So that's one thing I think Eric's team is doing quite effectively.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

The other is a little harder to deal with if it was a script written through a pharmacy. And of course, even if we have the cash pay in place or patient goes and they don't have that co pay assistance, you could have a lot of people walk away from the script that we don't want. We want them to go to the pharmacy and have that $25 co pay. So in that regard, we're doing a couple of things. The sales force is really tasked with informing the doctors that their patients are now covered for, let's say, United as of April 1, right?

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

So another couple weeks, if you're a UnitedHealth patient, which is about 8% of The United States commercial insurance, you can now go back and get that script again or if the script is still valid, just go back to the pharmacy and get nephi and not have to have the prior authorization. On top of that, we also don't want patients to walk away from a co pay. So if they have a with United, if they have a $80 co pay, just throwing out a number just as an example, but you have an $80 co pay for net fee with United and you don't want to pay $80 but you would easily pay $25 You have to have our coupon from our website from your smartphone to give to the pharmacist. We are now working very hard with both CVS and Relay Health to sign agreements to preload that card. So when patients and caregivers go to the pharmacy, it will be automatic that they won't have to have the coupon and if they forgot the coupons.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

And surprisingly, even somebody I know who's used nephi multiple times already, she has a lot of different allergies and she's a very smart person, very, she actually paid 200 for nephi and she had authorization. She had prior authorization approved for insurance coverage. And I was shocked and I said, well, didn't she use the coupon? And she said, and I'm like, so we we don't want that because she obviously could afford it. She didn't think anything of $200, but to to a lot of people, $200 is a barrier and we'll walk away from the script.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

So we're trying to get that done as well to make sure that it's seamless. Meaning, you get your script from the doctor, you go to the local pharmacy, you hand the script to the pharmacy or it's sent electronically, of course, these days, so you don't actually have a physical script, but, you go into the pharmacy and they just say your co pay is $25 and you walk away happy. And that's really what we're trying to get to, to make that as seamless as possible for the vast majority of the population as quickly as possible, especially going into this summer.

Lachlan Hanbury-Brown
Biotech Equity Research Analyst at William Blair

Thanks. I mean, can you comment on sort of coverage that you've won so far? Have you seen many of those scripts, for example, the ones through BlinkRx go back and get filled? Or those patients maybe when the initial script is denied, do they just get a script for an auto injector? Yes.

Lachlan Hanbury-Brown
Biotech Equity Research Analyst at William Blair

So I'll refer to Eric.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

I mean, Eric, do you have any information on that as to when BlinkRx goes back after coverage? I don't know.

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

Lachlan, we are seeing a percentage of those patients convert. We have a protocol in place, as Rich mentioned. Once we get coverage and we've been doing this over the last couple of weeks, we're reengaging those patients. A portion of those patients opted to go to the cash prescription, but the other ones were getting a nice amount of them kind of coming back and saying, okay, hey, great, now that my insurance is covering this, it's affordable. They're moving from kind of a submitted prescription that's waiting to obviously a dispensed prescription so they have.

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

So we're not only doing that, as Rick said, with Blink, but our field team is also trained to engage the doctors on all these updates, really working closely with the staff because it's they're carrying that workload too of working with the patients and going through that process. So the field team has data based on each position of what payers their patient base represents and their messaging accordingly. So we're pulling that through and driving that all those wins that we're seeing.

Lachlan Hanbury-Brown
Biotech Equity Research Analyst at William Blair

Okay, great. Thanks. I got a follow-up. Go ahead.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

No, no. I was just going to add that again, a lot of people are telling us that they're just getting if they're not covered, they're getting one now, but they want more than one prescription. So they're getting one now at the cash pay price of $1.99 and then they're waiting for coverage to for their insurer to cover Nessie so they can go back and get more because that seems to be a common strategy, common theme we're hearing from patients and caregivers that they just want the one initially. And I know we just spoke to somebody, an advocacy person in Utah, state advocacy person that's working on the legislation in Utah and her kids both have this disease and she has an FE and she was you know, just waiting for her cases, everything. She wants her kids to carry it.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Right? She wants she just loves neffy because their kids can actually carry it. So she went out and got it. And I'm sure she'll get more prescriptions. She just want wanted to get one for each of the kids initially so that they have the NFIE in their hands walking around with it and they're really thrilled about it.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

So that's the kind of feedback we get all the time, and heard from a lot of people already in that kind of mode of I'll pay for the one at the 199, but then I'll wait for insurance for more.

Lachlan Hanbury-Brown
Biotech Equity Research Analyst at William Blair

Okay, great. That's great context. And as a follow-up, you talked about how access and getting the payer coverage is really important to driving prescription because of that prior authorization burden. Can you talk about the maybe lag that you see there? I mean, how quickly when you sign a new contract or so far when you signed new contracts and got on formulary, are you able to see an uptick in prescribing over the following weeks or couple of months?

Lachlan Hanbury-Brown
Biotech Equity Research Analyst at William Blair

Or like how should

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

we think about what that sort of delay is? It's a great question because I just asked that question yesterday of my team. And I think they're still collecting the data. I don't know, Eric, if you have it, I haven't seen it yet. But the example is kind of like Express Scripts, which started now a couple of months ago, it really kind of hit with Express Scripts.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

So how are the sales going now with patients under Express Scripts versus other insurance companies, which may have only recently added nephi. So it's not the data won't be as impactful. But I don't know, Eric, do we have any sense of that yet?

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

Yes, we are looking at individual cohorts of patients based on insurance. I can tell you that the last couple of weeks, especially with like Express Scripts, we're seeing an incline there in terms of share relative to what we see in the overall average. So that's what we expect to see. And for each of those plans that we're winning, we're driving that through messaging, whether it's non personal promotion, through marketing, but most importantly through our direct efforts with our field team, interacting with doctors, interacting with staff. I would say also that it takes time when the patient comes in, right?

Eric Karas
Chief Commercial Officer at ARS Pharmaceuticals

Certain patients see their doctor every six months, others maybe every year. But when they come in, now the doctor knows that if that patient has Express Scripts starting April, that this is going to be covered without a prior authorization. So we are encouraged by what we're seeing in terms of the increases here and it does really create a nice opportunity for us over the next couple of weeks and especially going into the May back to school season with a lot of patients coming in to really drive this.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Yes. And just to add one more thing to that, I know we're actually going a little over time a little bit, but we just are now working with advocacy and on our website posting a scorecard. We wanted to wait till we cross that 50% mark, so United gets us there, but we're putting a scorecard and the advocacy groups are going to post this on their websites as well under their neffy description, where it's going to show who's covering without any restrictions, without any prior authorization, who's covering but is still requiring prior authorization. Again, I don't differentiate between the insurer that's covering with prior authorization, one that's not covering at all and then who's not covering at all. And there's two purposes of this.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

One is that, I want the patients to know they're covered and the caregivers, right, and the doctors. So the scorecard is also being shared by our sales force with the doctors. But I also want them to know who's not covering because if your insurer is not covering and you see this whole list of insurers that are and you go and call up your insurer and say, hey, why are you guys not covering this and all these other insurers are covering it? We think that puts a lot of pressure on insurance companies to cover more quickly. So that's another strategy we have to try to facilitate that by now starting to make it very public who is covering without this prior authorization requirement and who is not and we're hoping that that will also start to have some impact over time.

Lachlan Hanbury-Brown
Biotech Equity Research Analyst at William Blair

Thanks.

Operator

One moment for our next question. Our next question comes from Julian Harrison with BTIG. Your line is open.

Julian Harrison
Managing Director at BTIG

Hi, good morning. Thank you for taking my questions and congrats on all the recent progress. On the CSU Phase IIb trial you expect to initiate in the next few weeks, I'm wondering if you could remind us of the competitive positioning here and any early feedback you have on preference for episodic relief versus chronic therapies in CSU?

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Yes. Well, first of all, they're very independent, okay, because these people are all in chronic therapy, right? So you could be on chronic enthistamine, high dose enthistamine therapy or high dose Xolair and you still have flares. So what there is no current therapy for is those flares, Meaning, you're on Xolair and you're stable, but every couple of months you have a big episode where you got a couple of days to two days of severe symptoms all of a sudden and it's very, very upsetting to these people. And a lot of times they get not only the itchy and painful, but they also sometimes get angioedema, facial angioedema.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

So their lip swells up, their cheek swells up,

Ryan Deschner
Ryan Deschner
Vice President - Equity Research at Raymond James Financial

and they don't want to

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

go to work, they don't want to go out while that's happening. So the difference is you're on your chronic therapy and then you have a flare and now you can have an immediate treatment to treat that flare and resolve it within minutes and then go back and just go back to your daily life, go to work, go wherever you want to go, versus go to the hospital and get the other current ways they deal with this flare is you either just tolerate it and hope or wait for it to go away because it will go away. And you, or you go to the hospital and get IV, antistamines at very high doses tends to be effective in a lot of cases. And then the other is to take a steroid, which takes hours to take effect. Okay.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

So, nephi would provide a unique advantage of treating that acute event while they're on chronic therapy. So it's synergistic with chronic therapy. I just want to make sure it's clear that we are not intending to replace chronic urticaria therapy at all. This is a supplemental treatment to treat that exacerbation that occurs. And if you go back to the Xolair Phase three studies that were published, people on Xolair even will have three to six of these events a year.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

And then well, they actually more than three to six events, I should take that back. It was they went to the emergency room three to six times a year to treat this type of an event. So it's a pretty significant issue even on chronic therapies like Xolair. Now there are a portion of people that are just stable on Xolair, antihistamine even that never have these events, but there's a large proportion of people that have these events. So it is an unmet medical need.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

We're not proposing to replace chronic urticaria therapies. We're looking at supplementing them. Does that help?

Julian Harrison
Managing Director at BTIG

That's very helpful. Thank you and congrats again.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Okay. Thank you. Great.

Operator

And I'm not showing any further questions at this time. I'd like to turn the call back over to Richard.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

Okay. Well, I really appreciate everybody joining the call and look forward to the next conference call when we get closer to that summer period. Obviously, we think at that point, we're hoping to see a significant uptick in scripts and then going into the summer when our DTC campaign starts in May, we really start raising that awareness and we think you'll really enjoy our DTC campaign where we've been working very hard and we think it will be very, very positive shifting the thinking, shifting the paradigm towards nephie is easy to carry, easy to use and not threatening and treat the symptoms immediately and don't wait for severe anaphylactic disease. So we think that that will really shift the paradigm towards earlier and earlier use of epinephrine in order to stop the symptoms immediately when a reaction occurs. And that's really how doctors want to see epinephrine used.

Richard Lowenthal
Founder, President, CEO & Director at ARS Pharmaceuticals

So with that, I'll close the call.

Operator

Thank you. Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.

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Key Takeaways

  • Since its September 2024 US launch, Nephii 2 mg generated $7.3 million in net product revenue and secured FDA approval for a 1 mg dose serving children 15–30 kg (≈23% of the epinephrine auto-injector market).
  • As of April 1, over 51% of commercially insured patients can access Nephii without prior authorization, with an 80% no-PA coverage goal by early summer following formulary additions including CVS Caremark.
  • Executives identified the prior authorization burden—averaging only 1.3 prescriptions per PA—as the biggest headwind to adoption, predicting a prescription inflection once administrative barriers are cleared.
  • Nephii’s robust clinical and real-world program—highlighted at AAAAI and Quad AI—demonstrated safety and efficacy in anaphylaxis for adults and children, including full PK/PD bracketing in Japanese and Chinese populations.
  • With $314 million in cash and equivalents, ARS plans a $40–50 million DTC campaign starting in May and is targeting global launches in the EU, UK, Canada, China, Japan and Australia by year-end 2025.
AI Generated. May Contain Errors.
Earnings Conference Call
ARS Pharmaceuticals Q4 2024
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