ARS Pharmaceuticals, Inc. (SPRY)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis together with our unaudited condensed consolidated financial statements and related notes thereto included in “Item 1. Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q and the audited financial statements and related notes thereto as of and for the year ended December 31, 2025 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”), on March 9, 2026. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. For a complete discussion of forward-looking statements, see the section above entitled “Special Note Regarding Forward-Looking Statements.” As a result of many factors, including those factors set forth under the caption “Item 1A. Risk Factors” of this Quarterly Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the “Risk Factors” section of this Quarterly Report to gain an understanding of the various factors that could cause actual results to differ materially from our forward-looking statements.

Overview

We are a biopharmaceutical company focused on the commercialization of neffy® (also identified in the European Union (“EU”) and United Kingdom (“UK”) by the trade name EURneffy and in China by the trade name 优敏速) needle-free intranasal delivery of epinephrine for emergency treatment of Type I allergic reactions, including anaphylaxis. neffy is the first and only needle-free epinephrine product approved by the U.S. Food and Drug Administration (“FDA”) and the European Commission, and also has approvals in the UK, Japan, Australia, China, and Canada. It is the first new delivery method for epinephrine in more than 35 years. neffy is a proprietary composition of epinephrine with an innovative absorption enhancer called Intravail, which allows neffy to safely provide intranasal delivery of epinephrine at a low dose within the exposures of approved injectable products across a range of dosing conditions (including repeat dosing and allergen challenge).

We believe there is a multi-billion dollar market opportunity for neffy in the United States. Approximately 40.0 million people in the U.S. have experienced a type I allergic reaction based on epidemiology. Of this group, approximately 21.0 million people are reported to have been diagnosed and experienced severe Type I allergic reactions that may lead to anaphylaxis. Based on our estimates, there are approximately 7.4 million patients who are actively filling epinephrine prescriptions today, of whom approximately 3.3 million fill an epinephrine prescription in any given year. As the first and only needle-free epinephrine option, neffy has the potential to become the standard of care.

In August 2024, the FDA approved neffy 2 mg for the emergency treatment of Type I allergic reactions, including anaphylaxis, in adults and children who weigh 30 kg or greater, with neffy 1 mg subsequently approved in March 2025 for patients who are four years of age and older who weigh 15 kg to less than 30 kg. In March 2026, the FDA approved updating the neffy 1 mg label to remove the age criteria so all children and adults who weigh 15 kg or more can utilize neffy 1 mg.

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Our commercialization strategy for neffy in the United States is focused on direct engagement with high-value prescribers of epinephrine, which account for approximately 44% of the total U.S. market opportunity, to drive market share growth. We believe growth in this market can be achieved through repeated interactions with prescribers regarding the treatment and prevention of Type 1 allergic reactions, including anaphylaxis, and the delayed or avoided administration of injectable epinephrine, and through efforts to convert established prescribing habits with injectable epinephrine products.

Our U.S. commercial launch is building momentum, and our launch data show meaningful physician and patient demand. More than 35,000 healthcare providers have prescribed neffy to date, with approximately 40% being repeat prescribers. Over 16,000 of these prescribers were unique additions in the second quarter of 2026, representing a nearly threefold increase over the same period in 2025. Approximately 167,000 patients in the U.S. have been prescribed neffy as of the end of the second quarter of 2026, with about 41,200 added during the second quarter of 2026. This demand has contributed to a doubling of U.S. epinephrine market share in the second quarter of 2026 compared to the same period in 2025, with total market share increasing to 5% from 2.5% and market share in field-targeted accounts increasing to 8% from 4%.

In parallel, we have secured broad insurance coverage and will continue to engage with U.S. payers, both commercial and Medicaid, with a goal of furthering expanding coverage. Currently, we have secured approximately 90% overall commercial coverage, inclusive of plans that may still require prior authorization, approximately 57% commercial coverage without prior authorization, and 9 of 50 Medicaid states cover neffy without prior authorization, including Florida, a bellwether Medicaid state that added neffy to its unrestricted formulary effective July 1, 2026. We understand that many additional states are progressing towards placing neffy on their preferred drug list.

Our U.S. launch strategy is also supported by: active participation of approximately 4,400 healthcare professionals in our neffy experience program that allows healthcare professionals to use neffy firsthand as rescue therapy for anaphylaxis during in-clinic allergen challenge as well as for the ongoing collection of real-world evidence that supports neffy’s clinical equivalence to injection; extensive non-personal promotion including medical education programs in collaboration with allergist societies, speaker bureaus, peer-to-peer programs and participation in regional and national medical conferences; engagement and contracting with payors to obtain timely coverage with favorable gross-to-net discounting, including certain pharmacy benefit managers, where the approval processes are actively ongoing for addition of neffy to their formularies without prior authorization; our artificial intelligence solution to support healthcare providers by automating the checking and writing of prior authorizations; our neffyconnect program that provides support to physicians and patients including our $25 co-pay savings card, $199 cash price available through all channels including retail via a denial-conversion system, and patient assistance programs; our neffyinSchools programs, where more than 14,000 schools to date have opted into receiving two cartons of neffy at no cost with accompanying school nurse education about neffy; multi-channel branded direct to consumer advertising including connected television, point of care, endemic and programmatic display, social media, and paid search, as well as linear television advertising; and partnerships with patient advocacy organizations including disease awareness campaigns. To reduce the time burden of an in-person healthcare provider visit, our “Get neffy on Us” program that offers patients a free visit through our virtual prescriber website, getneffy.com, along with a $0 co-pay for eligible patients with commercial insurance. We also have an ongoing U.S. post-marketing registry-based study for neffy for the treatment of anaphylaxis in oral food challenge or allergen immunotherapy clinics.

In August 2024, the EC granted marketing authorization in the EU for EURneffy 2 mg (the trade name for neffy 2 mg in the EU and UK), for the emergency treatment of allergic reactions, including anaphylaxis, in adults and children who are four years of age and older who weigh 30 kg or greater. In March 2026, the EMA granted marketing authorization in the EU for EURneffy 1 mg for children who are four years of age and older who weigh 15 kg to less than 30 kg. Through our collaboration with ALK, EURneffy 2 mg was launched in Europe, beginning with Germany in June 2025, followed by the UK in October 2025. We received approval of neffy 2 mg and 1 mg in Japan in September 2025, and neffy was launched in February 2026 by our collaboration partner, Alfresa. We also received approval of neffy 2 mg and 1 mg in Australia in December 2025, and neffy was launched in February 2026 by our collaboration partner, Seqirus. In December 2025, we received approval in China of 优敏速 (the trade name for neffy 2 mg in China), and 优敏速 was launched by our collaboration partner, Pediatrix, in May 2026. In April 2026, we received approval in Canada of neffy 2 mg, with commercial launch by our collaboration partner, ALK, expected later in 2026. neffy has already been approved or is under regulatory review in countries representing approximately 98% of the current global epinephrine autoinjector sales market.

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In addition to our neffy base business, we are evaluating our intranasal epinephrine technology known as ARS-2, as a potential needle-free, on-demand rescue treatment option for acute flares in chronic spontaneous urticaria (“CSU”). At the 2024 American Academy of Allergy, Asthma and Immunology Annual Meeting, we reported positive topline results from a Phase 2 inpatient trial in 18 treatment-refractory CSU patients that demonstrated statistically significant and clinically meaningful improvements in pruritus (itchy skin), hives, body surface area and erythema from baseline as early as five minutes after dosing. In the second quarter of 2025, we initiated a Phase 2b randomized, placebo-controlled outpatient clinical trial in CSU patients, on chronic treatment regimens, who still experience flares or exacerbations. The interim analysis population was fully enrolled as of May 2026. The timing of data collection in our Phase 2b trial is dependent on patients experiencing and documenting multiple qualifying flare episodes treated with placebo and varying doses of intranasal epinephrine. We currently expect to report interim Phase 2b data in the first quarter of 2027.

Since our inception in 2015 as ARS Pharmaceuticals, Inc., we have devoted substantially all of our efforts to commercialization activities for neffy in the U.S., pre-commercial activities, conducting product development and clinical trials, developing and protecting intellectual property, organizing and staffing the Company, business planning, raising capital, building infrastructure, and providing general and administrative support for these operations. We have funded our operations primarily with proceeds from net product sales, debt, licensing, supply and distribution arrangements with our commercialization partners, issuance of common stock, the merger with Silverback Therapeutics, Inc. (“Silverback”) in November 2022 (the “Merger”), and the private placement of convertible preferred stock. As of June 30, 2026, we had cash, cash equivalents, and short-term investments of $143.8 million.

We have incurred net losses in most years since our inception. Net loss for the six months ended June 30, 2026 and 2025 was $123.0 million and $78.8 million, respectively. As of June 30, 2026, we had an accumulated deficit of $417.6 million. Until we consistently generate positive net income, if ever, our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials, our expenditures on other development activities, the cost for regulatory filings, expenses for commercial activities to establish, maintain and enhanc

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis together with our financial statements and related notes included in “Item 8. Financial Statements and Supplementary Data” in this Annual Report. The following discussion contains forward-looking statements that involve risks and uncertainties. For a complete discussion of forward-looking statements, see the section above entitled “Forward Looking Statements.” Our actual results could differ materially from those expressed or implied in any forward-looking statements as a result of various factors, including those set forth under the caption “Item 1A. Risk Factors.”

Overview

We are a biopharmaceutical company focused on the commercialization and development of neffy (currently identified in the European Union (“EU”) and United Kingdom (“U.K.”) by the trade name EURneffy and in China by the trade name 优敏速) for needle-free intranasal delivery of epinephrine for emergency treatment of Type I allergic reactions, including anaphylaxis. neffy is the first and only U.S. Food and Drug Administration (“FDA”) and European Commission-approved needle-free epinephrine product, also has approvals in the U.K., Japan, Australia, and China. It is the first new delivery method for epinephrine in more than 35 years. neffy is a proprietary composition of epinephrine with an innovative absorption enhancer called Intravail, which allows neffy to safely provide intranasal delivery of epinephrine at a low dose within the exposures of approved injectable products across a range of dosing conditions (including repeat dosing and allergen challenge). We believe the market opportunity for neffy in the United States is significant. At the current list price for neffy and our target total gross-to-net yield, the estimated 6.5 million patients currently prescribed an epinephrine autoinjector in the United States represents an initial addressable market opportunity of approximately $3.5 billion in annual net sales, while the remaining 13.5 million diagnosed patients that have not been prescribed an epinephrine product represent an additional addressable market opportunity of approximately $7.0 billion in annual net sales.

We believe neffy’s “no needle, no injection” approach addresses a significant unmet need in the use of epinephrine. There are approximately 40 million people in the U.S. who experience Type I allergic reactions. Of this group, approximately 20 million people are reported to have been diagnosed and experienced severe Type I allergic reactions that may lead to anaphylaxis, and approximately 6.5 million of those were prescribed an epinephrine autoinjector. However, in recent years, only an estimated one-half of those consistently carry their prescribed autoinjector with them. We believe the market opportunity for neffy in the U.S. is significant. Those estimated 3.2 million patients who currently fill their active epinephrine autoinjector prescription would represent approximately $1.8 billion in annual U.S. net sales at neffy’s target estimated gross-to-net yield based on epinephrine device unit volume in 2025.

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In August 2024, the FDA approved neffy 2 mg for the emergency treatment of Type I allergic reactions, including anaphylaxis, in adults and children who weigh 30 kg or greater, with neffy 1 mg subsequently approved in March 2025 for patients who are four years of age and older and weigh 15 kg to less than 30 kg. Our launch strategy for neffy in the United States involves direct outreach to high-volume prescribers of epinephrine accounting for approximately 55% of prescriptions in the last year through an efficient sales force. As of December 31, 2025, our sales force is comprised of approximately 106 ARS Pharma employees, who serve as sales reps, key account managers, area sales managers, and national sales directors, as well as 10 virtual sales reps, and approximately 70 sales reps via our co-promotion partner, ALK U.S., who began field operations in June 2025 and will target up to 9,000 specified pediatricians and other prescribers in the U.S. We plan to expand our internal sales force to approximately 150 individuals beginning in the second quarter of 2026. For more information regarding our partners and collaboration agreements, see “Business—Our Collaboration and Licensing Agreements.”

Our launch strategy is also supported by: active participation since November 2024 of approximately 2,800 healthcare professionals in our neffy experience program that allows healthcare professionals to use neffy firsthand as rescue therapy for anaphylaxis during in-clinic allergen challenge as well as for the ongoing collection of real-world evidence that supports neffy’s clinical equivalence to injection; extensive non-personal promotion including medical education programs in collaboration with allergist societies, speaker bureaus, peer-to-peer programs and participation in regional and national medical conferences; engagement and contracting with payors to obtain timely coverage with favorable gross-to-net discounting; our neffyconnect program that provides support to physicians and patients including our $25 co-pay savings card, $199 cash price and patient assistance programs; our neffyinSchools programs, where more than 9,000 schools to date have opted into receiving two cartons of neffy at no cost with accompanying school nurse education about neffy; partnerships with patient advocacy organizations including disease awareness campaigns; and multi-channel branded direct to consumer advertising including connected television, point of care, endemic and programmatic display, social media, and paid search that initiated in May 2025, as well as linear television advertising that started in June 2025. To reduce the time burden of an in-person healthcare provider visit, we also launched a new commercial initiative in November 2025 called “Get neffy on Us” that offers patients a free visit with a virtual prescriber, along with a $0 co-pay for eligible patients with commercial insurance. We also initiated a U.S. post-marketing registry-based study for neffy for the treatment of anaphylaxis in oral food challenge or allergen immunotherapy clinics in the second quarter of 2025, which is ongoing.

The EC has granted marketing authorization in the EU for EURneffy 2 mg (the trade name for neffy 2 mg in the EU and U.K.), for the emergency treatment of Type I allergic reactions, including anaphylaxis, in adults and children who weigh 30 kg or greater and on January 29, 2026, the Committee for Medicinal Products for Human Use of the EMA adopted a positive opinion, recommending marketing authorization in the EU for EURneffy 1 mg for children who are four years of age and older and weigh 15 kg to less than 30 kg. Through our collaboration with ALK, EURneffy 2 mg was launched in Europe, beginning with Germany in June 2025, followed by the U.K. in October 2025. We received approval of neffy 2 mg and 1 mg in Japan in September 2025, which is expected to launch in the first quarter of 2026 by our collaboration partner, Alfresa. We also received approval of neffy 2 mg and 1 mg doses in Australia in December 2025, with commercial launch by our collaboration partner, Seqirus, initiated in February 2026. In December 2025, we received approval in China of 优敏速 (the trade name for neffy 2 mg in China), with commercial launch by our collaboration partner, Pediatrix, expected to start in the first half of 2026. neffy 2 mg is under review by Health Canada, with a regulatory decision expected in the second quarter of 2026 and if approved, with commercial launch by our collaboration partner, ALK, expected to start later in 2026. neffy has already been approved or is under regulatory review in countries representing approximately 98% of the current global epinephrine autoinjector sales.

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Real-world data supports that neffy delivers similar response rates as injections for the emergency treatment of Type I allergic reactions. In September 2025, we reported survey results of anaphylaxis treatment outcomes in the neffy experience program, which provides 1 mg and 2 mg doses of neffy to allergists for in-office use if patients experience an anaphylactic event during oral food challenges or allergen immunotherapy. These results showed that approximately 90% of patients experiencing anaphylaxis symptoms were effectively treated with a single dose of neffy, which is consistent with that historically reported for epinephrine injection. The results were presented as an oral presentation at the American College of Allergy, Asthma and Immunology (“ACAAI”) meeting in early November 2025 and was also published in the Annals of Allergy, Asthma and Immunology, the official peer-reviewed journal of the ACAAI, in December 2025.

We reported positive topline results demonstrating statistically significant and clinically meaningful improvements in treatment-refractory chronic urticaria patients at the American Academy of Allergy and Immunology medical conference in February 2024. In the second quarter of 2025, we initiated a Phase 2b randomized, placebo-controlled outpatient clinical trial involving chronic spontaneous urticaria patients, on chronic treatment regimens, who still experience flares or exacerbations. Interim data from this clinical trial is anticipated in the second half of 2026, followed by the potential initiation of a single pivotal efficacy study in mid-2027.

Since our inception in 2015 as ARS Pharmaceuticals, Inc., we have devoted substantially all of our efforts to developing intellectual property, conducting product development and clinical trials, organizing and staffing, business planning, raising capital, building infrastructure, pre-commercial and commercial activities, and providing general and administrative support for these operations. We have funded our operations primarily with proceeds from the merger with Silverback Therapeutics, Inc. (“Silverback”) in November 2022, private placement of convertible preferred stock, issuance of common stock, licensing, supply and distribution arrangements with our commercialization partners, debt, and net product sales. As of December 31, 2025, we had cash, cash equivalents, and short-term investments of $245.0 million.

We have incurred net losses in most years since our inception. Net loss for the year ended December 31, 2025 was $171.3 million, and net income for the year ended December 31, 2024 was $8.0 million. As of December 31, 2025, we had an accumulated deficit of $294.6 million. Until we consistently generate positive net income, if ever, our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials, our expenditures on other development activities, the cost for regulatory filings, expenses for commercial activities to establish, maintain and enhance sales, marketing and distribution capabilities for neffy, the timing and volume of our product sales, and our ability to earn potential royalties and regulatory and commercial milestones under our license and collaboration arrangements.

Until such time, if ever, that we can generate substantial product revenue, we may finance our operations through our existing cash, cash equivalents, short-term investments, equity offerings, debt financings and other capital sources which may include collaborations, strategic alliances, marketing, distribution or licensing arrangements or other arrangements with third parties. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. In addition, any future debt agreements may limit our ability to enter into certain debt financings without the consent of the lenders thereunder. On September 29, 2025 we entered into a Credit Agreement (the “Cred

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