ARS Pharmaceuticals, Inc. Q1 FY2026 earnings call

Access Expansion Progress

• As of Q1 end 2026, NEFI holds ~90% commercial insurance coverage in the U.S., with 57% of that coverage not requiring prior authorization
• Florida Medicaid added NEFI to its unrestricted formulary effective July 1, 2026, bringing the total number of Medicaid states with NEFI coverage to 9; multiple additional states are progressing toward preferred formulary inclusion, with a target of unrestricted coverage in most U.S. Medicaid programs by early 2027
• An updated formulary proposal to add NEFI to CVS Caremark (covering Caremark, Aetna, and Anthem) is in the final approval stage, targeting a July 1, 2026 effective date, which would expand the share of covered lives without prior authorization to match existing epinephrine autoinjector products

Affordability Improvements

• A new point-of-sale retail pharmacy program launched in Q1 2026 caps out-of-pocket cash price for uninsured/denied-claim patients at $199, matching the existing cash price available through ARS' specialty pharmacy and telehealth channels
• The program eliminates the previous issue of patients being quoted WAC prices plus pharmacy markup (sometimes exceeding $1,000) at retail, which had created price misperceptions that deterred prescribing

Adoption & Commercial Execution

• The U.S. NEFI patient base reached ~120,000 total patients, with 29,500 new patients added in Q1 2026; over 28,000 U.S. healthcare providers (HCPs) have prescribed NEFI, with ~50% demonstrating repeat prescribing
• The sales force was expanded to 148 members in May 2026, focused on high-volume prescribing practices; new HCP support programs streamline prior authorization completion without disrupting existing office workflows
• The FDA removed the minimum age restriction for NEFI, enabling access for pediatric patients over 33 pounds and under 4 years of age; the NEFI in Schools program has recorded over 200 successful uses with positive feedback from school nurses
• Direct-to-consumer marketing campaigns target parents (the primary decision-makers for pediatric anaphylaxis treatment) ahead of the peak back-to-school prescription season; the virtual Get NEFI program enables patient access without a traditional office visit

International Milestones

• The European Commission granted marketing authorization for the 1mg NEFI formulation in March 2026, expanding access for younger at-risk children across the EU
• Health Canada approved NEFI in April 2026 as the first and only needle-free emergency anaphylaxis treatment, with commercial launch planned for late 2026 by partner ALK

Financial Performance

• Gross-to-net retention remains in the low-mid 50% range, with a long-term steady state target of ~50%; the CVS Caremark proposal aligns with this target
• Q1 2026 R&D expenses totaled $4.3 million, supporting ongoing development programs including a chronic spontaneous urticaria study; SG&A expenses totaled $72.2 million, reflecting commercialization investments, with spending now shifting from infrastructure build to optimizing high-return activities
• End-of-Q1 cash, cash equivalents, and short-term investments totaled $201 million, providing flexibility for commercial execution and pipeline advancement toward cash flow break even

ARS Pharmaceuticals only has one core commercial product segment: NEFI, its needle-free epinephrine autoinjector for anaphylaxis. In Q1 2026, NEFI generated $17.5 million in U.S. net product revenue, representing 77.1% of the company's total $22.7 million Q1 2026 revenue. The remaining revenue comes from two smaller international collaboration segments: $2.5 million in collaboration agreement revenue (11.0% of total revenue, including half of a $5 million EU approval milestone payment from partner ALK) and $2.7 million in international partner supply revenue (11.9% of total revenue). There are no other reported product segments.

• Management expects revenue to be heavily weighted toward the second half of 2026, consistent with the seasonal peak of the back-to-school prescription season and the expected contribution of newly implemented access and affordability initiatives
• Current 2026 performance is on track to meet analyst consensus revenue estimates even without CVS Caremark formulary approval; a positive CVS decision would accelerate growth further
• Management projects cash flow break even will be achieved by the middle of 2027, with operating losses expected to decrease significantly through the second half of 2026 as revenue scales
• Overall 2026 SG&A run rate is expected to be slightly higher than the second half 2025 run rate, with the May 2026 sales force expansion funded through reallocation of existing resources
• Refill contribution to total prescription volume is expected to begin scaling in the second half of 2026 and into 2027 as the initial installed base of NEFI users reaches product expiration and renewal cycles

• The CVS Caremark formulary approval timeline has been extended beyond original expectations due to PBM focus on new legislation and ongoing FTC-related regulatory interactions, creating uncertainty around the July 1, 2026 launch target
• Prior authorization requirements remain a significant barrier to prescribing: even when approval is ultimately granted, the process creates workflow friction that can deter or delay prescribing, particularly for the high-volume, quick electronic prescription model common in the epinephrine market
• Approximately 22-23% of NEFI prescriptions are currently abandoned, with higher abandonment rates for denied commercial claims that result in unexpectedly high out-of-pocket retail prices, though the new $199 cap program is expected to mitigate this risk
• Medicaid coverage expansion is still in progress, with prior authorization still required in most states, creating a barrier to access in a segment that makes up roughly 25% of the total U.S. epinephrine market

Q: What is management's level of conviction that CVS Caremark will approve the formulary proposal by the July 1 effective date, and how would this align with the back-to-school seasonal surge? / A: CVS Caremark's approval process is nearing completion. Combined, CVS Caremark, Anthem, and Aetna cover 24% of U.S. lives, and management is confident based on prior conversations that the proposal will be approved in time for July 1. The approval aligns perfectly with ongoing marketing, direct-to-consumer campaigns, and sales force outreach targeting the top 12,000 high-volume prescribers that generate 50% of all U.S. epinephrine prescriptions, ahead of the back-to-school peak.\n\nQ: What is the path to broadening prescribing beyond the top-decile high-volume practices to lower-volume accounts? / A: Prescriber base broadening is already occurring: over 28,000 total HCPs have prescribed NEFI to date, in addition to the 12,000 high-volume practices prioritized by ARS' sales force. Non-personal promotion, direct-to-consumer advertising, HCP media campaigns, and medical conferences drive awareness among lower-volume providers, and management is already seeing measurable share growth in this segment as providers gain experience with NEFI.\n\nQ: How does the new automated denied-claim conversion program operate, what is its current rollout status, and how much will it reduce prescription abandonment? / A: The program launched in early May 2026, implemented via three established vendors that cover 90% of U.S. retail pharmacies. If a commercial claim is rejected, the system automatically converts the price to the $199 maximum cash price at point of sale, so patients never see the higher standard retail price that previously caused abandonment. Currently, 55% of NEFI prescriptions go through retail, with an overall abandonment rate of 22-23%; management expects the program to meaningfully reduce abandonment, particularly for rejected claims, by eliminating negative price-related feedback to prescribers.\n\nQ: What is the timeline to cash break even, and what was ALK's royalty payment in Q1? / A: Management projects cash break even will be achieved in the first half of 2027. Q1 is historically the weakest revenue quarter for the epinephrine industry, and losses are expected to shrink significantly in the second half of 2026 as revenue scales. Spending reallocation to higher-return activities will also help reach break even. ALK's Q1 royalty payment was less than $100,000, as ALK is just beginning commercial launch activities across international markets, and royalties are expected to grow in coming quarters.