Good afternoon, everyone. Welcome to Oppenheimer's 35th Annual Healthcare Life Science Conference. My name is Andreas Argyrides. I'm one of the senior biotech analysts at Oppenheimer. And today I have the pleasure to be joined by Richard Lowenthal, President and CEO, and Eric Karas, Chief Commercial Officer of ARS Pharmaceuticals. Quick background on ARS: they are commercializing Neffy, a needle-free intranasal epinephrine spray for the treatment of severe allergic reactions, including anaphylaxis, with plans to expand Neffy into chronic spontaneous urticaria with a phase 2B study this quarter. Congratulations on the successful launch so far, and thanks for joining us today. Thank you. Maybe I'll start, well, we can start with an overview of the company and then maybe just some of the recent progress that you've made, and we'll dive into some specific questions. Sure. So ARS Pharmaceuticals, we established with the specific purpose of developing Neffy. It's a group of people that have a lot of experience in nasal delivery. Personally, I worked on, well, for many years, all the way back to when I was at FDA with Imitrex, but I've worked on a number of nasal sprays. Most recently, I helped get Narcan approved. I actually represented Narcan to FDA, did all the clinical work, and got Valtoco approved for severe acute repetitive seizures, so for epilepsy. And also worked on a number of others. Opvee, my CRO got Opvee approved and worked on a number of other nasal sprays recently. So we have a lot of experience. Eric was at Adapt, so I met him, and he was the one that launched and commercialized Narcan, so a good example of emergency medicine and converting it. And so far, I mean, the company, we had to first establish a regulatory pathway for this type of product with FDA because you can't do efficacy studies with epinephrine with severe food allergies, at least, and anaphylaxis. So we had to establish a regulatory pathway. That took some work with FDA. We now have established that and set criteria that we believe are very difficult, but we were able to achieve all of these criteria. Very positive adcom. As sometimes happens, FDA had, we just want one more thing at the end. I think if you go to the FDA press release about Neffy, and they were very, very positive and really presented Neffy in a way that we would present Neffy and the value of this product that they anticipate, which is always good to hear from FDA after they finally get to a point where they're comfortable to approve. We launched very end of September, beginning of October, we could say, right, October 1st, last week of September. Things are going very well. We had very good initial uptake given the typical headwinds of a launch. We know that we're getting access actually much quicker than we anticipated. Insurers seem to very quickly recognize the value of Neffy. We could talk more about that, but that is obviously one of the biggest hurdles after a launch is getting insurance coverage and good access. And again, that's going better than we anticipated. And we believe that sales will start to ramp up this year quite a lot. We will start a direct-to-consumer campaign in May. And that's a little bit ahead of schedule for both the reasons of having access ahead of schedule as well as having a lot more cash than we had anticipated earlier, given a very positive deal with ALK-Abelló for European and Canadian rights. So we're in a very good cash position to try to really bolster this product and move it forward very quickly. Fantastic. You covered some of the points that I wanted to ask on, but we can get into. The details. Into them more directly. So Neffy posted 7.1 million, and that sales in just 13 weeks after launch, well ahead of consensus estimates. By all accounts, very early success. What are some of the factors that are contributing to that, and how do you see the sustainability of that momentum going forward? Yeah, so I think a lot of the factors are you got a lot of people that really had a pent-up demand, early adopters that really wanted Neffy right away. And they were willing to pay cash price, sometimes even retail price, which, you know, even though we have a $199 cash price, a lot of people just paid retail. So that's how much they wanted it. They didn't even look for a discount. And so that, I think, is one piece to it. I think a lot of doctors are pretty comfortable with the data, even though we don't have—we have a Japanese efficacy study, but we didn't do efficacy for U.S. approval. But nonetheless, they think the PKPD data is very convincing. Insurance is always a headwind initially, so we anticipate first quarter to be similar to fourth quarter, a little bit better, but still similar because we still have some of the headwinds of getting insurance coverage, but that's being cleared out very quickly, and we anticipate going into a very positive summer period and really see a big uptick starting in the summer. I mean, to that point, how do you think about, and maybe help all of us understand the pattern, I guess the prescribing pattern, or how often, or if there's seasonality around when patients, parents, caregivers, they purchase an epinephrine product? Yeah, I mean, there is some seasonality to the market. It's typically in the summer. So you have a little bit of an uptick in the summer. It's about 30% of annual sales, mostly driven by kids. So mostly driven by the children. When kids are off school, they're going back to get their annual updates, doctor visits, and also update their prescription. They need a new prescription typically for school the next year, but also they just get their renewals at that point. So that drives, I think, the seasonality of this. It's mostly the kids in the summer. Okay. We conducted a survey, and it indicated strong prescriber interest, both in adult and pediatric patients. How are you seeing real-world prescribing patterns evolve, and what's the biggest driver of adoption so far? Yeah, so we see it evolving very, very well. We have our Neffy Experience program as well, which is where we're giving Neffy to the doctors to try out in the clinic so they get firsthand experience with this. That was a program we designed very early on based on recognition that doctors will want to trial it and make sure they're comfortable with it, and then they'll broadly prescribe it, right? So we wanted to accelerate that. We now have 1,900 doctors enrolled in that, so more than we expected. There's a high demand to get into that program and get that experience with Neffy. So that is really helping a lot. However, doctors are always kind of reluctant to do prior authorizations. It's a lot of work for them. It takes time, and they are picking and choosing who they're prescribing to because of the need for prior authorizations. So as we get better formulary coverage, we believe that that headwind will start to go away over time, and we'll get really well adoption, and they'll start broadly prescribing it to their patients at that point. But where they have to still do a prior authorization is work for them, and even if it takes them 10 minutes, it's still a barrier for them to prescribe at this stage. So that's the primary thing we're focused on is getting access as quickly as we can. Andreas, just to add to that too, and I think we've talked about this in the past, the sales team, the 95 reps, we've got 11 managers, we've got a virtual team. We are focused on those top deciles, seven, eights, nines, and tens to really drive adoption there. To Rich's point too, what we're seeing with the Experience program, about 75% of those physicians are writing, and they're writing more than the average. I would say the other 25% are just newly onboarded to the program. So that's really helping. And we've really started ramping up the last probably month, month and a half, more promotional programs for HCPs. We started speaker programs. 95% of those speakers are part of the Experience program. They're able to share their firsthand experience in the clinic with other physicians, which we want to build that trust and confidence to drive adoption. As you know, we'll be at Quad AI in a few weeks. That's going to be a huge conference for us. We have a product theater. We have a welcome reception, other events. We're also doing CME programs. We started one with the American College about a month ago. So a lot of education, a lot of awareness out there because, as Rich said, the payer coverage is progressing really nicely. We want to drive more adoption, broader utilization. So that lines up really nicely when we launch the DTC campaign in May. Right. Yeah, I mean, I recall quite vividly when the first CRL, that there was a sort of uproar among the parents and the community because they've been clamoring for something like this. How do you, so I imagine that there is a, I mean, I even know from personal experience as well that there are people who are parents who are running to their allergist and asking for this. So there seems to be a lot of demand. Do you see that as well? And then back to the idea of kind of converting to scripts, how would you then say that demand is being. There's an obstacle in a way to a script, given that there's some prior auths? Because I would imagine that you guys are very well. I mean, the number in 13 weeks is pretty impressive. So I can only imagine that that's going to get even better. Yeah, and we agree. I mean, we are very happy with the performance so far. But again, focused on getting the access, we're already at about 50% of commercial lives covered, and about 30% of that is Tier Two Preferred. We anticipate by the end of this quarter, we anticipate having more than 60% coverage, and then going into the summer, hopefully better than 70, closer to 80% coverage going into the summer. And the majority of that being Tier Two Preferred because even some of the companies that are covering today as non-preferred, we believe will contract to get to the preferred status before the summer. So that's really our focus because, again, even if the parent really wants to get Neffy, but their insurance won't cover it, and they have to pay a retail price of possibly $800, or they can get a $199 cash pay price, but even at $199, they may not want to get it right away. When we get that coverage and we get them down to a $25 copay, then it becomes a much easier switch for them. So in all cases, that is one of the biggest things we're focused on in order to get that coverage and get Neffy on formularies. And our contracting so far, the insurance companies are very positive, so our contracting has been very good. Our gross-to-net is about 50% on these agreements, maybe a little bit better. So we anticipate still about a 50% gross-to-net with all things in, meaning cash pay, everything combined, so we're really in a good place at that point, and again, we're really targeting towards this summer period where we go into the summer with really good coverage. Most insurance companies covering, maybe even some of the Medicare, Medicaid groups will start to cover by then and start our DTC campaign in May to lead into that summer period, so we're really focusing on that point in time to start to drive sales really heavily. Yeah, the point that Rich made too about the GTN, that also includes our DSA fees and our copay buy-down. The team has been really successful at negotiating contracts that really preserve gross to net. One of the nice things that we're seeing is that tier two, that copay buy-down is significantly less, and that's obviously a component of our GTN. So these are really good contracts. I mean, to have two of the top three PBMs already, which is really strong. Now we're starting to pull that through, as to Rich's point, as patients are coming back in for whether it's their annual appointment, they're looking to renew, or they want to kind of upgrade. It's beneficial that the doctor has that option now with reduced barriers of having access to some of these big insurers, Express Scripts, Cigna, Optum, and we're working really hard to get to CVS Caremark too, which we do expect we'd have that sometime in Q2. No, it sounds, and this sounds all pointing in the right direction here, and I'm actually getting a slew of questions from the audience here to the point where I don't know if I can necessarily keep up here on all these, which is good. I think we've gotten a lot of interest, especially since we recently initiated. Can you give us an update on the pediatric label expansion as well? Yeah, yeah. So we have a PDUFA date. FDA gave us priority review on the one milligram dose, which would be for kids 15 to 30 kilograms. It's about 15% of the market, but maybe a bigger impact than that because obviously children are early adopters of this type of product. So we're still on track to March 6, is our PDUFA date. We see no real barriers at this point. We're pretty late stage of the review process. So it should be. We see nothing that would preclude FDA from approving this on March 6 or sooner. And let me ask about the dynamic between adult and pediatric. And I won't necessarily say this is pushback, but maybe you guys can give us a sense of also where this is driven because maybe there are skeptics out there who are prescribed an EpiPen and clearly don't care. Maybe they're not necessarily the needlephobic type, but also think or question new products, whether they work or not. But how would you describe where this demand is coming from? Is it from parents? Again, for kids who can take the two milligram, but is it mostly from parents, from the kids themselves, the younger patients who are generally nervous? How would you kind of give us a sense of the dynamic? Yeah, I mean, I think so the market is roughly 50:50, right, between adults and children. Now, obviously, the new patients are more children, and the children are a little bit more compliant at renewing prescriptions because they're driven by school requirements and things like that and parents. But we are seeing a higher percentage of our prescriptions in kids, not dramatically so, but certainly more than 50% of the prescriptions are children right now. And you would expect that. I mean, when you talk about the needlephobia, it's more severe in children, and parents are more willing to switch. So we're seeing a higher percentage of children right now switching to Neffy, which is a good thing because those are the, as I said, the more compliant patients with regards to renewal prescriptions and things like that because it's driven by the parents and the need to have epinephrine for the school. So they're usually more compliant going forward as well. Eric, let me ask you this question on pricing. Maybe clarify this for those listening in. Can you kind of put this in perspective with the auto injectors and where the pricing stands? Eric, go ahead. Yeah, do you want me to take that? Yeah. So our WAC, I think we're very clear. It's $710, but we really got to focus on what does a patient pay out of pocket, right? So if you look at an auto injector right now, those manufacturers are not offering any type of copay support programs. So we have this from claims data that the average copays are around $445 for a generic auto injector. The majority of our patients, when they're covered, we're going to be buying that down to $25. And we spent a lot of time before we were approved with advocacy patients, physicians, and that's what they said. They said, "Listen, you've got to have programs out there. You got to make sure you have coverage," and that's what we're doing. The Express Scripts, Cigna, that's tier two coverage, lowest copay, and then again, we're buying it down. So we feel for a majority of patients, our programs, the copay, we'd also have a cash price of $199. So for whatever reason, if they're in a high deductible plan or it's not covered, they have that cash option. And all of these are for two doses. So we feel we've got a lot of the bases covered and trying to make it as easy as possible for doctors to write this and for patients to afford and access the product. Good, great. And then back to the direct-to-consumer campaign. We're looking forward to that, by the way. I'm curious to see how that's going to go. And I do think, even from talking to friends and relatives, that there's an immediate reaction and excitement around this. How can we think about how, and you mentioned the timing. So I guess you're looking to make sure that this is at a time when there's additional coverage, broader coverage. How should we really think about that opening up the market? How much of a catalyst is that in a way? We think it's a very significant catalyst. We think that while we had a lot of big media attention when we got approval, advocacy groups are certainly out there trying to inform people about the availability of Neffy. There's still a lot of people out there that don't know about it, that really still maybe even a majority of the population. In addition, we know that there's a large population out there of patients that are not visiting allergists, that are not prescribed epinephrine right now, who direct-to-consumer may influence to go get prescriptions from their doctors or see an allergist and get a prescription for epinephrine. So we want to be out there. We want to be informing the public that Neffy is available. We want to inform them about the benefits of having epinephrine as well. We are doing a public service announcement campaign already with FARE, the Food Allergy Research and Education, so the largest advocacy group. They're out there now working hard on the public service announcement work. That's just to raise awareness around the disease and the availability of options now that there's an option to an injector. And we'll be launching our direct-to-consumer pretty broad as well because when you think about it, if you think about the total population and the total target population, more than 40 million people with the disease, probably 20 million with severe disease that may be candidates for getting epinephrine, that probably should have epinephrine to protect themselves and to treat symptoms. When you think about that type of population, everybody, even if you don't have food allergies, you know somebody who has food allergies, or you have a child or somebody or a relative that has food allergies. And so when you have a population like that, you want really a broad audience and broad knowledge to where you may not have a food allergy, but your neighbor does, and you see the ad for Neffy, and you go and tell your neighbor, "Hey, saw this. Do you wear this?" And that's what we're really going to try to target. We'll do a lot of targeted advertisement as well, but also broad advertisement to try to raise awareness across the board. So hopefully everybody is aware of Neffy's availability. We think that'll have dramatic impact because when we survey doctors, 99% of doctors say they would prescribe it if the patient asks for it. So taking away, once you get rid of the insurance barriers and make it easy for the doctors, we believe that will start to happen as patients go in and ask for Neffy. Let me ask this question around competition that exists. So from the auto injectors, are they doing anything that you're aware of to kind of make it hard to switch? Are they taking any countermeasures that you're maybe aware of, making it maybe more affordable so that patients will be reluctant to switch if that was a consideration before? Not currently. We've not seen anything. Eric, I don't know if you've seen anything, but we have not seen any move. Even the one branded product still out there, Kaléo, they've reduced their sales force significantly, but we've not seen anything out of any of the auto injectors that make us concerned or any movement towards lowering their price or anything else. And they have a difficult time lowering their price because they're generic now and their cost of goods is much higher. So I think it's a pretty tough situation for them to lower their price, but we have not seen any move at all from any of the injection product companies. Okay, great. That's helpful. I'm sure they're monitoring closely, especially at this stage here. Let me quickly just ask a question. I know we're kind of close on time, but maybe the opportunity in chronic spontaneous urticaria, maybe give us a sense of the rationale for Neffy in that setting and then how it differentiates from other products out there in biologics. Yeah, sure. So we're going to be targeting Chronic Spontaneous Urticaria patients, although there may be some other patients that could use intranasal epinephrine. And I don't want to necessarily use the name Neffy for that indication because it will probably be a different product. We believe a lower dose will be equally effective, so we don't need the higher dose we're using for anaphylaxis. But for urticaria, the target audience here is really somebody who's on a chronic therapy. We'll do our initial studies with people on antihistamine, but there's no rationale why it wouldn't work equally well with somebody on a biologic. But pharmacoeconomic arguments are better with antihistamine patients. And what you're doing is these patients may be stable on medication, but then they have exacerbations of the disease, flares. These flares can be quite intense and last for days, and they're very upsetting to the patient. They get very severe hives and rash, and they've been stable for a while, and all of a sudden the urticaria comes back. Sometimes they go to the emergency room, they get IV steroids, they get IV antihistamines to get it under control. They can take a steroid at home that sometimes works, sometimes takes a long time to work. Epinephrine is very effective in that indication. It relieves the symptoms, as you probably saw from our initial phase two data. It relieves the symptoms in minutes. It's very, very effective at resolving the itch and hives and even any associated angioedema with the urticaria event. We believe that it would provide a supplemental treatment to the current therapies that are chronic in order to manage those exacerbations. Right now, there's nothing to use for those exacerbations. I mean, as I said, docs can use steroids. They don't like to use steroids, but they'll use steroids, but they take hours to take effect. There's nothing really that can give you immediate relief. We believe that this is a really good indication to pursue. Again, we believe a lower dose. We did not see a difference between one and two milligrams in the first study. We're going to pursue a phase 2B study with even lower doses to see really how low we can go on the dose for safety reasons. We know FDA is always concerned about the safety of overexposure of epinephrine. In a population of urticaria patients, we want to make sure we're on the very safe side of this. We believe that it could be a very large market. It could be almost equivalent to the food allergy, venom allergy market. Again, we would probably brand this differently. We may even use a slightly different looking device or a different device to make it different, but the dose would be very different. We wouldn't want to mix up the two products. We don't need blood pressure, heart rate support with urticaria where doctors want to see the blood pressure, heart rate increase, systolic blood pressure and heart rate increase with food allergy because if somebody has very severe disease, they may have hypotension. With urticaria, we don't need that effect. We really want the effect on the symptoms of the urticaria event and not necessarily have to worry about blood pressure, heart rate. So we can go down in dose, and that's what we're trying to work out in our phase II-B study. And then we know from talking to FDA, we need a single phase III study for this indication that it's considered to be the same mechanism of action as food allergies. So we're still same receptors involved, same mechanism. So we'll be able to get approval with one good phase 3 study. And the effect size is very big, so it doesn't have to be a huge study, maybe kind of minimum number of patients to get safety data, but it's a pretty big effect size. All right. And again, I have to say the most of my questions that I've gotten. So for those listening in, if I didn't get to your question, apologies. I try to ask it as best I can. I'll end on just this one last question. And this is kind of typical for investors who monitor early launches, and there are skepticisms on how that goes. Maybe can you, Richard and Eric, give us a sense of how, not to say, to allay concerns. You guys are working to make sure this is good, but there's a decent consensus number for the year, and I think that's clearly part of the consensus. I think it's achievable, and that's based on all of our survey work, our doc work. What would be a response to those who are skeptical or think that the launch expectations are too high? I mean, I think this is a—I mean, this is not a typical product. I think this is a really obvious product. I think, and there's very good precedence. So once you get past any kind of hesitancy and you get the doctors comfortable that it's equivalent, they could switch and there's equivalent effect, and you get the insurance coverage, there's really no reason why you think about a naive patient. You think about a new patient coming into the doctor with a food allergy reaction. They're getting prescribed for the first time. Doctor offers you auto injector nasal spray. I mean, what would you choose? You got to ask yourself, would I really—everything equivalent. Now we're a year, two years into this. Everybody's comfortable. Everything's working the same. Would you really prescribe an auto injector, or would you really want the auto injector? And when you think about it, it's going to take a little bit of adoption, but once we get coverage and we get through that adoption phase, I can't imagine people really want to inject themselves when they have an alternative like this. And the precedent shows that with other nasal spray conversions from either injection or rectal. Again, Narcan's a great example. The combination of Valtoco and Nayzilam in acute repetitive seizures because they launched about the same time, but combined they're more than 80% now. So it's just a natural evolution, and the injection products have been great to help people. So we don't want to put them down, but people are just scared of them. They're hesitant. A lot of people refuse to get the prescription in the first place, but carriage and delay in use is a real serious problem. So I think ultimately, while I think Neffy works the same as injection, I think it will appear to work better because ultimately people will carry it and use it more quickly. And if they use it sooner in the reaction when they're treating symptoms, the clinical outcomes are going to be better. And all the data and the literature show that. So eventually it's going to even look like it works better because people use it sooner and they're less afraid to use it. And that's really what we're after. And once we get to that stage, there's really no reason why anybody would choose an auto-injector going forward. There'll be some people that are comfortable with their auto-injectors and just want to keep it and not switch. But I think the new patients, as patients rotate and new patients come into the market and older patients leave the market, I think it will predominantly be nasal. It will switch over almost. I encourage for those who, I mean, can get access to our initiation, but also do their own work to kind of look into also some of the benefits of the intranasal versus the intramuscular injection, right? That was shown up in the PD results data as well. And those are kind of promising in terms of also differentiation and possibly being more efficacious in certain ways. And those are things that we've looked at too. So very exciting. We're looking forward to the quarterly updates to the progress on reimbursement and then also the DCC campaign. We'll follow it intently and we'll continue the conversation. If anyone has questions, please feel free to write me. If you want to get connected to the company as well, we can hyper-facilitate that. So, Rich, Eric, thank you guys for your time, and we'll see you in San Diego. Thank you. Take care.