Good afternoon, and welcome to ARS Pharma second- quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the company's prepared remarks, we will open the line for questions. Please be advised that today's conference is being recorded. I will now turn the call over to Monique Allaire, IR representative for the company. Please go ahead. Good afternoon, and thank you for joining us. With me on the call today is Donn Casale, President and CEO of ARS Pharma. Kathy Scott, our Chief Financial Officer, will join us for the Q&A session. Earlier today, we issued a press release outlining ARS Pharma corporate priorities and commercial highlights and detailing its financial results for the second quarter of 2026. That press release can be found in the Investors and Media section of the company's website at ars-pharma.com. Before we begin, please note that today's remarks may contain forward-looking statements and actual results may differ materially. Please refer to our press release and SEC filings for further risk disclosures. With that, I'll turn the call over to Donn. Thank you, Monique, and good afternoon, everyone. It's an absolute honor to host my first earnings call as CEO. This is a pivotal time for ARS Pharmaceuticals, and I look forward to sharing my strategic vision today, along with the corporate priorities that will drive our next chapter of growth. Over the past month, I've conducted a deep review with our commercial, clinical, and corporate teams and met with many of our investors and shareholders. Those conversations confirm both the significant market opportunity ahead and the need for a disciplined operational approach going forward. Today, I want to walk you through how I see the business, what's working, what's changing, and what to expect from ARS. What I'm outlining is more than a shift in our commercial strategy. It is a fundamental change in how we manage our business and allocate capital. Against that backdrop, I'm laying out three strategic priorities that will guide our next phase. First, targeted provider commercial execution. We are prioritizing our resources and focus where they make the greatest immediate impact on neffy market share, the healthcare provider. Second, financial discipline. We are implementing a rigorous strategic cost optimization framework, significantly reducing SG&A expense with a focus on building a profitable neffy franchise with a predictable path to cash- flow breakeven. Third, pipeline expansion, starting with chronic spontaneous urticaria, or CSU. We are extending our intranasal epinephrine platform into a second large market, where we see significant opportunity to bring the first FDA-approved treatment for CSU acute flares. CSU addresses a critical unmet need and offers a compelling market expansion opportunity. Let me expand on the first strategic priority in more detail. Targeted provider commercial execution. Neffy should be the standard of care in this multi-billion dollar market. Our primary objective is to increase market share, which we believe is the best indicator of commercial success for a product like neffy. Starting this quarter, we will report on both total market share and share within our field- targeted call universe so you can track our progress directly. To level set where we are today, second quarter U.S. net product revenue was $26.2 million, and total U.S. market share reached 5%, doubling from 2.5% in the same period last year. Importantly, within our field sales targeted universe, market share increased to 8%, up from 4% in the prior year quarter. Additionally, we saw over 16,000 unique neffy prescribers in the second quarter, representing more than a threefold increase from the same period last year. Neffy is an acute, life-saving rescue therapy. Unlike a traditional product that a patient takes to treat a condition, neffy is prescribed, filled, and carried long before an event ever occurs. In commercial terms, this is more like a prevention-based market versus a treatment market. That distinction is critical. In a treatment market, a patient is symptomatic and actively seeks immediate relief. In a prevention market, patients and providers default to the status quo unless there's a compelling reason or need to change. At launch, ARS invested heavily in broad direct consumer digital advertising. While that builds brand awareness, consumer advertising in a prevention-based market carries a high cost and does not always convert to utilization. Today, millions of patients remain inadequately protected, either because they were never offered a prescription or due to the fear or hesitation of carrying traditional needle-based injectors. That is the exact clinical gap neffy solves. Closing the gap relies less on broad consumer awareness and far more on changing long-established provider prescribing habits. Going forward, we have an opportunity to drive market share growth with a more efficient commercial strategy, but not at the expense of revenue. We are prioritizing our investments where they deliver the highest return. Our sales team is calling on high- volume locations to build provider conviction office by office. Our data highlights the impact of field engagement. Where our sales team is deployed, neffy has an 8% market share compared to approximately 1% in the non-targeted universe. Growth in this market is won through repeated high-quality clinical interactions, not through a single promotional campaign or market event. On the topic of reimbursement, we will continue to aggressively work towards expanding commercial and Medicaid coverage. Securing formulary position is the first step. Beyond that, providers must appreciate and acknowledge the clinical gap neffy fills before coverage translates into prescriptions. Building that provider conviction is our highest operational priority. Executing this strategy requires leadership that understands the nature of a prevention-based market and what it takes to change prescriber behavior. That's why I'm thrilled to welcome Meg Smith to ARS as our new Chief Commercial Officer. A dynamic commercial leader with over 25 years of executive experience, Meg brings a proven track record of combining disciplined investment with deep operational accountability. Having worked closely with Meg during my time at Dynavax, I saw firsthand her inspirational leadership and operational rigor. She brings the exact playbook needed for this market, and I'm confident she'll hit the ground running, leading this next chapter of the neffy launch. In addition to strengthening our commercial leadership, we have completed the expansion of our field sales organization. Salesforce efforts will focus primarily on the highest- value prescribers, which represent 44% of the total market opportunity. I look forward to seeing what our now fully deployed, highly motivated, and focused sales team can do going forward. Looking ahead, we expect steady market share gains over successive quarters, not an overnight spike. We are focused on driving the next phase of growth with disciplined commercial execution, clear accountability, and prudent expense management. That brings me to our second strategic priority, financial discipline and greater OPEX control. Our total revenue in the second quarter was $33.7 million, reflecting a combination of net product, collaboration, and supply revenue. Total operating expenses were $95.1 million, which included $12.8 million in cost of goods sold. As discussed, our prior commercial strategy emphasized broad consumer awareness, which was costly, resulting in an SG&A spend of approximately $77.6 million for the second quarter. It is critical that we adjust our operating expenses to align with neffy adoption to build a durable, profitable business. To get there, we will plan and spend based on reasonable expectations and more efficient commercialization efforts. To give a clear baseline for our future runway, we've adjusted our aggregate SG&A and R&D expenses for the second half of 2026 to be in the range of $114 million- $126 million, which includes stock-based compensation of about $14 million- $16 million. As a result, total cash- based SG&A and R&D expenses for the second half of 2026 are expected to be in the range of $100 million- $110 million, driven by a more than 40% reduction in cash-based SG&A expenses from the first half of 2026. Importantly, we expect this spending trend to continue throughout 2027. We believe this operational rigor is what makes our outlook predictable. We ended the second quarter with $143.8 million in cash equivalents and short-term investments. With that capital, alongside our revised expense base, we see a path to cash flow breakeven by the end of 2027, which would position neffy to be a foundation for long-term optionality and future value unlock for our shareholders. Part of that value unlock will come from our third strategic priority, advancing our CSU program and maximizing the opportunities with our intranasal epinephrine platform. Beyond our foundational business with neffy, we believe we possess a compelling upside with our CSU program. Personally, I'm very excited about this opportunity. To start, we previously projected a data readout from our phase II-B trial by the end of this year. While enrollment in the interim patient population was recently completed, the design of this trial required a patient to experience and log three separate flare episodes, treating them with placebo and varying doses of intranasal epinephrine. Given the real-world time required for patients to complete all three episodes for valid data collection, the interim readout is now expected in Q1 2027. This modest change in timeline does not change the value of this program. CSU is a meaningful market with a major unmet public health need. There are currently no FDA-approved on-demand products to manage acute CSU flares, representing a clear expansion opportunity. Epinephrine's role in rapid systemic symptom relief is well established. The challenge in the past has never been the molecule. It's been the delivery mechanism and the dose. This is where our intranasal technology changes the dynamic, delivering rapid, non-invasive relief during acute flares. Because we can leverage our existing commercial infrastructure and overlapping targeted prescribers, this program could represent a high- margin growth driver built entirely on top of our neffy foundation. We look forward to updating you in the future on this exciting program. In closing, our strategic priorities for the next phase of ARS are established, and the baseline for how we operate will be defined by discipline, provider-targeted commercial strategy, and strong financial stewardship. We believe that doing this well yields a profitable company built on a durable, recurring neffy franchise with additional upside driven by our CSU program. That is the business we're out to build and why I'm excited about our future. I look forward to updating you on our progress in the quarters ahead. With that, we'll now open the line for your questions. Thank you. Thank you. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Josh Schimmer of Cantor Fitzgerald. Your line is open. Great. Thanks for taking the questions and for articulating your views on the outlook for the franchise, Donn. A couple of quick questions. Maybe you can discuss both the gross- to- net in the quarter, how that's been evolving, as well as the product margins and the cost of goods that look like those ticked up this quarter, and what might have driven that and what you envision going forward. For the field-targeted accounts, maybe you can talk a little bit about what you think the company can do going forward to really get that 8% penetration up substantially higher. Thank you. Hey, Josh. Hey, thanks for your questions. I'll start with both gross to net and gross margin. I'll have maybe Kathy add a bit more color to that. But as it relates to gross to net, we anticipate ebbs and flows as it relates to gross to net, depending on the mix of different various segments each quarter. But that being said, we're comfortable in the range of 50% or approaching 50%. Importantly, though, when we look ahead in some of the forward-looking guidance as it relates to cash flow break- even, as well as net franchise profitability, we're really satisfied and comfortable with the gross- to- net that we have currently. In regard to gross margin, certainly, we anticipate that to continue to get more favorable over time. But, Kathy, would you mind maybe adding a little bit more color as it relates to the gross margin? Sure. Hi, Josh. Our gross margin was about, excuse me, 62% in Q2 and a little over 64% year- to- date. That was lower than we project going forward for a few reasons. One is the establishment of some reserves for short-dated product, some manufacturing inefficiencies as we continue to scale production, and costs for the ex-U.S. product launches. We do expect our gross margin to improve over time, and really as we get into 2027, as we streamline and grow our manufacturing. Got it. Thank you. Josh, regarding the 8% market share and certainly the increase from a year ago of 4%, we are excited. One of the areas that we believe is going to continue to help support market share growth is we have completed the expansion of our sales team. It is fully deployed, and so we have an opportunity to leverage that moving forward into Q3. That is something that we are very excited about. Ultimately, at the end of the day, we know when we send in our field team, we can increase market share. That, coupled with, we will continue to evolve our messaging campaign. We think there is an opportunity to continue to engage not only the physician, but the nurses and the MAs to really get them to stop and think about the consequences of inaction. Our messaging campaign will continue to evolve. Ultimately, it is blocking and tackling execution provider by provider in these types of entrenched markets, which we believe will continue to drive market share, which ultimately underpins our confidence around neffy profitability. Thanks very much. Good luck. Thank you, Josh. Thank you. Our next question comes from Ryan Deschner of Raymond James. Your line is open. Hi there. Thanks for the question. Two for me. The first, how are you thinking about the progression of payer access going forward, and how critical to your new strategy is getting on Caremark's formulary in the next cycle? Regarding DTC, can you give us a little more color on what specifically the new sort of strategy for DTC will look like going forward in terms of channels, media, and spend, and how this will be different from the previous strategy? Thanks. Sure. Thanks, Ryan, for the question. First, with access, we will continue to engage and work towards reducing friction. Obviously, access is important. It is a key first step. But we believe the second step, around provider conviction and ensuring that they essentially have the reason to change, and working with providers to change, is going to be critical as we move forward. There is coverage currently, 90% commercial coverage, 57% without a prior authorization. But with that, we do believe, again, we are going to have to continue to work on provider conviction because our strategy has shifted from consumer and activating the consumer to really activating the provider, which allows us to be much more efficient in our model. And we believe there is a recurring opportunity moving forward with that. As it relates to DTC, obviously when we launched, we had significant DTC, which is linear TV, closed-circuit TV. It drove a lot of awareness in the marketplace, and that awareness still exists today. But as we look ahead, we are looking towards more efficient consumer campaigns and media spend. That is going to be around traditional channels such as social media, search, those types of channels, which we believe are much more efficient. We will use those same channels, quite frankly, for providers as well, which allows us to be more targeted given the provider universe. But there is a pretty significant shift away from this broad-based DTC, which has enabled us to be much more efficient on our SG&A, which we reported today. Thank you. Thank you very much. Thank you, Ryan. Our next question comes from Roanna Ruiz of Leerink Partners. Your line is open. Hi, everyone. A couple of questions from me. First, could you talk about the path to cash- flow breakeven into 2027? Maybe elaborate on what assumptions are baked into that goal. Are you also considering things like the back-to-school potential tailwind for neffy next year? Sure. Regarding the cash flow breakeven comment, we are certainly comfortable with that statement. A big part of that is being driven around our spend and being more efficient on our spend. As we shared, our SG&A was reduced by over 40% from the first semester to the second semester. Importantly, that trend continues throughout all of 2027. So we have a much more efficient, effective spend on SG&A. So that is certainly a big underpinning of that confidence around breakeven. Also, as we look at revenue, as I said earlier about gross- to- net and some of our other assumptions, we feel very comfortable in continued revenue gains and market share gains quarter-over-quarter, year-over-year, which will also underpin our path to profitability and cash flow breakeven moving forward. Got it. A quick- On back- to- school, again, on back- to- school, obviously Q3 is the busiest quarter. The strategy stays the same. It is around engaging providers and driving awareness and conviction for change with those providers. Q3 just offers more volume relative to the other quarters, as we all know. Our strategy will stay the same, so obviously we anticipate more prescriptions in Q3 relative to other quarters because of back-to-school. Makes sense. A quick follow-up. Also wanted to ask, you seem to be talking about meaningfully changing provider prescribing habits and that kind of your overarching strategy going forward. Could you elaborate a bit more, like what particular habits that you want to break? Any sort of education or detailing that your new field force might want to look at? Yeah. The habits we are trying to break is this entrenched behavior for decades long of using auto-injectors, and that takes time. In these prevention- type of markets where providers are doing the same thing over and over, we believe a high level of frequency with the right message at the right time will break those habits. Our job, quite frankly, is to get our providers to stop and think about the problem that is in front of them. Once there is an appreciation around the problem, the solution becomes obvious, and that is really the strategy. So when we talk about the habit of a provider, the fact is they are writing the same thing and not thinking about the consequences of that action. That's where the field team comes in to really tell the story and sell the story on the value proposition of neffy, as well as the problem that neffy solves for. That takes time, and that's why when we think about looking forward, we believe there's a very methodical increase quarter-over-quarter of both revenue and share gains, and it's going to be provider by provider. But we're really excited about the fact that we have the full team in place. Execution and fundamentals is what's going to be what changes this. Makes sense. Thanks. Thanks, Roanna. Thank you. Our next question comes from Lachlan Hanbury-Brown of William Blair. Your line is open. Yeah. Hey, thanks for taking the questions. Donn, you've talked about focusing on the prescriber engagement. The obvious outcome of that is scripts and revenue. I'm wondering if there are other metrics that you can look at in the interim. You just said that it takes time, obviously, to change these behaviors and grow market share. Are there other metrics of prescriber engagement you can look at beyond just scripts that may help you evaluate how the current strategy is going? We'll certainly look at, obviously, the best indicator is scripts and market share, and that's going to be an important metric. As I said earlier, we're going to share every quarter so you can track our progress from a year-over-year perspective. We're going to look at activity and where we look at frequency. Again, it's going to take multiple calls on not only the physician, but the nurse, the MA, the total office. We'll look at the types of activities we do that seem to drive different types of behaviors and outcomes from a script perspective. It is going to come down to, again, some of the basics around frequency, the right message with the right targets over time. We'll continue to monitor that. We have a blueprint, and we certainly have seen where we deploy the team, we see significant changes in market share. As I said in the prepared remarks, we have 8% share in that total field- targeted universe versus a 1% share where we don't send our team. That gives us a lot of confidence to continue with this strategy and focus on execution. Got it. Thanks. Maybe the second one, I did see in the 10-Q that you entered into a license agreement in July for worldwide rights to certain IP. Anything you can say on that? Is that a potential pipeline expansion opportunity? Yeah, it's really kind of an opportunity for us to think about a line extension and give us some opportunities for our pipeline. Too early right now to comment on it. But right now, it's an opportunity for us to think about line extension for the franchise. Got it. Thanks. Thank you. This concludes our question- and- answer session and also today's conference call. Thank you for participating, and you may now disconnect.