ARS Pharmaceuticals' EpiPen Alternative Delayed US Approval - Two Analysts Offer Differing Views

On Tuesday, The FDA issued a Complete Response Letter regarding ARS Pharmaceuticals Inc's SPRY New Drug Application (NDA) for neffy (epinephrine nasal spray) in the treatment of Allergic Reactions (Type I), including anaphylaxis (fatal allergic reaction) for adults and children ≥30 kg. 

Wedbush analysts remain bullish on the stock with an Outperform rating, but the price target was cut from $15 to $5.

The analysts remain puzzled by the FDA's decision to go against the positive recommendation from the Pulmonary-Allergy Drug Advisory Committee, stating that neffy supports a favorable benefit-risk profile and issued a communication outlining an undisclosed deficiency last week resulting in the CRL. 

Although the CRL has pushed back the timelines for the approval and launch of neffy in the U.S., Wedbush still sees a clear path to approval in 2H 2024 with the repeat dose PK/PD study under NAC conditions as the sole gating factor. 

ARS believed that the repeat-dose NAC study would be a post-marketing requirement. 

Patient screening is already in progress, with the administration of the first dose anticipated shortly and the final patient expected to receive their dose before the end of 2023. 

Given the well-established safety profile of epinephrine, Wedbush considers the clinical risk associated with the trial to be minimal.

William Blair downgraded the stock to a Market Perform rating, noting that the Complete Response Letter would extend timelines and the heightened risk associated with conducting an extra head-to-head study.

Assessing the clinical and regulatory risks at this juncture is complex. The analyst awaits further clarity on the path forward and the availability of additional clinical data while maintaining that neffy is a notably distinct product and that ARS could establish itself as a key player in the self-administered epinephrine device market.

Price Action: SPRY shares are up 26.7% at $3.70 on the last check Thursday.