On Saturday, Denmark-based ALK entered into a strategic license agreement with ARS Pharmaceuticals, Inc. SPRY.
The agreement grants ALK exclusive global rights to the neffy adrenaline (epinephrine) nasal spray, except in the U.S., Australia, New Zealand, Japan, and China.
In August, the FDA approved ARS Pharmaceuticals’ Neffy (epinephrine nasal spray) for the emergency treatment of allergic reactions (Type I), including those that are life-threatening (anaphylaxis), for adult and pediatric patients.
Neffy is also approved in Europe. Submission for regulatory approval in Canada is planned for by the end of 2024.
ARS Pharma is also developing its intranasal adrenaline (epinephrine) technology for acute flares in patients with chronic urticaria, with plans to begin a Phase 2b trial in 2025.
The license agreement gives ALK exclusive rights for new indications in the licensed territories.
ALK will initially focus on bringing Neffy to Europe and Canada, the world’s second and third-largest adrenaline autoinjector markets. In both markets, the product can be added to ALK’s existing infrastructure and sales channels.
The agreement also holds potential in other markets, e.g., Asia and the Middle East.
ALK estimates that Neffy holds a long-term annual peak sales potential in anaphylaxis of up to 3 billion Danish Kroner (around $430 million) in the licensed territories.
There may be substantial upsides to this potential from new indications, e.g., urticaria.
Under the agreement, ARS Pharma is entitled to receive an upfront payment of $145 million (1 billion Danish kroner) from ALK.
Furthermore, ARS Pharma may receive up to $320 million (2.2 billion Danish Kroner) related to regulatory and commercial milestones, potentially over the next 15+ years as well as tiered royalties in the teens on future sales.
ARS Pharma will supply finished goods to ALK, while ALK will be responsible for local market access, marketing and sales.
The first launches are expected to take place in Europe in 2025 once local market access negotiations are completed.
William Blair highlights that ARS Pharmaceuticals’ stock has jumped more than 200% this year but believes there is still room for more growth. The firm points to a strong launch of Neffy, which could surpass current market expectations as the main driver.
The analyst notes that survey results indicate significant demand for neffy in the near future. Early-stage payer coverage has been better than expected, supporting a solid launch through 2025. With Neffy standing out as an approved, unique product, the analyst expects a strong commercial rollout and blockbuster-level peak sales.
William Blair maintains the Outperform rating for ARS Pharmaceuticals stock.
Price Action: SPRY stock is up 4.99% at $17.89 during the premarket session at last check Monday.
Photo via Shutterstock
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