ARS Pharmaceuticals, Inc. Price & Performance (SPRY)

Earlier today, we issued a press release outlining our fourth quarter and full year 2024 results along with recent business highlights. You can find this press release on our website at arspharma.com. Our call today will proceed as follows. Rich will provide an overview of our corporate progress, and key development insights into the nephew launch. Eric will discuss nephews ongoing and plant commercialization efforts in The U. S. And our market strategy Cathy will then provide a financial overview. After which we will open the call for questions. Before we begin, please note that today's discussion includes forward looking statements based on our current expectations. These statements are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to our earnings release issued today for further details and a discussion of risks. With that, I'll turn the call over to Rich.

Thank you, Justin, and thank you to everyone dialing in today. The past six months have been extremely productive for ARS. Since September, we have successfully launched Nefi two milligrams in The United States and secured FDA approval for the one milligram Nefi dose for patients weighing fifteen kilograms to less than thirty kilograms. The population of children at this lower weight range that will use nefi one milligram represents twenty three percent of the current auto injector market. ARS has also made significant strides in payer coverage. With over 51% commercially insured able to get nefi without a prior authorization as of April 1, and we anticipate over eighty percent without prior authorization by early this summer with the addition of Nefi to the Caremark formulary. Our commercial execution has established a strong of healthcare provider awareness for NEPHY as a compelling alternative to traditional epinephrine auto injectors. Providing patients with a needle free, portable, and highly effective option for severe allergic reactions including anaphylaxis. The U. Epinephrine market represents a $3,000,000,000 in annual net sales near term addressable opportunity among 6,500,000 patients prescribed epinephrine in the last three years with an additional expansion opportunity among untreated patients of over $7,000,000,000 in annual net sales covering estimated twenty million patients that have been diagnosed with severe allergic reactions based on claims data.

However, only three point two million patients consistently fill their auto injector prescriptions leaving a vast population without protection. Nefi directly addresses this gap by eliminating barriers as the needle anxiety and portability challenges. Just a few weeks ago at the twenty twenty five American Academy of Allergy, Asthma and Immunology Annual Scientific Meeting we showcased nine presentations on the continuously growing body of clinical evidence demonstrating the therapeutic value of Nefi to healthcare providers. Notably, among the presentations at the Quad AI meeting, a study in Japanese patients experiencing anaphylaxis symptoms after oral food challenge found that patients receiving NEPHY experienced low symptom scores within ten minutes compared to traditional intramuscular injection. A separate set of clinical studies and China reinforced the bracketed pharmacokinetics and pharmacodynamic profile of Nefi in persons with pure Chinese ethnicity demonstrating its efficacy and safety under a variety of conditions including self administration, allergic rhinitis, infectious rhinitis, and allergy challenges and repeat dosing. An additional analysis confirmed that NEFI is safe and achieves effective exposures of epinephrine for patients four years of age and older. And weighing fifteen kilograms to less than thirty kilograms. I'm proud of these data we presented at the Quad AI meeting as it showcases Nefi's extensive and rigorous clinical development program.

Nepi remains the only approved product to have generated anaphylaxis efficacy data in a clinical study. To have met the bracketing criteria established by FDA for approval of all key pharmacokinetic parameters to ensure safety and efficacy. And to have data demonstrating that it is well tolerated in children down to kilograms body weight to account for almost half of the patients prescribed This and other extensive clinical data we have presented on Nephi's profile has now been supported by the growing real world data of treating anaphylactic reactions from our NEPHE experience program. The data from the NEPHY experience program to date is numerically better than that historically reported with epinephrine injections. We plan to share additional details of this survey of our nephew experience program once we have completed the survey and plan to repeat this several times during the program as it progresses with over 2,500 clinicians having Nefi for oral food challenges and immunotherapy treatments. At Quad AI, hundreds of physicians shared with us many of their positive success stories of treating patients with Nefi, including cases where patients had been rescued by nephi from even having very severe anaphylactic reactions and being unconscious. Physicians are clearly and enthusiastically communicating to us that they believe that represents a new standard of care.

We have established a strong initial commercial trajectory in The U. S. To ultimately deliver on this expectation and establish NEFI as the new standard of care. Since the initial launch in September of twenty twenty four, Nepi generated $7,300,000 in net product revenue in The United States, reflecting a strong early adoption since it became available in the fourth quarter and strong breadth of early prescribing with thousands of healthcare providers prescribing nephi reflecting the allergy community's confidence in nephi as an alternative treatment.

That said, as you can see in the IQVIA prescription data, we are still on the early part of the S curve of what we anticipate to go into a multibillion dollar blockbuster peak sales trajectory. We anticipate a significant inflection in both the depth as well as the breadth of healthcare provider prescribing later this year as the headwinds from the need for prior authorization requests diminish. Healthcare providers consistently tell us that the current levels of Nefi prescribing represent only a fraction of their intended use of the product in the future. In fact, one leading allergist stated that he intends to switch all of his 4,000 patients but our data shows that this doctor has only prescribed to about one percent of their patients to date given the need for these prior authorizations to get approval. A key learning in the Nepi launch is the unique administrative barrier that prior authorizations posed for NEFI due to the large volume of epinephrine eligible patients. As well as the acute nature of this disease, This results in the need for a very large number of prior authorizations to get a significant revenue. Given each prior authorization translates to an average of 1.3 prescriptions per patient to date.

As a result, healthcare providers only have bandwidth to prescribe very selectively due to the cumulative time required to prepare prior authorizations even with simplified forms and ARS facilitation through BlinkRx. Based on this feedback from hundreds of prescribers, including most most recently at the Quad AI meeting, we expect to see a tipping point in the NESE trajectory as we obtain our payer coverage goals early this summer and make prescribing more seamless for physicians. Our payer engagement strategy has already yielded multiple favorable coverage decisions, including the cent the group purchasing organization for Express Scripts one of the three largest pharmacy benefit managers in The United States, put Nefi on formulary within ten weeks of launch. In the last month, we also have signed contracts and provided patients with unrestricted access to NEFI two other group purchasing organizations. MSR and Zynq, at terms that preserve our greater than 50% gross to net yield. MSR signed an agreement in February adding Nephew to their formulary, which now gives patients who have OptumRx access without any restrictions. As of April 1, UnitedHealthcare will also add nephriate to their formulary with unrestricted coverage. Under the MSR agreement. Just the past few days, we also obtained agreement and coverage with ZYNK.

Which provides access to the largest payer in The United States CVS Caremark, as well as Anthem, Aetna, and several other insurers. We anticipate being on formulary for CVS Caremark, Anthem, Aetna, and others by July 1 in time for the summer peak prescribing season for children. Therefore, we remain on track for 80% unrestricted commercial coverage by the summer of this year. We have also made progress on Medicaid, with bellwether states such as Texas, Alabama, and Montana adding nephi to their formularies without prior authorization. And other states are expected to follow suit in the coming months leading into the summer prescribing season for children. By the summer, we anticipate physicians to freely start writing NEFI for their patients without being deterred by the administrative workload of prior authorizations. This will be in time for the back to school season driven by the pediatric population and will also be supported by the fact that we will have one milligram Nefi in the marketplace by May 2025, which represents twenty three percent of all prescriptions as mentioned earlier. And having ended this year, with over $314,000,000 in cash or cash equivalents, We are in a strong financial position to accelerate adaptation and awareness during the back to school season, including an extensive direct to consumer campaign we anticipate launching in May of twenty twenty five.

In parallel, we are also on track to have a global commercialization footprint with Nefi within one year from now. As a reminder, your NESE equivalent of Nefi in Europe, is approved in the European Union. Our U. K. Regulatory submission is under review with a decision expected by May 2025 and our partner ALK Abello is preparing for commercial launch in Germany and UK by this summer. Regulatory submissions are also completed in Canada, China, Japan and Australia with decisions in Canada, China and Japan anticipated by year end of twenty twenty five. As we look ahead, physicians and patients demand is clear for Nessie. We are also getting favorable payer formulary coverage which is now just a function of time with the three major GPOs signing agreements that are favorable and give us a 50% gross to net or better. We are also accelerating our marketing and investments in direct to consumer advertising prior to the back to school peak prescribing season. We expect to see significantly broader and deeper adaptation and nephi across the board, through conversion of the existing epinephrine users reactivation of patients who previously avoided treatment due to their fear of injection, and bringing Nefi to those who didn't have a prescription or diagnosis in the past.

Let me turn the call over to Eric to walk through our commercial highlights and plans for increasing adoption and use of nephi in 2025.

Good morning and thank you, Rich.

As we've laid out previously, our NEPI commercial strategy is focused on three core areas. Physician education and engagement to drive NEFI adoption and market share payer coverage to ensure affordability and access to NEFI. And patient awareness and education to encourage adoption and prompt patients to ask their healthcare provider for NEFI. Our team is executing very well against all three of these. To date, our sales team has directly engaged with approximately 9,000 healthcare providers. Additionally, more than 4,000 healthcare providers have submitted NEPHI prescriptions through BlinkRx by NEPHI Connect. Importantly, approximately 81% of these prescriptions were submitted by physicians the highest decile of allergists. These are physicians who represent the highest volume prescriptions in The US. At the recent Quad AI meeting, we met with over 1,000 physicians and the feedback across the spectrum of stakeholders continues to reinforce the enthusiasm for a needle free epinephrine treatment and the growing demand for nephi. Among the physicians that the team engaged at the conference, the feedback regarding the product was overwhelmingly positive. Many HCPs who have used nephi in a clinical setting as part of the experience program shared their experiences. One particular influential physician is a thought leader amongst his peers had his first experience with NEPE just two weeks before the conference.

He was so impressed with the response which appeared within a minute, that he shared his experience with his colleagues and nursing team. Allergists have reported great real world success with response rates similar to or even better than those historically reported with epinephrine injection products. As of today, approximately two thousand five hundred have enrolled in our NEPI experience program. And as shared, it allows for hands on clinical use and real world validation of the product. This participation represents over eighty percent of the healthcare professionals conducting allergy challenge studies, reflecting a strong interest in NEPI. Our commercial team is actively sharing this information with both NETI experience participants and healthcare professionals more broadly. Which reinforces their confidence in NEPHI's clinical profile back backed by real world response data.

We have observed strong adoption by payers, with positive coverage decisions from major organizations such as Express Scripts, Cigna, Optum, Navitas Health and TRICARE. The coverage enhances access to NEPI for millions of commercially insured patients across the nation, Furthermore, starting April 1, UnitedHealthcare will include NEPI as a covered treatment without a prior authorization. In addition, all three group purchasing organizations have signed contracts with Ascent in late Q4 of last year and zinc and MSR in the last few weeks. And we expect downstream payers of these GPOs to adopt the negotiated terms add NEFI to the formularies with unrestricted access. Payers recognize the added value that NEFI offers by lowering barriers to to prompt epinephrine use. Leading to better outcomes for patients and reduce healthcare costs. Our goal is for NEPI to achieve more than 60% commercial coverage by the end of the first quarter. Given our current position, we are confident in our ability to reach this target. We are actively engaging in discussions and contract negotiations with additional key payers. Expect to achieve 80% commercial coverage by the early part of the third quarter. As commercial coverage increases, the product acquisition process is streamlined allowing doctors to more easily send prescriptions directly to retail pharmacies such as CVS and Walgreens.

For patients with commercial insurance, our co pay assistance program has made NEFI more affordable. Most commercial patients only pay $25 for each prescription, which is lower than the average co pay of $40 for a generic auto injector. Our copay support is automatically applied at the point of sale, ensuring that NEFI is accessible to more patients. Switching gears, we are also proud of our NEFI in Schools program, which provides K-twelve schools with two cartons or four single use doses of NEFI at no cost. This initiative aims to promote widespread adoption of the product in schools nationwide. To date, more than 5,000 nurses have participated in our educational sessions and are now advocates for NFI. We greatly appreciate the collaboration with school nurses, who play a crucial role in safeguarding children by administering this easy to use needle free epinephrine device in emergencies. As we look ahead, we are planning a large scale direct to consumer advertising campaign starting in May, This is time for the peak prescribing season during the summer. This campaign will include connected television platforms such as Hulu, Netflix, and Prime, as well as linear TV focused on news and sports channels. In addition, we'll utilize print and social media incorporating influencer partnerships with a combination of broad and targeting advertising strategies.

This initiative is crucial because our market research indicates that when a patient requests NEFI, physicians will prescribe it, provided there are no market access barriers. We also recognize that the epinephrine market has been highly responsive to promotional efforts in the past. And we have seen no meaningful promotion in the last decade. We are planning additional near term commercial initiatives specifically aimed at the pediatric population. Targeting both healthcare providers and caregivers. We plan to share more details about these initiatives in the coming weeks. The pediatric population significantly contributes to the summer peak in prescriptions observed in the market as schools prepare to reopen. We believe we are well positioned to take advantage of this seasonal trend especially since early adopters of NEFI are parents children who are affected. The recent approval of the one milligram dose will allow us to access the entire school age population. We also plan to continue collaborating with our advocacy partner running PSA campaigns as well as other institutional partners to create a total surround sound environment for an EPIC. Finally, as the year progresses, we'll evaluate further expansion of our sales team by early twenty twenty six. Maximize healthcare provider engagement and drive market share.

After spending several months on the front lines with our sales team, and meeting with hundreds of prescribers, has become clear that Nefi has a compelling clinical profile that resonates with both physicians and patients. This has been further validated by the successful treatment of patients with allergic reactions as demonstrated in our NEFI experience program. All indications show that physicians are eager to prescribe NEPHY more frequently, and we understand the steps needed to remove the obstacles they face. We are excited to unlock the demand for NEFI in the coming months by ensuring a more seamless insurance experience.

And driving patient demand through our comprehensive DTC campaign and our sales and marketing efforts. Let me now pass the call over to Kathy to talk through our financials. Thanks, Eric. We reported our Q4 and full year 2024 financial results in a press release this morning, and I'll walk through some of the highlights. In terms of sales, we're proud to have recorded 6,700,000.0 in net sales for the fourth quarter of twenty twenty four. And $7,300,000 for the full year 2024 since our launch in late September. Of note, these revenues are slightly higher than the preliminary numbers that we announced mid January. Before turning to our revenues, I'll take a minute to explain how we're treating the cash proceeds from our ALK licensing agreement that was signed in November 2024. As a reminder, received a nonrefundable upfront cash payment of $145,000,000 from ALK. In Q4, only $73,500,000 of that payment was included in our revenues. The remaining $71,500,000 is treated as a liability on the balance sheet due to GAAP accounting treatment. Specifically, 69,400,000.0 is treated as a financing liability and 2,100,000.0 is treated as a contract liability for future performance obligations. This GAAP accounting treatment is because of a specific term of our licensing agreement that we built in to maintain strategic optionality for the future.

The agreement ensures that ARS has the option to repurchase rights for certain regions partnered out to ALK. Results in our not being able to account for a portion of the cash proceeds as revenue. So, while the business and economic intent is that of a licensing agreement, due to the open ended flexibility of the reacquisition language, GAAP treats cash flows from these certain territories as a financing agreement that shows up on the balance sheet impacting our reported revenue figures. To reiterate, there is no impact on the amount of the non refundable cash proceeds received and we have sole discretion in how they are used. Going forward, none of the financing liability from the AL agreement that appears on the balance sheet as of 12/31/2024 will be included in revenue until the expiration of the ALK agreement. We expect to receive $5,000,000 in cash proceeds from milestones under the ALTA agreements in each of Q2 and Q4 twenty twenty five. Approximately half of each 5,000,000 payment will be recognized as GAAP revenue. The other half would not be recognized as GAAP revenue but would be added to the financing liability on the balance sheet. Future royalty payments from ALK would be recognized as GAAP revenue if they are related to the territories that are not subject to the repurchase right.

Royalty payments related to territories that are subject to the repurchase right would be capitalized and added to the financing liability on the balance sheet. To summarize our 2024 revenues, total revenue for the fourth quarter of twenty twenty four was 86,600,000.0 which included $6,700,000 in net product revenue from net fee sales in The United States 73,500,000.0 in collaboration revenue from ALK, dollars 6,000,000 in collaboration revenue our licensing partner in Japan, and 400,000.0 in revenue from supply agreements. Full year 2024 revenue totaled 89,100,000.0 reflecting $7,300,000 in NEPI sales in The U. S. Dollars 81,500,000.0 in collaboration revenue, and $400,000 from supply agreements. The Q4 and full year 2024 revenues do not include the $71,500,000 cash proceeds received from ALK that are required by GAAP to be recorded as a liability on the balance sheet. Turning to our expenses. R and D expenses for the fourth quarter and full year 2024 were 3,000,000 and $19,600,000 respectively. These costs were primarily associated the manufacturing of NEPI to support our U. Commercial launch, along with certain other product development costs and personnel related expenses. Our SG and A expenses for the fourth quarter and full year 2024 thirty five point five million dollars and $71,700,000 respectively.

These primarily reflect marketing expenses, and personnel related costs associated with the commercial launch of NEPI as well as general operating expenses. We had net income of 49,900,000.0 or $0.51 per share basic and $0.48 per share diluted for the fourth quarter. Net income was 8,000,000 or $08 per share basic and diluted for the full year 2024. In terms of our balance sheet and cash runway, we ended the year with $314,000,000 in cash cash equivalents and short term investments. At the time of FDA approval of Nepi two milligram in August 2024, we guided to an operating runway of at least three years. Which budgeted an upfront fee of about $50,000,000 for an ex U. Partnership. The ALK licensing agreement provide us with a significantly greater cash infusion of $145,000,000 upfront and an additional 10,000,000 in near term regulatory and launch milestones expected to be attained in mid to late twenty twenty five. As such, the combination of the capital brought in from our ALK deal along with our earlier than anticipated success in obtaining favorable coverage decisions from US payers, has given us a lot of flexibility to further invest in the commercialization of NEPI while maintaining a strong balance sheet.

Looking ahead, as Eric noted, we plan to accelerate our DTC investment beginning in May in order to take advantage of the back to school seasonality. We are projecting a DTC campaign spend of between 40 and $50,000,000 in 2025. In parallel, we are working to ensure availability of the one milligram nepidose for children four years or older starting in May. With this in mind, we anticipate operating expenses excluding both cost of goods sold and stock based compensation will be approximately 200 to $210,000,000 for the full year 2025. With this forecast, we still expect to maintain a runway of at least three years based on our current operating plan. I'll hand the call over to Rich now to finish up. 02/2024 has set up 02/2025 to be a pivotal year of commercial execution for Nefi.

Our primary focus is accelerating adoption of NEFI and expanding global market access and advancing our intranasal epinephrine technology with the plan to start phase two in urticaria as well as our allergy challenge clinic registry study in the next few weeks. The early enthusiasm from physicians, payers, and patients reinforces our confidence in nephews potential to become a new standard of care emergency allergy treatment. I'd like to thank the entire ARS team for their dedication in making this launch a success. We look forward to continued momentum in 2025 and beyond. With that, let's open up the call for questions.

Thank you. We will now begin the question and answer session. First question comes from Ryan Deschner with Raymond James. Your line is open.

Hi. Good morning. Thanks for the question, and congrats on the progress.

I think you mentioned that nephew one milligram will be available starting in May. A lot of KOLs we've spoken to has said this is the big source of demand even currently. Are you looking at the ramp for this format relative to what we've seen with the two mg product? And then I have a follow-up. Yeah. We believe it's additive. It's about 23% of the market. However, it's probably more than that for the impact on the sales ramp of Nephi as we discussed adoption we're seeing right now is heavily weighted towards children. So, obviously adding the younger children, which obviously parents have more of an issue with injecting, is actually should be very beneficial and as we said, we expect it to be weighted And in 2024, it was 23% of the prescriptions for epinephrine injections. So, we think the '23 will have a significant impact on our sales ramp. Sorry, the one milligram, excuse me, the twenty three percent would have a significant impact.

Got it. And then just one more. Wondering if you could us any more detail on on the progress toward the 80% access goal which I think was more toward the end of the third quarter. It sounds like it's evolving. And what proportion of NEPHI sales do you expect to come from public programs like Medicaid? Thank you. So at this point, we're at about as of April 1. So UnitedHealthcare came to agreement with us and we'll put it on unrestricted access on April 1. So, of April 1, we'll be at about fifty one percent of commercial patients will have access without a prior authorization. Now, it's a little over sixty percent total, but we actually focus on the ones that don't need the prior authorization because that's the what we're realizing is the major barrier to prescribing Nefi for a lot of physicians, even those that are very favorable honestly tell us they only have so many hours in a day and weekends to write prior authorizations. So, it is a big headwind. With that also said, we just signed an agreement really just within the last week with Zynq Zinc represents Caremark, Aetna, Anthem, and a number of other insurers, which is more than 25% of the commercially insured market.

Unfortunately, for whatever reason, I can't tell you, but Caremark typically only puts things on formulary either January 1 or July 1. So we do currently expect them to put NEFI on formulary by July 1. They do make exceptions. It could go sooner, but we don't know that yet. If Caremark goes on formulary July 1, we also expect Aetna and Anthem to be on formulary, and by formulary, I mean unrestricted access. So, no prior authorization required. Because they're already approving prior authorizations fairly readily. But we do expect them to have unrestricted access by July 1 or sooner. So that would bring us very close to that 80% mark Certainly, if you count all coverage, but even just counting unrestricted access, I think we'd be close to the 80% mark by July 1. And we think that's very encouraging going into the summer season on top of our campaign and other information we'll be putting out to make doctors more and more comfortable with the use of nephi. We think will all come together for this summer period and and really hopefully drive sales over the summer. Thanks for the color. Appreciate it. One moment for our next question.

Our next question comes from Alexa Demer with Cantor Fitzgerald. Your line is open.

Good morning, everyone. This is Alexa Demer on for Josh Schimmer and congrats to the ARS Pharma team on another great year. I wanted to ask what percentage of the epinephrine market is direct to patients in comparison to the broader entities like airlines and schools?

Okay. Well, currently, very little is being sold outside of the retail market. So almost all of our sales are retail. We are working with the two largest kit manufacturers for airlines who do want to replace other epinephrine products in the kits Obviously, airlines have to opt in but there's a lot of advantages to NEFI between the ease of use, the lack of the needle, which reduces liability for the airlines as well as the temperature excursion data, the high temperature data, which is important in an airplane. But very little. And Eric, you can chime in here. I think much, if any of our revenue is coming from outside of retail. We expect that to grow over time. But initially, it takes time for that to happen. And for example, the manufacturers did not want to put nothing in the kit until the one milligram was available, so they're waiting. Because they want they need both doses. So, at that point, we expect that to start to pick up over time. And, again, not immediately because they're not gonna go throw away all their kits or replace all their epinephrine in the kits. They're going to do it over time as it expires.

Eric, do you want to add anything into that? Rich, I'll just add that when we look at our forecasting, you know, it's really focused on the retail market. As Rich mentioned, kind of this public interest market of airlines, can think about, hotels, restaurants, law enforcement, emergency rescue. Not included. But as time goes on in terms of education and awareness and them getting funding, we do have an opportunity in that channel. And then just one point back to Ryan's question [indiscernible] people may be thinking this, the one milligram is also included in all of our payer contracts. So again, once that's available, there's no issues with the doctor writing the one milligram, in addition to the two milligram. And I'll just add one more point to that because one of the things you need in a retail market is to find a way to make or to make it easier for some of these organizations such as restaurants to purchase NEFI. Right? So you can imagine a very well off restaurant can easily afford to buy a couple boxes of nefi You know, most restaurants run on fairly tight margins, so buying Nefi to have in the restaurant is perhaps a hurdle.

One of our largest advocacy groups actually came up with a great idea and is working on this independently of us because they want to see NEFI in the restaurants, and they believe that without the needle, it the liability again becomes much better so that Good Samaritan using NEFI can't hurt themselves versus it auto injector. They're actually negotiating with several of the insurance companies. And I've mentioned this to a few analysts already. To give a discount on their insurance. If they have nephi in the restaurant or epinephrine in general. And we think that's a brilliant idea actually, because that would potentially pay for the NEFI for the restaurant, by giving a discount on their insurance if they actually have the epinephrine in the restaurant. So those kind of things are all happening but, again, we'll take some time before we start to realize significant revenue from those type of opportunities.

Awesome. Thank you, and congrats again.

One moment for our next question. Our next question comes from Louise Chen with Scotiabank. Your line is open.

Hi. Congratulations. On all the progress this quarter, and thank you for taking my questions. I had a few for you. So first question I wanted to ask you was how long does prior authorization for those payers that require you to do it usually last for? Does it have to be renewed? Second question I had was, do you have any data that talks about that upside expansion opportunity for you and how many of those patients are actually picking up from there, those that are untreated were previously diagnosed. Then last question is I saw some headlines on the potential for epinephrine to go over the counter. I don't know if you have any thoughts on if that were to happen, what that would mean for you. Thank you.

Okay. So could you just repeat the questions one at a time? First question. Sorry. Just to make it clear. Yeah.

Yeah. Sure. Yeah, sure. Okay, so I wanted to ask you with respect to prior authorization. For the payers that require you to do it. How long does this usually last for? Does have to be renewed at some point?

Yeah. I think and, Eric Yeah. You can you can add into this, but I believe that they need a prior authorization I mean, again, the the nature of this is a little unusual. You might only get one or two or three prescriptions a year. Right? So they're gonna get a prior authorization for that prescription. Some of them are for one, some two, we've seen three prescriptions go through, or three box in one prescription, I should say. Three units. [indiscernible] But I believe they would probably need that prior authorization each time. So that's a huge burden. And if you think about the revenue, if if on average right now, we're seeing 1.3 units per prescription. Now we believe that will go up significantly because a lot of those are cash pays where they're just buying one now and they'll get more once it's on unrestricted coverage once their insurance company is covering it. But the you know, if you think about it, it's only a little more than $500 in revenue to us, net revenue. So each prior authorization accounts for a very small net revenue, and that's why we believe in this category, it's a major hurdle for the doctors Do you want to add anything to that, Er?

Yeah, I would just say it's a mix. It depends on the insurer, as Rich mentioned. Some will require it every single time, others may be a little bit longer. I also think it's important, as we mentioned in our presentation, that we are on track to hit that 80% of coverage in commercial. And when we say that, that's coverage with no PA. All of our contracts that we're putting in place with the GPOs, with PBMs, Again, we're not paying any rebates if there's any type of step edit. Prior authorization. So we're really confident that again, we're lowering the barriers, in time here for physicians to write this product without a PA? Okay. And if you could just repeat your second question again.

Yeah. Sure. Okay. So I wanted to ask you for patients that were previously diagnosed, so untreated with traditional epinephrine, how many of them have chosen to take your product? Just trying to assess the expansion opportunity and how that's progressing for you.

Eric, do you have that information? We haven't broken out and done any claims analysis. We have plans to do that in the middle parts of the year here. [indiscernible] opportunity perspective, as we've shared, there's three point two million patients that have current treatment. Then you're looking at another sixteen point five that are diagnosed without treatment. Within that group, we know over the last couple of years, there's three point three million patients that have been prescribed epinephrine. About a third of them have filled, but they haven't refilled. There is a significant opportunity there to reengage those patients. When we talk to physicians, when we talk to patients, in that group, the major reasons why they didn't refill or fill initially is because of the needle, size, portability, and affordability as well. So, you know, when you look at our programs in commercial, again, if they're covered, dollars 25 for the prescription. Even if they get more than one carton, we only charge one co pay, but we're able to, again, get reimbursed on two cartons or three cartons. The average co pay for a needle injector is about $40 So I think we're removing a lot of the challenges in terms of a needle free easy to use, portable option And we do see a very significant opportunity to reengage this population whether it's through the physician or our DTC efforts that we'll launch in May.

Does that help?

Yeah. It says can I ask one more quick question?

Yep.

Very good.

Thank you.

The opportunity for epinephrine to go over the counter what would that mean for you?

Yeah. It's been brought up to us multiple times, including by big pharma companies. Of course, we know the inhaled epinephrine is over the counter, but it's not systemic and it's for asthma. The two criteria for over the counter, obviously, are first, safe [indiscernible] believe NEPHY is very safe, especially with only two doses. You can overdose on epinephrine. So, that is a big risk and FDA has raised significant concerns about levels above the observed with two EpiPen. So, that's been a big significant discussion for years and years and years that they just don't know the safety in real world patients. With levels above that. So, people that might take more than two doses in Effie would be a concerned FDA. The other criteria is self diagnosis. You've got to be able to diagnose that you have the disease. And there's a lot of causes of symptoms similar to food allergies that may or may not be an actual food or venom allergy. So, FDA would also have to get over that barrier of the ability of people to self diagnose So, while it's a discussion and would be interesting, think it's a difficult hurdle this type of product, just the profile.

For FDA. So, I would not expect it to go to TC DC certainly in the near future. I would not expect that to happen.

Thank you.

One moment for our next question. Our next question comes from Roanover Reeves with Leerink Partners. Your line is open.

Good morning, everyone. So I was curious, what are you hoping to learn from the challenge clinic registry study for NEFI that's starting in April and around how long will that run for? And as you gather this data, would you present it in a of a rolling basis this year at medical meetings or publications?

Yeah, so first of all, this is going to be the largest randomized controlled study ever done with epinephrine, period. Never been a study like this done, but now that we're approved, FDA believes it's feasible. We believe it's feasible. So, it will be six hundred people treated. Four hundred on NEFI, two hundred on I'm injection, And again, it will be randomized and partially blinded by partial, I mean, it's blinded up to the time the physician decides to give a dose of epinephrine. They won't know what the treatment is up to that point. The second dose would not be blinded because, of course, they know what they gave the first time. It would have to be the same product the second time. If they need a second dose. So, is going to be a very significant study. FDA's primary interest is safety. Again, as I mentioned, all of our clinical trials are in healthy people in the clinic. Not having a reaction, So, FDA is very interested in seeing real world data [indiscernible] all comers. Basically, study will be anyone they're going give oral food challenge to is eligible to enroll.

That would normally get epinephrine if they have a reaction. So it's a really real world study where you're going to get patients with asthma, with all sorts of other concomitant meds. Nothing is barred in this study, so we'll get a really good sense of the safety of Nefi and also of injection. Even prime injection I don't think we have you know, a super good sense of of that in a clinical environment like this, you're really recording things that are not just spontaneously reported. So that's the nature of the study. It's gonna be, really, it's gonna be an amazing study. We will do an interim analysis. I don't think we'll do multiple rolling ones because that's just not normally done, but we probably will do an interim analysis so that at least preliminary data will be presented probably at the next Quad AI meeting. And then we'll present the full data. And we will be looking at clinical outcomes as well, but those are secondaries because FDA did really focus on safety, that they wanted to understand the safety of NEFI have better data on the safety of NEFI. We understand it's you know, side effects are very mild and very infrequent.

But nonetheless, they want to see in patients that actually have a reaction and are on all their concomitant meds or have all their other concomitant conditions. That you typically see in this population. So, that's really the main focus of the study. And we will probably do an interim analysis, Verona, so that's helpful as well.

Yep, got it. Interesting. And then wanted to follow-up thought your KOL feedback that you mentioned earlier was really interesting. In terms of physicians that want to switch all of their patients to DESE or possibly majority. Do have a sense of the proportion of physicians out there that you're detailing that have this interest?

I think it's mixed. I think of of some we talked to at Quad AI, which are really the top tier physicians, to be very honest, they're the ones that are going to the meetings and educating themselves and you know, I've had a number of conversations myself with with a lot of these, and you know, one major one told me that he just doesn't have he can't spend all you know, all evening and weekends writing PAs. So prior authorization. So he's kind of limited. He's picking and choosing, but he would switch almost everybody he thinks almost all of his patients would prefer nephi. He also noted that he, in his region, he's a major advisor pediatricians and general practitioners. So he had thrown out that he advises about a hundred pediatricians a couple hundred general practitioners that have patients that contact him with questions. And he said none of them will write PAs. They just won't do it. So allergists are more flexible to write these prior authorizations where pediatricians just probably have less time. I don't know if or they're not as equipped in their clinics to write prior authorization to manage it. So so he said they just won't do it until that that barrier clears.

But even they're contacting him about Nefi and wanting to prescribe especially again to the children are a primary focus of a lot of these doctors right now. But we think it's pretty prevalent. There are still few that are waiting to see some real world data and we're collecting real world data from our NEPHE experience that looks spectacular right now. And once we get to a large enough end, right now, we we could talk about it a little bit if you want, but we're we're at about seven fifty eight patients treated that have been reported. From four seventy eight doctors. And the data's coming in really like it's working at least as well as injection possibly even better. But nonetheless, once we get to maybe a couple thousand, we might do a publication, a [indiscernible] basic letter to the editor of one of the major publications to give some data. And I think that's what they're a lot of them are waiting for. They're waiting to see especially the less less let's say, scientific doctors, that understand the data well. The other ones are like, okay. Let me let me see it used in a bunch of patients and that it's working well, and then I'll prescribe.

And then they they they they all agree this is a much better profile, much better product than injection for their patients, but a lot of them still have that hesitation. So that's another one of the other two or three things we're focused on is really that that access unrestricted access [indiscernible] the doctors comfortable and getting real world data for them that it's really working equal to injection. And then the third is raising awareness among the patients and caregivers that nephews available and they can go get it unrestricted without complications or high fees. That's going to be a big initiative as well. And that's why we're aligning our DTC campaign with that access occurring. And, you know, some people say north of fifty percent is already good enough to start driving patients into the doctors, we're actually going to start that process when we're hopefully closer to the 80% mark so that people will get it very easily and without high co pays.

Makes sense. Thanks a lot.

One moment for our next question. Our next question comes from Lesley Henbury Brown with William Blair. Your line is open.

Thanks for taking the questions. Guess, first one is is just can you talk about the system that you have to go back to doctors or patients who were written a script and it wasn't approved once you get coverage with their insurer.

And sort of Yeah. The system you have and maybe what you've seen from that so far as you've won far [indiscernible] two different things I would separate If it's through BlinkRx, our online pharmacy, then BlinkRx is obviously keeping record of all patients who were denied a prior authorization or who even filed a prior authorization. So so we have all the that [indiscernible] And and their contact information because they went through BlinkRx So as as insurers are added to to coverage, and we get unrestricted coverage with new insurers, they can go back and inform the patient as well as the doctor that that patient is now covered. And can go back and get NEPHY without prior authorization. So that's one thing I think Eric's team is doing quite effectively. The other is a little harder to deal with if it was a script written through a pharmacy. And, of course, even even if we have the cash pay in place or, you know, patient goes and they they don't have that co pay assistance You could have a lot of people walk away from the script that we don't want. We want them to go to the pharmacy and have that $25 copay.

So, so in in that regard, we're doing a couple things. The Salesforce is really tasked with informing the doctors that their patients are now covered for, let's say, United as of April 1. So another couple weeks. If you're a UnitedHealth patient, which is about eight percent of The United States commercial insurance, You can now go back and get that script again. Or if the script is still valid, just go back to the pharmacy and get Nefi and knock have to have the prior authorization. On top of that, we also don't want patients to walk away from a copay. So if they have a with United, if they have a $80 co pay, just throwing out a number. Just as an example. You have an $80 copay for Nefi with United. And you you don't wanna pay 80, but you would easily pay 25. You have to have our coupon from our website from your smartphone to give to the pharmacist. We are now working very hard with both CVS and Relay Health to sign agreements to preload that card. So, when patients and caregivers go to the pharmacy, it will be automatic. That they won't have to have the coupon, and if they forgot the coupon, And you know, surprisingly, even somebody I know who's used Nefi multiple times already she has a lot of different allergies and she's a very smart person, very She actually paid 200 for Nefi and she had authorization.

She had prior authorization approved. For insurance coverage and I was shocked and I said, well, you know, didn't you use the coupon? And she said, And I'm like, so we we don't want that because she obviously could afford it. She didn't think of anything of $200, but to to a lot of people, 200 is a barrier and we'll walk away from script. So we're trying to get that done as well to make sure that it's seamless. Meaning you get your script from the doctor, you go to the local pharmacy, you hand the script to the pharmacy or it's sent electronically, of course, these days, so you don't actually have a physical script, but you go into the pharmacy and they just say your copay is $25 and you walk away happy. And that's really what we're trying to get to, to make that as seamless as possible for the vast majority of the population as quickly as possible, especially going into this summer.

Thanks. I mean, can you comment on for the coverage that you've won so far? Have you seen you know, many of those scripts? For example, the ones through BlinkRx go back and get filled? Or are those patients maybe when the initial script is denied, do they just get a script for an auto injector?

Yes. I'll refer to Eric on that one.

Eric, Eric, do you Yep. Do you have any information on that as to when a blink or goes back after coverage? I know.

Yeah.

Lachlan, we are seeing a percentage of those patients convert have a protocol in place, as Rich mentioned. Once we get coverage, and we've been doing this over the last couple of weeks, reengaging those patients. A portion of those patients opted to go to the cash prescription.

But the other ones were getting a a nice amount of them kinda coming back and saying, okay. Hey. Great. Now that my insurance is covering this, it's affordable. They're moving from kind of a submitted prescription that's waiting to obviously, you know, a dispensed prescription so they have So we're not only doing that, as Rich said, with Blink, but our field team is also trained to engage the doctors on all these updates. Really working closely with the staff because it's they're carrying that workload too of working with the patients and going through that process. So, the field team has data based on each position of what payers their patient base represents and they're messaging accordingly. Pulling that through and and driving that all those wins that we're seeing.

Hey. Great. Thanks. Yeah. It's I have to follow-up. Go ahead.

No. No. I was just gonna add that, again, a lot of people are telling us that they're just getting, if they're not covered, they're getting one now, but they want more than one prescription So they're getting one now at the cash pay price of $1.99, and then they're waiting for coverage to, you know, for their insurer to cover NESE so they can go back and get more because that that seems to be a a common strategy, common theme we're hearing from patients caregivers that they just want the one initially And I know we just spoke to somebody, an advocacy person, in Utah, advocacy person that's working on the legislation in Utah. Her kids both have this disease and she has an Effie and she was just waiting for her cases, everything. She wants her kids to carry it, right? She just loves nephews because her kids can actually carry it. So she went out and got it. And I'm sure she'll get more prescriptions. She just wanted to get one for each of the kids initially so that they have the Effie in their hands walking around with it, they're really thrilled about it. So that's the kind of feedback we get all the time.

And heard from a lot of people already in that kind of mode of I'll pay for the one at the $1.99, but then I'll wait for insurance for more.

Okay. Great. That's that's great context. And as a follow-up, you talked about how access and getting the payer coverage is really important to driving prescription because of that prior authorization burden. Can you talk about the maybe lag that you see there? I mean, how quickly you know, when you sign a new contract or so far, when you signed new contracts and got on formulary, Are you able to see an uptick in prescribing over the following weeks couple of months? Or how should we think about what that sort of delay is like?

It's a great question because I just asked that question yesterday. Of my team and I they're still collecting the data. I don't know Eric if you have it. I haven't seen it yet, but the example is kind of like Express Scripts, which started now you know, a couple months ago. It really kinda hit with Express Scripts. So how are how are Mhmm. How are the you know, sales going now with patients under ExpressScripts? Versus other insurance companies, which may have only recently added NEFI, so it's not the data won't be as impactful. But I don't know. Eric, do we have any sense of that yet? Yeah, we are looking at individual cohorts of patients based on insurance. I can tell you that the last couple weeks, especially with Express Scripts, we're seeing a incline there in terms of share relative to what we see in the overall average. So that's what we expect to see And for each of those plans that we're winning, you know, we're driving that through messaging, whether it's nonpersonal promotion through marketing, but most importantly, through our direct, efforts with our field team. Interacting with doctors, interacting with staff, would say also that it takes time when the patient comes in, right?

Certain patients see their doctor every six months, others maybe every year. But when they come in, now the doctor knows that if that patient has Express Scripts starting April 1 United, that this is going to be covered without a prior authorization. So are encouraged by what we're seeing in terms of the increases here. And it does really create a nice opportunity for us over the next couple of weeks, and especially going into the May back to school season. With a lot of patients coming in to really drive this. Yeah, just to add one more thing to that. I know we're actually going a little over time a little bit, but we just are now working with advocacy and on our website posting a scorecard. We wanted to wait till we cross that 50% mark if United gets us there. But we're putting a scorecard, and the advocacy groups are gonna post this on their website. As well under their NEFI description. Where it's going to show who's covering without any restrictions, without any prior authorization, who's covering but is still requiring prior authorization Again, I don't differentiate between insurer that's covering with prior authorization and one that's not.

Covering at all, and then who's not covering at all. And there's two purposes of this. One is that I want I want the patients to know they're covered. And the caregivers, right? And the doctors.

So the scorecard is also being shared by our sales force with the doctors. But I also want them to know who's not covered. Because if your insurer is not covering, and you see this whole list of insurers that are, And you go and call up your insurer and say, hey, why are you guys not covering this and all these other insurers are covering it? We think that puts a lot of pressure on insurance companies cover more quickly. So that's another strategy we have to try to facilitate that by by now starting to make it very public who is who is covering without this prior authorization requirement and who is not. And we're hoping that that will also start to have some impact over time. [indiscernible] One moment for our next question. Our next question comes from Julian Harrison with BTIG. Your line is open.

Hi, good morning. Thank you for taking my questions and congrats on all the recent progress On the CSU Phase 2b trial you expect to initiate in the next few weeks, I'm wondering if you could remind us of the competitive positioning here and any early feedback you have on preference for episodic relief versus chronic therapies in CSU?

Yeah, well, first of all, they're very independent. Okay. Because these people are all on chronic therapy. Right? So you could be on chronic antistamine, high dose antistamine therapy or high dose Xolair and you still have flares.

So what there is no current therapy for is those flares. Meaning you're on Xolair, and you're stable, but every couple months, you have a big episode where you got a couple days to two days of severe symptoms all of a sudden, and it's very, very upsetting to be people. A lot of times they get not only the itchy and painful but they also sometimes get angioedema, facial angioedema, so their lip swells up, their cheek swells up, They don't want to go to work. They want to go out you know, while that's happening. So the difference is you're on your chronic therapy and then you have a flare And now you can have an immediate treatment to treat that flare and resolve it within minutes.

And then go back and just go back to your daily life, go to work, go wherever you wanna go. Versus, go to the hospital and get the other current ways they deal with this flare is you either just tolerate it and hope or wait for it to go away because it will go away. And you or you go to the hospital and get IV antihistamines at very high doses tends to be effective in a lot of cases. And then the other is to take a steroid, which takes hours to take effect. Okay, so Nefi would provide a unique advantage of treating that acute event while they're on chronic therapy. So it's synergistic with chronic therapy. Just want make sure it's clear that we are not intending to replace chronic, urticaria therapy at all. This is this is a supplemental treatment to treat that exacerbation that occurs. And if you go back to the Xolair phase three studies that were published People on Xolair even will have three to six of these events a year then well, they're actually more than three to six events. I should take that back. It was they went to the emergency room three to six times a year to treat this type of an event.

So so it's a pretty significant issue even on chronic therapies like Xolair, Now, are a portion of people that are just stable on Xolair or antihistamine even that never have these events. But there's a large proportion of people that have these events, so it is an unmet medical need. We're not not proposing to replace chronic urticaria therapies. We're we're looking at supplementing them. Does that help? That's very helpful. Thank you, and congrats again.

Okay, thank you. Great.

And I'm not showing any further questions at this time. I'd like to turn the call back over to Richard.

Okay. Well, I really appreciate everybody joining the call, and forward to the next conference call when we get closer to that summer period. Obviously, we think at that point, we're hoping to see a significant uptick in scripts and then going into the summer when our DTC campaign starts in May, we really start raising that awareness and we think you'll really enjoy our DTC campaign where we've been working very hard and we think it will be very, very positive, shifting the thinking, shifting the paradigm towards [indiscernible] easy to carry, easy to use, and not threatening, and treat the symptoms immediately, and they'll wait for severe anaphylactic disease. So, we think that that will really shift the paradigm towards earlier and earlier use of epinephrine in order to stop the symptoms immediately when a reaction occurs. And that's really how doctors want to see epinephrine used So with that, I'll close the call.

Thank you, ladies and gentlemen. This does conclude today's presentation. You may now disconnect and have a wonderful day.