UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30,2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 001-39756
(Exact name of Registrant as specified in its Charter)
| Delaware | 81-1489190 |
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| (State or other jurisdiction ofincorporation or organization) | (I.R.S. EmployerIdentification No.) |
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| 11682 El Camino Real, Suite 120San Diego, California | 92130 |
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| (Address of principal executive offices) | (Zip Code) |
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Registrant’s telephone number, including area code: (858)771-9307
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | TradingSymbol(s) | Name of each exchangeon which registered |
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| Common Stock, par value $0.0001 per share | SPRY | The Nasdaq Stock Market LLC |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
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| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
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| Emerging growth company | ☒ | |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No☒
As of November 6, 2024 there were 97,185,475 shares of registrant’s common stock, $0.0001 par value per share, outstanding.
Table of Contents
| Page |
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| PART I · FINANCIAL INFORMATION |
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| Item 1. | Financial Statements | 6 |
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| Condensed Consolidated Balance Sheets | 6 |
| Condensed Consolidated Statements of Operations and Comprehensive Loss | 7 |
| Condensed Consolidated Statements of Stockholders’ Equity | 8 |
| Condensed Consolidated Statements of Cash Flows | 9 |
| Notes to Unaudited Condensed Consolidated Financial Statements | 10 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 29 |
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| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 41 |
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| Item 4. | Controls and Procedures | 42 |
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| PART II | OTHER INFORMATION | |
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| Item 1. | Legal Proceedings | 43 |
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| Item 1A. | Risk Factors | 43 |
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| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 93 |
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| Item 5. | Other Information | 93 |
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| Item 6. | Exhibits | 94 |
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:
| • | any statements regarding future economic conditions or performance; |
| • | research and development plans, including planned clinical trials, for neffy (which includes EURneffy®, the trade name for neffy in the European Union (“EU”)) for additional indications; |
| • | the expected timing for reporting data; |
| • | our expectations regarding the U.S. Food and Drug Administration’s (“FDA”) review of our supplemental new drug application (“sNDA”) for neffy 1 mg; |
| • | our plans to submit a post approval variation to the European Medicines Agency’s (“EMA”) for neffy 1 mg and the timing thereof; |
| • | our plans to submit regulatory filings for neffy in Canada, the United Kingdom, China, Japan, Australia and New Zealand in collaboration with our partners and the timing thereof; |
| • | the expected timing for regulatory review decisions for neffy; |
| • | the commercial potential of and commercialization strategy for neffy; |
| • | the size of the markets for neffy for its currently approved indications in the United States and the EU and any potential additional indications, the projected growth thereof, and our and our collaboration and marketing partners’ ability to capture and grow those markets; |
| • | the rate and degree of market acceptance of neffy or any future product candidate; |
| • | our expected competitive position; |
| • | our potential to become the standard in treatment and transform the treatment of allergic reactions; |
| • | the likelihood of neffy attaining and maintaining favorable coverage; |
| • | the expected intellectual property protection for neffy; |
| • | legislative and regulatory developments in the United States and foreign countries; |
| • | estimates regarding anticipated operating losses, capital requirements and needs for additional funds; |
| • | our ability to obtain, maintain and successfully enforce adequate patent and other intellectual property protection for neffy or any future product candidate; |
| • | our expected use of the remaining net proceeds from the Silverback Therapeutics, Inc. (“Silverback”) initial public offering; and |
| • | statements of belief and any statement of assumptions underlying any of the foregoing. |
Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part II, Item 1A, “Risk Factors” of this Quarterly Report. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
Unless the context otherwise indicates, references in this Quarterly Report to the terms “ARS”, “the Company”, “we”, “our” and “us” refer to ARS Pharmaceuticals, Inc. and its consolidated subsidiaries.
SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS
An investment in shares of our common stock involves a high degree of risk. Below is a list of the more significant risks associated with our business. This summary does not address all of the risks that we face. Additional discussion of the risks listed in this summary, as well as other risks that we face, are set forth under Part II, Item 1A, “Risk Factors” in this Quarterly Report. Some of the material risks associated with our business include the following:
| • | We are highly dependent on the successful commercialization of neffy in the United States and in the EU for its currently approved indications in those jurisdictions. To the extent neffy is not commercially successful, our business, financial condition and results of operations would be materially adversely affected, and the price of our common stock would likely decline. |
| • | neffy may fail to achieve the degree of market acceptance by allergists, pediatricians and other physicians, patients, caregivers, third-party payors and others in the medical community necessary for commercial success, in which case we may not generate significant revenues or become profitable. |
| • | If we are unable to achieve and maintain adequate levels of third-party payor coverage and reimbursement for neffy on reasonable pricing terms, its commercial success may be severely hindered. |
| • | Competitive products may reduce or eliminate the commercial opportunity for neffy for its current or future indications. If our competitors develop technologies or product candidates more rapidly than us, or their technologies or product candidates are more effective or safer than ours, our ability to develop and successfully commercialize neffy may be adversely affected. |
| • | If we are unable to successfully develop neffy for additional indications, or experience significant delays in doing so, the commercial potential of neffy will be more limited. |
| • | If the FDA does not conclude that potential additional indications for neffy, including urticaria, satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for additional indications under Section 505(b)(2) are not as we expect, the approval pathway for those product candidates will likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful. |
| • | Product liability lawsuits against us or any of our current and future licensing and collaboration partners could divert our resources and attention, cause us to incur substantial liabilities and limit commercialization of neffy. |
| • | If our information technology systems or data, or those of third parties with whom we work, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences. |
| • | We rely completely on third parties to manufacture and warehouse both our domestic and international supply of neffy. |
| • | We are dependent on international third-party licensees and assignees for the development and commercialization of neffy in several countries outside the United States. If these third parties are not successful in their development and commercialization efforts of if these third parties fail to meet their contractual, regulatory or other obligations, our business and results of operations could be adversely affected. |
| • | We expect that our timing of sales and results of operations will fluctuate for the foreseeable future, which may make it difficult to predict our future performance from period to period. |
| • | We have incurred significant losses since our inception. |
| • | We may need additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development activities or commercialization efforts. |
| • | Our commercial success depends on our ability to obtain and maintain sufficient intellectual property protection for neffy and other proprietary technologies. |
| • | Our success is highly dependent on our ability to attract and retain highly skilled executive officers and employees. |
