ARS Pharmaceuticals, Inc.

Previous wording

We are a biopharmaceutical company focused on the commercialization and development ofneffy(currently identified in the EU by the tradename EURneffy) for the needle-free intranasal delivery of epinephrine for the emergency treatment of Type I allergic reactions, including anaphylaxis. neffyis the first and only FDA and EC-approved needle-free epinephrine product, and the first new delivery method for epinephrine in more than 35 years. neffyis a proprietary composition of epinephrine with an innovative absorption enhancer called Intravail, which allows neffyto safely provide intranasal delivery of epinephrine at a low dose within the exposures of approved injectable products across a range of dosing conditions (including repeat dosing and allergen challenge). We believe the market opportunity forneffy in the United States alone is significant. At the current list price for a two-pack ofneffyand our target total gross-to-net yield, the estimated 6.5 million patients currently prescribed an epinephrine autoinjector in the United States represents an initial addressable market opportunity of approximately $3 billion in annual net sales, while the remaining 13.5 million diagnosed patients that have not been prescribed an epinephrine product represent an additional addressable market opportunity of approximately $7 billion in annual net sales.

Current wording

We are a biopharmaceutical company focused on the commercialization and development ofneffy(currently identified in the European Union (“EU”) by the tradename EURneffy) for the needle-free intranasal delivery of epinephrine for the emergency treatment of Type I allergic reactions, including anaphylaxis. neffyis the first and only U.S. Food and Drug Administration (“FDA”) and European Commission-approved needle-free epinephrine product, and the first new delivery method for epinephrine in more than 35 years. neffyis a proprietary composition of epinephrine with an innovative absorption enhancer called Intravail, which allows neffyto safely provide intranasal delivery of epinephrine at a low dose within the exposures of approved injectable products across a range of dosing conditions (including repeat dosing and allergen challenge). We believe the market opportunity forneffy in the United States alone is significant. At the current list price for a two-pack ofneffyand our target total gross-to-net yield, the estimated 6.5 million patients currently prescribed an epinephrine autoinjector in the United States represents an initial addressable market opportunity of approximately $3 billion in annual net sales, while the remaining 13.5 million diagnosed patients that have not been prescribed an epinephrine product represent an additional addressable market opportunity of approximately $7 billion in annual net sales.

Previous wording

On August 9, 2024, the FDA approved neffy 2 mg for the emergency treatment of Type I allergic reactions, including anaphylaxis, in adults and children who weigh 30 kg or greater. As a result, we initiated commercial launch ofneffy 2 mg in the United States, with product becoming available for shipment on September 23, 2024. This commercialization effort currently includes a direct sales force of approximately 120 individuals targeting high-volume epinephrine prescribers that is supported by branded direct-to-consumer marketing, disease awareness campaigns with advocacy groups and non-personal promotion including continuing medical education programs in collaboration with allergist societies, speaker bureaus, peer-to-peer programs and participation in regional and national medical conferences. On March 5, 2025, the FDA approved neffy 1 mg for the emergency treatment of Type I allergic reactions, including anaphylaxis, in patients who are four years of age and older and weigh 15 kg to less than 30 kg. As a result, we initiated commercial launch ofneffy 1 mg in the United States, with product becoming available on May 7, 2025.

Current wording

On August 9, 2024, the FDA approved neffy 2 mg for the emergency treatment of Type I allergic reactions, including anaphylaxis, in adults and children who weigh 30 kg or greater. As a result, we initiated commercial launch ofneffy 2 mg in the United States, with product becoming available for shipment on September 23, 2024. This commercialization effort currently includes a direct sales force of approximately 108 individuals targeting high-volume epinephrine prescribers that is supported by branded direct-to-consumer marketing, disease awareness campaigns with advocacy groups and non-personal promotion including continuing medical education programs in collaboration with allergist societies, speaker bureaus, peer-to-peer programs and participation in regional and national medical conferences. On March 5, 2025, the FDA approved neffy 1 mg for the emergency treatment of Type I allergic reactions, including anaphylaxis, in patients who are four years of age and older and weigh 15 kg to less than 30 kg. As a result, we initiated commercial launch ofneffy 1 mg in the United States, with product becoming available on May 7, 2025.

Previous wording

Our launch strategy forneffyin the United States involves an initial direct sales force outreach to high-volume prescribers of epinephrine accounting for approximately 55% of prescriptions in the last year through an efficient sales force. Our sales force is comprised of approximately 120 ARS Pharma employees, who serve as sales reps, virtual reps and areas sales managers that began field operations in early October 2024, as well as approximately 60 sales reps via our co-promotion partner, ALK-Abelló, Inc. (“ALK U.S.”, an affiliate of ALK-Abelló A/S (“ALK”)), who we anticipate will begin field operations in early June 2025 and will target up to 9,000 specified pediatricians and other prescribers in the U.S. Our sales force outreach has included: active participation since November 2024 of approximately 2,500 healthcare professionals in ourneffy experience program that allows healthcare professionals to useneffy firsthand as rescue therapy for anaphylaxis during in-clinic allergen challenge; extensive non-personal promotion including continuing medical education programs in collaboration with allergist societies, speaker bureaus, peer-to-peer programs and participation in regional and national medical conferences; engagement and contracting with payors to obtain timely coverage with favorable gross-to-net discounting; ourneffyconnect program that provides support to physicians and patients including our $25 co-pay savings card, $199 cash price and patient assistance programs; a telemedicine service to conveniently obtain a prescription online; partnerships with patient advocacy organizations including disease awareness campaigns in 2025; and branded direct to consumer advertising that is expected to commence in the second quarter of 2025. We also initiated a U.S. post-marketing registry-based study forneffyfor the treatment of anaphylaxis in oral food challenge or allergen immunotherapy clinics in the second quarter of 2025.

Current wording

Our launch strategy forneffyin the United States involves direct outreach to high-volume prescribers of epinephrine accounting for approximately 55% of prescriptions in the last year through an efficient sales force. As of June 30, 2025, our sales force is comprised of approximately 108 ARS Pharma employees, who serve as sales reps, area sales managers, and national sales directors that began field operations as early as October 2024, as well as 10 virtual sales reps, and approximately 60 sales reps via our co-promotion partner, ALK-Abelló, Inc. (“ALK U.S.”, an affiliate of ALK-Abelló A/S (“ALK”)), who began field operations in early June 2025 and will target up to 9,000 specified pediatricians and other prescribers in the U.S. Our launch strategy is also supported by: active participation since November 2024 of approximately 2,800 healthcare professionals in ourneffy experience program that allows healthcare professionals to useneffy firsthand as rescue therapy for anaphylaxis during in-clinic allergen challenge; extensive non-personal promotion including continuing medical education programs in collaboration with allergist societies, speaker bureaus, peer-to-peer programs and participation in regional and national medical conferences; engagement and contracting with payors to obtain timely coverage with favorable gross-to-net discounting; ourneffyconnect program that provides support to physicians and patients including our $25 co-pay savings card, $199 cash price and patient assistance programs; a telemedicine service to conveniently obtain a prescription online; partnerships with patient advocacy organizations including disease awareness campaigns in 2025; and multi-channel branded direct to consumer advertising including connected television, linear television, point of care, endemic and programmatic display, social media, and paid search that initiated on May 15, 2025. We also initiated a U.S. post-marketing registry-based study forneffyfor the treatment of anaphylaxis in oral food challenge or allergen immunotherapy clinics in the second quarter of 2025.

Previous wording

On August 22, 2024, the EC granted marketing authorization in the EU for EURneffy(the trade name forneffy 2 mg in the EU), for the emergency treatment of allergic reactions (anaphylaxis), in adults and children who weigh 30 kg or greater. Through our collaboration with ALK (discussed below), we anticipate that EURneffy will be made available to patients in certain EU member states in 2025. Regulatory review ofneffy is ongoing in Canada, the United Kingdom (“U.K.”), China, Japan, and Australia with filings submitted by the partners, or by ARS Pharma on behalf of our partners, during the fourth quarter of 2024. neffy has been approved or is under regulatory review in countries representing approximately 98% of the current global epinephrine autoinjector sales. Regulatory decisions are anticipated by mid-2025 in the U.K., the second half of 2025 in Japan, year-end 2025 in Canada and Australia, and in the first half of 2026 in China. Commercial launches are expected by mid-2025 in Germany, as well as in the U.K. pending receipt of U.K. regulatory approval.

Current wording

On August 22, 2024, the EC granted marketing authorization in the EU for EURneffy(the trade name forneffy 2 mg in the EU), for the emergency treatment of allergic reactions (anaphylaxis), in adults and children who weigh 30 kg or greater. The 1 mg dose of EURneffy for children who weigh 15 to 30 kg is currently under review by the European Medicines Agency (“EMA”), and a regulatory decision is expected in the first half of 2026. Through our collaboration with ALK (discussed below), EURneffy was launched in Germany in June 2025. We received approval of EURneffy in the United Kingdom (“U.K.”) in July 2025 for the emergency treatment of allergic reactions (anaphylaxis), in adults and children who weigh 30 kg or greater, and commercial launch in the U.K. is expected late in the second half of 2025. Regulatory review ofneffyis ongoing in Canada, China, Japan, and Australia with filings submitted by our partners, or by ARS Pharma on behalf of our partners, during the fourth quarter of 2024. neffyhas been approved or is under regulatory review in countries representing approximately 98% of the current global epinephrine autoinjector sales. Regulatory decisions are anticipated by year-end 2025 in Japan, Canada and Australia, with commercial rollouts planned for the first half of 2026. A regulatory decision is also anticipated in the first half of 2026 in China.

Previous wording

We reported positive topline results demonstrating statistically significant and clinically meaningful improvements in treatment-refractory chronic urticaria patients at the American Academy of Allergy and Immunology medical conference in February 2024, and anticipate initiating a Phase 2b randomized, placebo controlled outpatient clinical trial in chronic spontaneous urticaria patients on a chronic treatment regimens who still experience flares or exacerbations. This Phase 2b study is anticipated to initiate in the second quarter of 2025, with topline data anticipated in early 2026, followed by the potential initiation of a single pivotal efficacy study in 2026.

Current wording

We reported positive topline results demonstrating statistically significant and clinically meaningful improvements in treatment-refractory chronic urticaria patients at the American Academy of Allergy and Immunology medical conference in February 2024. In the second quarter of 2025, we initiated a Phase 2b randomized, placebo-controlled outpatient clinical trial involving chronic spontaneous urticaria patients, on chronic treatment regimens, who still experience flares or exacerbations. Topline data from this clinical trial is anticipated in the first half of 2026, followed by the potential initiation of a single pivotal efficacy study in 2026.

Previous wording

Since our inception in 2015 as ARS Pharmaceuticals, Inc., we have devoted substantially all of our efforts to developing intellectual property, conducting product development and clinical trials, organizing and staffing, business planning, raising capital, building infrastructure, pre-commercial and commercial activities, and providing general and administrative support for these operations. We began commercial operations in September 2024 and therefore have had limited net product sales. We have funded our operations primarily with proceeds from the Merger (see Note 1 – Nature of Business to the notes to the condensed consolidated financial statements included in this report), private placement of convertible preferred stock, issuance of common stock, licensing, supply and distribution arrangements with our commercialization partners, bank debt, and limited net product sales. As of March 31, 2025, we had cash, cash equivalents, and short-term investments of $275.7 million.

Current wording

Since our inception in 2015 as ARS Pharmaceuticals, Inc., we have devoted substantially all of our efforts to developing intellectual property, conducting product development and clinical trials, organizing and staffing, business planning, raising capital, building infrastructure, pre-commercial and commercial activities, and providing general and administrative support for these operations. We began commercial operations in September 2024 and therefore have had limited net product sales. We have funded our operations primarily with proceeds from the Merger (see Note 1 – Nature of Business to the notes to the condensed consolidated financial statements included in this report), private placement of convertible preferred stock, issuance of common stock, licensing, supply and distribution arrangements with our commercialization partners, bank debt, and limited net product sales. As of June 30, 2025, we had cash, cash equivalents, and short-term investments of $240.1 million.

Previous wording

We have incurred net losses from operations in most years since our inception. Our net loss from operations for the three months ended March 31, 2025 and 2024 was $37.2 million and $13.2 million, respectively. As of March 31, 2025, we had an accumulated deficit of $157.2 million. Until we consistently generate positive net income, if ever, our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials, our expenditures on other development activities, the cost for regulatory filings, expenses for commercial activities to establish, maintain and enhance sales, marketing and distribution capabilities forneffy, the timing and volume of our product sales, and our ability to earn potential regulatory and commercial milestones under our license and collaboration arrangements.

Current wording

We have incurred net losses from operations in most years since our inception. Our net loss from operations for the six months ended June 30, 2025 and 2024 was $47.6 million and $15.3 million, respectively. As of June 30, 2025, we had an accumulated deficit of $202.1 million. Until we consistently generate positive net income, if ever, our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials, our expenditures on other development activities, the cost for regulatory filings, expenses for commercial activities to establish, maintain and enhance sales, marketing and distribution capabilities forneffy, the timing and volume of our product sales, and our ability to earn potential regulatory and commercial milestones under our license and collaboration arrangements.

Previous wording

Under the ALK Collaboration Agreement, we are obligated to transfer to ALK the existing marketing authorizations for the Products in ALK’s territory. We are also required to conduct certain development and regulatory activities for Products in support of obtaining further regulatory approval of Products in ALK’s territory, and will transfer such regulatory approvals to ALK. ALK is obligated to use commercially reasonable efforts to obtain and maintain regulatory approval for Products through the European Commission and within specified countries within ALK’s territory. Following such approval for a Product in each indication within specified countries within ALK’s territory, ALK is obligated to use commercially reasonable efforts to commercialize such Product in such indication in such countries and to achieve first commercial sale of a Product in certain countries in accordance with a timeline specified in the ALK Collaboration Agreement.

Current wording

Under the ALK Collaboration Agreement, we are obligated to transfer to ALK the existing marketing authorizations for the Products in the ALK Territory. We are also required to conduct certain development and regulatory activities for Products in support of obtaining further regulatory approval of Products in the ALK Territory, and will transfer such regulatory approvals to ALK. ALK is obligated to use commercially reasonable efforts to obtain and maintain regulatory approval for Products through the European Commission and within specified countries within the ALK Territory. Following such approval for a Product in each indication within specified countries within the ALK Territory, ALK is obligated to use commercially reasonable efforts to commercialize such Product in such indication in such countries and to achieve first commercial sale of a Product in certain countries in accordance with a timeline specified in the ALK Collaboration Agreement.

Previous wording

Under the ALK Collaboration Agreement, ALK made an upfront payment to us of $145.0 million in November 2024. We are eligible to receive regulatory and commercialization milestones of up to $20.0 million and sales-based milestones of up to $300.0 million, provided that $55.0 million of such sales-based milestones are contingent upon us obtaining regulatory approval for the Product in Canada by a specified time. We are entitled to receive tiered royalty payments on net sales in the mid- to high-teens, subject to certain standard reductions and offsets. Royalties will be payable, on a Product-by-Product and country-by-country basis, until the latest of the expiration of the licensed patents covering such Product in such country, 15 years from first commercial sale of such Product in such country, or expiration of regulatory exclusivity for such Product in such country.

Current wording

Under the ALK Collaboration Agreement, ALK made an upfront payment to us of $145.0 million in November 2024, and we earned $5.0 million for the first commercial sale of EURneffy in the ALK Territory in June 2025. We are eligible to receive additional outstanding regulatory and commercialization milestone payments of up to $15.0 million and sales-based milestone payments of up to $300.0 million, provided that $55.0 million of such sales-based milestones are contingent upon us obtaining regulatory approval for the Product in Canada by a specified time. We are entitled to receive tiered royalty payments on net sales in the mid- to high-teens, subject to certain standard reductions and offsets. Royalties will be payable, on a Product-by-Product and country-by-country basis, until the latest of the expiration of the licensed patents covering such Product in such country, 15 years from the first commercial sale of such Product in such country, or expiration of regulatory exclusivity for such Product in such country.

Previous wording

Under the ALK Co-Promotion Agreement, ALK U.S. is obligated to start its promotion activities in May 2025 and meet specified ramp-up milestones and minimum detail requirements, using sales representatives that meet specific qualifications. In addition, during the term of the ALK Co-Promotion Agreement and for 180 days thereafter, ALK U.S. will not market, sell or manufacture any injection product containing epinephrine in the U.S.

Current wording

Under the ALK Co-Promotion Agreement, ALK U.S. was obligated to start its promotion activities in May 2025 and meet specified ramp-up milestones and minimum detail requirements, using sales representatives that meet specific qualifications. In addition, during the term of the ALK Co-Promotion Agreement and for 180 days thereafter, ALK U.S. will not market, sell or manufacture any injection product containing epinephrine in the U.S.

Previous wording

We will book all sales ofneffy in the U.S. and, subject to the terms of the ALK Co-Promotion Agreement, continue to have sole responsibility for all U.S. commercialization activities, including marketing, medical affairs, market access, production, distribution, pharmacovigilance, quality and safety.

Current wording

We record all sales ofneffy in the U.S. and, subject to the terms of the ALK Co-Promotion Agreement, continue to have sole responsibility for all U.S. commercialization activities, including marketing, medical affairs, market access, production, distribution, pharmacovigilance, quality and safety.

Previous wording

Cost of goods sold consists primarily of direct and indirect costs related to the manufacture ofneffyfor commercial sale, including salaries and related expenses for personnel, stock-based compensation, third-party manufacturing costs, raw material and component costs, packaging services, freight, storage costs, distribution fees, amortization of capitalized in-licensed costs, and royalties on product sales. Prior to the FDA approval ofneffyin August 2024, costs incurred for the manufacture ofneffy were recorded as research and development expenses, which resulted in zero-cost inventory. As a result, the cost of goods sold related toneffy will initially reflect a lower average per unit cost of materials, as previously expensed zero-cost inventory is utilized for commercial production and sold to customers. We expect the cost of goods sold forneffyto increase in relation to product revenues as we deplete these inventories. As of March 31, 2025, we had $10.9 million in zero-cost inventory remaining and based on our current forecast, we expect zero-cost inventory to be depleted by mid-2026.

Current wording

Cost of goods sold consists primarily of direct and indirect costs related to the manufacture ofneffyfor commercial sale, including salaries and related expenses for personnel, stock-based compensation, third-party manufacturing costs, raw material and component costs, excess or obsolete inventory adjustment charges, inventory write offs, packaging services, freight, storage costs, distribution fees, amortization of capitalized in-licensed costs, and royalties on product sales. Prior to the FDA approval ofneffyin August 2024, costs incurred for the manufacture ofneffy were recorded as research and development expenses, which resulted in zero-cost inventory. As a result, the cost of goods sold related toneffy will initially reflect a lower average per unit cost of materials, as previously expensed zero-cost inventory is utilized for commercial production and sold to customers. We expect the cost of goods sold forneffyto increase in relation to product revenues as we deplete this inventory. As of June 30, 2025, we had $9.8 million in zero-cost inventory remaining and based on our current forecast, we expect zero-cost inventory to be depleted by mid-2026.

Previous wording

Revenues. Revenue for the three months ended March 31, 2025 was $8.0 million, as compared to $0 for the three months ended March 31, 2024. Revenue for the three months ended March 31, 2025 includes $7.8 million in net product revenues for sales ofneffyand $0.2 million in revenue for regulatory services performance obligations under the ALK Collaboration Agreement.

Current wording

Revenues. Revenue for the three months ended June 30, 2025 was $15.7 million, as compared to $0.5 million for the three months ended June 30, 2024. Revenue for the three months ended June 30, 2025 includes $12.8 million in net product revenues for sales ofneffy,$2.6 million in revenue for the achievement of the milestone for the first commercial sale of EURneffy and for the performance of development and regulatory services performance obligations under the ALK Collaboration Agreement, and $0.3 million in revenue under supply agreements. Revenue for the three months ended June 30, 2024 includes the recognition of revenue for the delivery of the license forneffyin the Seqirus Territory in combination with the transfer of know-how under our license and distribution agreement with Seqirus.

Previous wording

Cost of Goods Sold. Cost of goods sold for the three months ended March 31, 2025 was $1.1 million, as compared to $0 for the three months ended March 31, 2024. Since prior to August 2024, costs incurred for the manufacture ofneffy were recorded as research and development expenses, product sales for the three months ended March 31, 2025 utilized zero-cost inventory and therefore consisted primarily of distribution fees, royalties, and intangible asset amortization.

Current wording

Cost of Goods Sold. Cost of goods sold for the three months ended June 30, 2025 was $5.0 million, as compared to zero for the three months ended June 30, 2024. Prior to August 2024, costs incurred to manufacture neffy were recorded as research and development expenses, and product sales subsequent to August 2024 primarily utilized zero-cost inventory. Cost of goods sold consisted primarily of product costs, the establishment of an inventory reserve, and royalties.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three months ended March 31, 2025 was $41.1 million, as compared to $8.0 million for the three months ended March 31, 2024. The increase of $33.1 million was primarily due to increases in marketing-related expenses of $17.5 million, personnel-related expenses of $9.0 million, stock-based compensation expense of $2.2 million, travel and meals expense of $1.5 million incurred by our sales personnel, outside services and consulting fees of $0.9 million, audit, tax and valuation fees of $0.7 million, conference and seminar expense of $0.5 million, legal fees of $0.5 million and other operating expense of $0.3 million.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three months ended June 30, 2025 was $54.3 million, as compared to $8.9 million for the three months ended June 30, 2024. The increase of $45.4 million was primarily due to increases in marketing-related expenses of $28.2 million, personnel-related expenses of $9.0 million, stock-based compensation expense of $2.3 million, outside services and consulting fees of $1.8 million, travel and meals expense of $1.3 million incurred by our sales personnel, conference and seminar expense of $1.2 million, legal fees of $0.9 million, audit, tax and valuation fees of $0.3 million, and other general operating costs of $0.4 million.

Previous wording

Other Income, Net. Other income, net for the three months ended March 31, 2025 was $3.2 million, as compared to $2.9 million for the three months ended March 31, 2024. The increase of $0.3 million was primarily due to an increase in interest income from our cash, cash equivalents, and short-term investments.

Current wording

Other Income, Net. Other income, net for the three months ended June 30, 2025 was $2.7 million, as compared to $2.8 million for the three months ended June 30, 2024. The decrease of $0.1 million was primarily due to a decrease in net accretion of discounts on short-term investments of $0.5 million, partially offset by an increase in interest income of $0.4 million from our cash, cash equivalents, and short-term investments.

Previous wording

Research and Development Expenses. Research and development expenses for the three months ended March 31, 2025 was $3.0 million, as compared to $5.2 million for the three months ended March 31, 2024. The decrease of $2.3 million was primarily due to decreases in CRO-related expenses of $1.6 million, personnel-related expenses of $0.4 million, stock-based compensation expense of $0.2 million, and consulting expense of $0.1 million.

Current wording

Research and Development Expenses. Research and development expenses for the six months ended June 30, 2025 was $7.0 million, as compared to $12.1 million for the six months ended June 30, 2024. The decrease of $5.1 million was primarily due to decreases in IPR&D expense of $2.1 million, clinical trial costs of $1.7 million, personnel-related expenses of $0.7 million, stock-based compensation expense of $0.5 million, and other research and development expenses of $0.4 million, partially offset by an increase in outside services of $0.3 million.

Previous wording

Since our inception, we have incurred significant operating losses and negative cash flows from our operations. We have recognized limited net product sales since the commercial launch ofneffyin September 2024. We have funded our operations to date primarily with proceeds from the Merger, private placement of convertible preferred stock, issuance of common stock, licensing, supply and distribution arrangements with our commercialization partners, bank debt, and limited net product sales. As of March 31, 2025, we had cash, cash equivalents, and short-term investments of $275.7 million.

Current wording

Since our inception, we have incurred significant operating losses and negative cash flows from our operations. We have recognized limited net product sales since the commercial launch ofneffyin September 2024. We have funded our operations to date primarily with proceeds from the Merger, private placement of convertible preferred stock, issuance of common stock, licensing, supply and distribution arrangements with our commercialization partners, bank debt, and limited net product sales. As of June 30, 2025, we had cash, cash equivalents, and short-term investments of $240.1 million.

Previous wording

The following table summarizes our cash flows for the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

The following table summarizes our cash flows for the six months ended June 30, 2025 and 2024 (in thousands):

Previous wording

During the three months ended March 31, 2025, net cash used in operating activities was $40.7 million. This consisted primarily of a net loss of $33.9 million, an increase in our operating assets of $14.4 million, an increase in our operating liabilities of $4.0 million, and non-cash charges of $3.6 million. The increase in our operating assets was due to increases in inventories of $8.4 million, prepaid expenses and other assets of $4.8 million, and accounts receivable of $1.1 million. The increase in our operating liabilities was due to an increase in accounts payable and accrued expenses of $4.2 million, partially offset by a decrease in contract liability of $0.2 million. The non-cash charges consisted primarily of non-cash stock-based compensation of $5.3 million and depreciation and amortization expense of $0.3 million, partially offset by $2.0 million in net accretion of discounts on short-term investments.

Current wording

During the six months ended June 30, 2025, net cash used in operating activities was $80.3 million. This consisted primarily of a net loss of $78.8 million, an increase in our operating assets and operating liabilities of $28.3 million and $16.8 million, respectively, and non-cash charges of $10.0 million. The increase in our operating assets was due to increases in accounts receivable of $14.4 million, inventories of $13.2 million, and prepaid expenses and other assets of $0.7 million. The increase in our operating liabilities was primarily attributable to an increase in accounts payable and accrued expenses of $17.0 million, partially offset by a decrease in contract liability of $0.2 million. The non-cash charges consisted primarily of non-cash stock-based compensation of $10.7 million, establishment of an inventory reserve of $2.2 million, and depreciation and amortization expense of $0.6 million, partially offset by $3.4 million in net accretion of discounts on short-term investments.

Previous wording

During the three months ended March 31, 2024, net cash used in operating activities was $6.7 million. This consisted primarily of a net loss of $10.3 million, an increase in our operating liabilities of $1.3 million, a decrease in our operating assets of $0.9 million, and non-cash charges of $1.3 million. The increase in our operating liabilities was primarily due to an increase in accounts payable and accrued liabilities of $1.3 million. The decrease in our operating assets was primarily due to a decrease in prepaid and other assets of $0.9 million. The non-cash charges consisted of non-cash stock-based compensation of $3.3 million, partially offset by $2.0 million in net accretion of discounts on short-term investments.

Current wording

During the six months ended June 30, 2024, net cash used in operating activities was $14.0 million. This consisted primarily of a net loss of $22.8 million, an increase in our operating liabilities of $4.4 million, a decrease in our operating assets of $1.6 million, and non-cash charges of $2.8 million. The increase in our operating liabilities was primarily due to an increase in accounts payable and accrued liabilities of $4.4 million. The decrease in our operating assets was primarily due to a decrease in prepaid and other assets of $1.6 million. The non-cash charges consisted of non-cash stock-based compensation of $6.7 million, partially offset by $3.9 million in net accretion of discounts on short-term investments.

Previous wording

During the three months ended March 31, 2025, the cash and cash equivalents provided by investing activities was $29.1 million. This consisted of maturities of short-term investments of $63.5 million, partially offset by purchases of short-term investments of $34.3 million and purchases of property and equipment of $0.1 million. During the three months ended March 31, 2024, the cash and cash equivalents used in investing activities was $8.5 million. This consisted primarily of purchases of short-term investments of $63.4 million, and purchases of property and equipment of $0.1 million, partially offset by maturities of short-term investments of $55.0 million.

Current wording

During the six months ended June 30, 2025, the cash and cash equivalents provided by investing activities was $77.6 million. This consisted of maturities of short-term investments of $143.5 million, partially offset by purchases of short-term investments of $65.7 million and purchases of property and equipment of $0.1 million. During the six months ended June 30, 2024, the cash and cash equivalents used in investing activities was $21.2 million. This consisted primarily of purchases of short-term investments of $151.0 million, maturities of short-term investments of $130.0 million, and purchases of property and equipment of $0.1 million.

Previous wording

During the three months ended March 31, 2025, the $0.7 million of cash and cash equivalents provided by financing activities was attributable to proceeds from stock option exercises. During the three months ended March 31, 2024, the $0.3 million of cash and cash equivalents provided by financing activities was attributable to proceeds from stock option exercises.

Current wording

During the six months ended June 30, 2025, the $3.4 million of cash and cash equivalents provided by financing activities was attributable to proceeds from stock option exercises and issuance of common stock under the employee stock purchase plan. During the six months ended June 30, 2024, the cash and cash equivalents provided by financing activities was $0.8 million, which consisted of proceeds from stock option exercises and issuance of common stock under the employee stock purchase plan.

Previous wording

The total amount of unconditional purchase obligations related to the supply of raw materials is $60.6 million as of March 31, 2025. Our estimated remaining payment obligations by year are as follows: 2025 ($4.0 million), 2026 ($10.5 million), 2027 ($11.8 million), 2028 ($13.8 million), and $2.9 million per year thereafter through 2035.

Current wording

The total amount of unconditional purchase obligations related to the supply of raw materials is $57.6 million as of June 30, 2025. Our estimated remaining payment obligations by year are as follows: 2025 ($0.9 million), 2026 ($10.5 million), 2027 ($11.8 million), 2028 ($13.8 million), and $2.9 million per year thereafter through 2035.

Previous wording

The total amount of unconditional purchase obligations related to hosted software license subscription fees is $3.0 million as of March 31, 2025. Our estimated remaining payment obligations by year are as follows: 2025 ($1.1 million), 2026 ($1.5 million), and 2027 ($0.4 million).

Current wording

The total amount of unconditional purchase obligations related to hosted software license subscription fees is $2.5 million as of June 30, 2025. Our estimated remaining payment obligations by year are as follows: 2025 ($0.6 million), 2026 ($1.5 million), and 2027 ($0.4 million).

Previous wording

In August 2024, we entered into a corporate sponsorship agreement with Food Allergy Research and Education, Inc. pursuant to which we have payment obligations of $9.0 million over a 28-month period. Our remaining payment obligations as of March 31, 2025 are $5.0 million. Our estimated remaining payment obligations by year are as follows: 2025 ($2.0 million), and 2026 ($3.0 million).

Current wording

In August 2024, we entered into a corporate sponsorship agreement with Food Allergy Research and Education, Inc., which was subsequently amended in May 2025, pursuant to which we have payment obligations of $14.0 million over a 43-month period. Our remaining payment obligations as of June 30, 2025 are $10.0 million. Our estimated remaining payment obligations by year are as follows: 2025 ($4.0 million), 2026 ($5.0 million), and 2027 ($1.0 million).

Previous wording

In June 2018, we entered into a License Agreement (the “Aegis Agreement”) with Aegis Therapeutics, LLC (“Aegis”). In November 2024, OrbiMed Advisors LLC (“OrbiMed”) entered into an agreement with Aegis, to purchase the rights, royalty interests, and related sales milestone payments on net product sales ofneffy. Our remaining payment obligations to OrbiMed under the Aegis Agreement are contingent upon our achievement of certain commercial milestones and have been reduced to $11.0 million as of March 31, 2025. Under the Aegis Agreement, we are also required to make royalty payments to OrbiMed based on a mid-single-digit percentage of net product sales. Future royalty payment amounts are indeterminate since they depend on future revenues, which are uncertain.

Current wording

In June 2018, we entered into a License Agreement (the “Aegis Agreement”) with Aegis Therapeutics, LLC (“Aegis”), a wholly owned subsidiary of Neurelis, Inc. In November 2024, OrbiMed Advisors LLC (“OrbiMed”) entered into an agreement with Aegis, to purchase the rights, royalty interests, and related sales milestone payments on net product sales ofneffy. Our remaining payment obligations to OrbiMed under the Aegis Agreement are contingent upon our achievement of certain commercial milestones and have been reduced to $11.0 million as of June 30, 2025. Under the Aegis Agreement, we are also required to make royalty payments to OrbiMed based on a mid-single-digit percentage of net product sales. Future royalty payment amounts are indeterminate since they depend on future revenues, which are uncertain.

Previous wording

In February 2023, we entered into a termination agreement (the “Recordati Termination Agreement”) with Recordati Ireland, Ltd. (“Recordati”) to reacquire the rights toneffyin Europe and certain European Free Trade Association, Russia/the Commonwealth of Independent States, Middle East and African countries (the “Recordati Territory”). Pursuant to which, we are obligated to make milestone payments to Recordati that are contingent upon our achievement of certain regulatory and commercial milestones. Our remaining milestone payment obligations to Recordati have been reduced to €5.0 million (approximately $5.4 million in U.S. dollars) as of March 31, 2025. Under the Recordati Termination Agreement, we are also required to make royalty payments to Recordati of up to €5.0 million (approximately $5.4 million in U.S. dollars) in the aggregate from sales of Recordati Licensed Product(s) in the Recordati Territory. Future royalty payment amounts are indeterminate since they depend on future revenues, which are uncertain.

Current wording

In February 2023, we entered into a termination agreement (the “Recordati Termination Agreement”) with Recordati Ireland, Ltd. (“Recordati”) to reacquire the rights toneffyin Europe and certain European Free Trade Association, Russia/the Commonwealth of Independent States, Middle East and African countries (the “Recordati Territory”). Pursuant to which, we are obligated to make milestone payments to Recordati that are contingent upon our achievement of certain regulatory and commercial milestones. Our remaining milestone payment obligations to Recordati have been reduced to €5.0 million (approximately $5.9 million in U.S. dollars) as of June 30, 2025. Under the Recordati Termination Agreement, we are also required to make royalty payments to Recordati of up to €5.0 million (approximately $5.9 million in U.S. dollars) in the aggregate from sales of Recordati Licensed Product(s) in the Recordati Territory. Future royalty payment amounts are indeterminate since they depend on future revenues, which are uncertain.

Previous wording

During the three months ended March 31, 2025, there were no material changes to our critical accounting policies or estimates. Our critical accounting policies and estimates are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in our Annual Report on Form 10-K filed with the SEC on March 20, 2025 and Note 2 – Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

During the six months ended June 30, 2025, there were no material changes to our critical accounting policies or estimates. Our critical accounting policies and estimates are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in our Annual Report on Form 10-K filed with the SEC on March 20, 2025 and Note 2 – Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year for which audited financial statements are available as of the date of determination and the market value of our stock held by non-affiliates is less than $700 million measured on the last business day of our most recently completed second fiscal quarter. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation and other matters.

Current wording

We are also a “smaller reporting company” as defined in the Exchange Act.