ARS Pharmaceuticals, Inc.

Previous wording

You should read the following discussion and analysis together with our unaudited condensed consolidated financial statements and related notes thereto included in “Item 1. Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q and the audited financial statements and related notes thereto as of and for the year ended December 31, 2024 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”), on March 20, 2025. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. For a complete discussion of forward-looking statements, see the section above entitled “Forward Looking Statements.” As a result of many factors, including those factors set forth in the under the caption “Item 1A. Risk Factors” of this Quarterly Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the “Risk Factors” section of this Quarterly Report to gain an understanding of the various factors that could cause actual results to differ materially from our forward-looking statements.

Current wording

You should read the following discussion and analysis together with our unaudited condensed consolidated financial statements and related notes thereto included in “Item 1. Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q and the audited financial statements and related notes thereto as of and for the year ended December 31, 2025 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”), on March 9, 2026. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. For a complete discussion of forward-looking statements, see the section above entitled “Special Note Regarding Forward-Looking Statements.” As a result of many factors, including those factors set forth under the caption “Item 1A. Risk Factors” of this Quarterly Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the “Risk Factors” section of this Quarterly Report to gain an understanding of the various factors that could cause actual results to differ materially from our forward-looking statements.

Previous 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 $3.5 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 $7.0 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”) and United Kingdom (“UK”) by the trade name EURneffyand in China by the trade name优敏速) for needle-free intranasal delivery of epinephrine for 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 also has approvals in the UK, Japan, Australia, China, and Canada. It is 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 forneffyin the United States is significant. At the current list price forneffyand 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 $3.5 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 $7.0 billion in annual net sales.

Previous wording

We believe neffy’s “no needle, no injection” approach addresses a significant unmet need in the use of epinephrine, which, except forneffy, is currently approved only in injectable formulations for the emergency treatment of Type I allergic reactions. There are approximately 40 million people in the United States who experience Type I allergic reactions. Of this group, approximately 20 million people have been diagnosed and experienced severe Type I allergic reactions that may lead to anaphylaxis, and approximately 6.5 million patients were prescribed an epinephrine autoinjector. However (in 2023, for example), only 3.2 million patients filled their active epinephrine autoinjector prescription, and of those, only half consistently carry their prescribed autoinjector with them due to the many drawbacks of these devices. Those estimated 3.2 million patients who currently fill their active epinephrine autoinjector prescription represent approximately $2.0 billion in annual U.S. net sales atneffy’s target total gross-to-net yield based on trailing 12-month epinephrine device unit volume as of September 2025.

Current wording

We believe neffy’s “no needle, no injection” approach addresses a significant unmet need in the use of epinephrine. There are approximately 40 million people in the U.S. who experience Type I allergic reactions. Of this group, approximately 20 million people are reported to have been diagnosed and experienced severe Type I allergic reactions that may lead to anaphylaxis, and approximately 6.5 million of those were prescribed an epinephrine autoinjector. However, in recent years, only an estimated one-half of those consistently carry their prescribed autoinjector with them. We believe the market opportunity forneffy in the U.S. is significant. Those estimated 3.2 million patients who currently fill their active epinephrine autoinjector prescription would represent approximately $1.8 billion in annual U.S. net sales atneffy’s target estimated gross-to-net yield based on epinephrine device unit volume in 2025.

Previous 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 September 30, 2025, our sales force is comprised of approximately 107 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 70 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 as well as for the ongoing collection of real-world evidence that supports neffy’s clinical equivalence to injection; extensive non-personal promotion including 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; ourneffy inSchools programs, where more than 6,500 schools to date have opted into receiving two cartons ofneffy at no cost with accompanying school nurse education about neffy; partnerships with patient advocacy organizations including disease awareness campaigns; and multi-channel branded direct to consumer advertising including connected television, point of care, endemic and programmatic display, social media, and paid search that initiated on mid-May 2025, as well as linear television advertising that started in late June 2025. To reduce the time burden of an in-person healthcare provider visit, we also launched a new commercial initiative in November 2025 called “Getneffyon Us” that offers patients a free visit with a virtual prescriber, along with a $0 co-pay for eligible patients with commercial insurance. 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, which is ongoing.

Current wording

Our launch strategy is also supported by: active participation since November 2024 of approximately 3,400 healthcare professionals in ourneffy experience program that allows healthcare professionals to useneffy firsthand as rescue therapy for anaphylaxis during in-clinic allergen challenge as well as for the ongoing collection of real-world evidence that supports neffy’s clinical equivalence to injection; extensive non-personal promotion including 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, including CVS Caremark, where the approval process is actively ongoing for addition ofneffyto CVS’ commercial formularies without prior authorization; our artificial intelligence solution to support healthcare providers by automating the checking and writing of prior authorizations; ourneffyconnect program that provides support to physicians and patients including our $25 co-pay savings card, $199 cash price available through all channels including retail via a denial-conversion system, and patient assistance programs; ourneffy inSchools programs, where more than 10,000 schools to date have opted into receiving two cartons ofneffy at no cost with accompanying school nurse education about neffy; partnerships with patient advocacy organizations including disease awareness campaigns; and multi-channel branded direct to consumer advertising including connected television, point of care, endemic and programmatic display, social media, and paid search, as well as linear television advertising. To reduce the time burden of an in-person healthcare provider visit, we also launched a new commercial initiative in November 2025 called “Getneffyon Us” that offers patients a free visit on our virtual prescriber website, getneffy.com, along with a $0 co-pay for eligible patients with commercial insurance. 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, which is ongoing.

Previous wording

On August 22, 2024, the European Commission 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 and in the United Kingdom (“U.K.”) in October 2025. We received approval ofneffy 2 mg and 1 mg doses in Japan in September 2025, with commercial launch by Alfresa, our partner in Japan, expected to start in the fourth quarter of 2025. Regulatory review ofneffyis ongoing in Canada and China 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 in the first quarter of 2026 in Canada, with launch expected to start in the first half of 2026, and in the first half of 2026 in China.

Current wording

In August 2024, the EC granted marketing authorization in the EU for EURneffy 2 mg (the trade name forneffy 2 mg in the EU and UK), for the emergency treatment of allergic reactions, including anaphylaxis, in adults and children who are four years of age and older who weigh 30 kg or greater. In March 2026, the EMA granted marketing authorization in the EU for EURneffy 1 mg for children who are four years of age and older who weigh 15 kg to less than 30 kg. Through our collaboration with ALK, EURneffy 2 mg was launched in Europe, beginning with Germany in June 2025, followed by the UK in October 2025. We received approval ofneffy 2 mg and 1 mg in Japan in September 2025, andneffy was launched in February 2026 by our collaboration partner, Alfresa. We also received approval ofneffy 2 mg and 1 mg in Australia in December 2025, andneffy was launched in February 2026 by our collaboration partner, Seqirus. In December 2025, we received approval in China of优敏速 (the trade name forneffy 2 mg in China), with commercial launch by our collaboration partner, Pediatrix, expected to start in the first half of 2026. In April 2026, we received approval in Canada ofneffy 2 mg, with commercial launch by our collaboration partner, ALK, expected later in 2026. neffyhas already been approved or is under regulatory review in countries representing approximately 98% of the current global epinephrine autoinjector sales market.

Previous wording

In September 2025, we reported survey results of anaphylaxis treatment outcomes in theneffy experience program, which provides 1 mg and 2 mg doses ofneffy to allergists for in-office use during an anaphylaxis event during oral food challenges or allergen immunotherapy. These results showed that approximately 90% of patients experiencing anaphylaxis symptoms were effectively treated with a single dose ofneffy, which is indistinguishable from that historically reported for epinephrine injection. The results were presented as an oral presentation at the American College of Allergy and Asthma Immunology in early November 2025.

Current wording

Real-world data supports that neffy delivers similar response rates as injections for the emergency treatment of Type I allergic reactions. In September 2025, we reported survey results of anaphylaxis treatment outcomes in theneffy experience program, which provides 1 mg and 2 mg doses ofneffy to allergists for in-office use if patients experience an anaphylactic event during oral food challenges or allergen immunotherapy. These results showed that approximately 90% of patients experiencing anaphylaxis symptoms were effectively treated with a single dose ofneffy, which is consistent with that historically reported for epinephrine injection. The results were presented as an oral presentation at the American College of Allergy, Asthma and Immunology (“ACAAI”) meeting in early November 2025 and was also published in the Annals of Allergy, Asthma and Immunology, the official peer-reviewed journal of the ACAAI, in December 2025. In addition, more than 200 successful uses ofneffy to treat anaphylaxis episodes in school have been reported to date by nurses through ourneffy inSchools program.

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. 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 mid-2026, followed by the potential initiation of a single pivotal efficacy study.

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. The interim analysis population is fully enrolled as of May 2026, and interim data from this clinical trial is anticipated in the fourth quarter of 2026, followed by the potential initiation of a single Phase 3 pivotal efficacy study in mid-2027.

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 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, debt, and net product sales. As of September 30, 2025, we had cash, cash equivalents, and short-term investments of $288.2 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 have funded our operations primarily with proceeds from the merger with Silverback Therapeutics, Inc. (“Silverback”) in November 2022 (the “Merger”), private placement of convertible preferred stock, issuance of common stock, licensing, supply and distribution arrangements with our commercialization partners, debt, and net product sales. As of March 31, 2026, we had cash, cash equivalents, and short-term investments of $201.0 million.

Previous wording

We have incurred net losses in most years since our inception. Net losses for the nine months ended September 30, 2025 and 2024 were $130.0 million and $41.9 million, respectively. As of September 30, 2025, we had an accumulated deficit of $253.3 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 in most years since our inception. Net loss for the three months ended March 31, 2026 and 2025 was $60.6 million and $33.9 million, respectively. As of March 31, 2026, we had an accumulated deficit of $355.2 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 royalties and regulatory and commercial milestones under our license and collaboration arrangements.

Previous wording

Cost of goods sold consists primarily of direct and indirect costs to manufacture neffyfor 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, certain inventory components were purchased to manufacture neffyand recorded as research and development expenses, resulting in zero-cost inventory components. As a result, the cost of goods sold related toneffy will initially reflect a lower average per unit cost of materials, as previously expensed inventory components are consumed in commercial production and sold to customers.

Current wording

Cost of goods sold consists primarily of direct and indirect costs to manufacture neffyfor commercial sale, including 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, royalties on product sales, salaries and related expenses for personnel, and stock-based compensation. Prior to the FDA approval ofneffyin August 2024, certain inventory components were purchased to manufacture neffyand recorded as research and development expenses, resulting in zero-cost inventory components. As a result, the cost of goods sold related toneffy will initially reflect a lower average per unit cost of materials, as previously expensed inventory components are consumed in commercial production and sold to customers.

Previous wording

As of September 30, 2025, we had $8.4 million in zero-cost inventory components remaining, and no zero-cost inventory components were determined to be obsolete. Based on our current forecast, we expect zero-cost inventory components to be substantially consumed in commercial production by mid-2026. The time over which the zero-cost inventory components are included in cost of goods sold will depend on several factors, but primarily the timing of future neffy sales.

Current wording

As of March 31, 2026, we had $5.3 million in zero-cost inventory components remaining, and no zero-cost inventory components were determined to be obsolete. Based on our current forecast, we expect zero-cost inventory components to be substantially consumed in commercial production by the second half of 2026. The time over which the zero-cost inventory components are included in cost of goods sold will depend on several factors, but primarily the timing of future neffy sales.

Previous wording

costs related to compliance with regulatory requirements and regulatory filings; and

Current wording

costs related to compliance with regulatory requirements and regulatory filings;

Previous wording

indirect expenses including insurance and facility-related expenses.

Current wording

indirect expenses including insurance and facility-related expenses; and

Previous wording

Selling, general and administrative expenses consist primarily of salaries, benefits, stock-based compensation for personnel in executive, finance, business development, sales and marketing and other corporate administrative functions. Selling, general and administrative expenses also include pre-commercial launch activities prior to product launch, the initiation of commercialization activities in September 2024, legal fees incurred relating to corporate and patent matters, professional fees incurred for accounting, auditing, tax and administrative consulting services, and insurance costs.

Current wording

Selling, general and administrative expenses consist primarily of marketing-related expenses and salaries, benefits, stock-based compensation for personnel in executive, finance, business development, sales and marketing, and other corporate administrative functions. Selling, general and administrative expenses also include legal fees incurred relating to corporate and patent matters, professional fees incurred for accounting, auditing, tax and administrative consulting services, and insurance costs.

Previous wording

Selling, general and administrative expenses have increased since the third quarter of 2024 due to the establishment of our sales force, the development and commencement of our marketing campaigns and initiatives, the ALK Co-Promotion Agreement, the hiring of additional sales and marketing personnel to support full commercialization activities, and the addition of infrastructure and programs to support commercialization activities. We expect to continue to incur audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, board of director fees, investor relations costs associated with operating as a public company, patent costs and defense, and general and administrative personnel.

Current wording

Selling, general and administrative expenses have increased due to the establishment of our sales force, the development and commencement of our marketing campaigns and initiatives, the co-promotion agreement between us and ALK-Abelló, Inc., which was entered into in May 2025 and subsequently amended in October 2025 and March 2026 (the “ALK Co-Promotion Agreement”), the hiring of additional sales and marketing personnel to support full commercialization activities, and the addition of infrastructure and programs to support commercialization activities. We expect to continue to incur audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, board of director fees, investor relations costs associated with operating as a public company, patent costs and defense, and general and administrative personnel.

Previous wording

Revenues. Revenue for the three months ended September 30, 2025 was $32.5 million, as compared to $2.1 million for the three months ended September 30, 2024. Revenue for the three months ended September 30, 2025 includes $31.3 million in net product revenues for sales ofneffy in the United States, $1.1 million in revenue under supply agreements with partners, and less than $0.1 million in revenue for the performance of development and regulatory services performance obligations under the ALK Collaboration Agreement. Revenue for the three months ended September 30, 2024 includes $0.6 million in net product revenues for sales ofneffy and $1.5 million in revenue for the first milestone event under the Seqirus Agreement.

Current wording

Revenues. Revenue for the three months ended March 31, 2026 was $22.7 million, as compared to $8.0 million for the three months ended March 31, 2025. Revenue for the three months ended March 31, 2026 includes $17.5 million in net product revenues for sales ofneffyin the United States, $2.5 million in revenue for the achievement of the regulatory milestone and performance of development and regulatory services under the collaboration, license and distribution agreement we entered into with ALK-Abelló A/S in November 2024 (the “ALK Collaboration Agreement”), and $2.7 million in revenue under supply agreements with partners. 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 the performance of development and regulatory services under the ALK Collaboration Agreement.

Previous wording

Research and Development Expenses. Research and development expenses for the three months ended September 30, 2025 was $2.8 million, as compared to $4.4 million for the three months ended September 30, 2024. The decrease of $1.7 million was primarily due to decreases in product development-related expense of $1.5 million, outside services of $0.4 million, and other research and development expenses of $0.2 million, partially offset by an increase in clinical trial costs of $0.4 million.

Current wording

Research and Development Expenses. Research and development expenses for the three months ended March 31, 2026 was $4.3 million, as compared to $3.0 million for the three months ended March 31, 2025. The increase of $1.4 million was primarily due to increases in product-development related expense of $0.5 million, personnel-related expenses, including stock-based compensation expense, of $0.5 million, and other research and development expenses of $0.4 million.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three months ended September 30, 2025 was $74.8 million, as compared to $19.3 million for the three months ended September 30, 2024. The increase of $55.5 million was primarily due to increases in marketing-related expenses of $41.6 million, personnel-related expenses of $7.9 million, stock-based compensation expense of $2.2 million, outside services of $1.5 million, travel and meals expense of $1.1 million incurred by our sales personnel, and other general operating costs of $1.2 million.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three months ended March 31, 2026 was $72.2 million, as compared to $41.1 million for the three months ended March 31, 2025. The increase of $31.1 million was primarily due to increases in marketing-related expenses of $26.4 million, stock-based compensation expense of $1.9 million, legal fees of $0.9 million, outside services of $0.9 million, conference and seminar expense of $0.6 million, and other general operating costs of $0.4 million.

Previous wording

Other Income, Net. Other income, net for the three months ended September 30, 2025 was $2.0 million, as compared to $2.6 million for the three months ended September 30, 2024. The decrease of $0.6 million was primarily due to a decrease in net accretion of discounts on short-term investments of $0.9 million, partially offset by an increase in interest income of $0.3 million from our cash, cash equivalents, and short-term investments.

Current wording

Other (Expense) Income, Net. Other expense, net for the three months ended March 31, 2026 was $0.5 million, as compared to other income, net of $3.2 million for the three months ended March 31, 2025. The change of $3.7 million was primarily due to interest expense related to our Credit Agreement of $2.4 million and decreases in net accretion of discounts on short-term investments of $1.1 million and interest income of $0.2 million from our cash, cash equivalents, and short-term investments.

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, debt, and net product sales. As of September 30, 2025, we had cash, cash equivalents, and short-term investments of $288.2 million.

Current wording

Since our inception, we have incurred significant operating losses and negative cash flows from our operations. We have funded our operations to date primarily with proceeds from the Merger with Silverback, private placement of convertible preferred stock, issuance of common stock, licensing, supply and distribution arrangements with our commercialization partners, debt, and net product sales. As of March 31, 2026, we had cash, cash equivalents, and short-term investments of $201.0 million.

Previous wording

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

Current wording

The following table summarizes our cash flows for the three months ended March 31, 2026 and 2025 (in thousands):

Previous wording

During the nine months ended September 30, 2024, net cash used in operating activities was $28.5 million. This consisted primarily of a net loss of $41.9 million, an increase in our operating liabilities of $8.7 million, a decrease in our operating assets of $0.1 million, and non-cash charges of $4.6 million. The increase in our operating liabilities was primarily due to an increase in accounts payable and accrued liabilities of $8.7 million. The decrease in our operating assets was primarily due to a decrease in prepaid and other assets of $1.1 million, partially offset by an increase in accounts receivable of $0.8 million and an increase in inventories of $0.2 million. The non-cash charges consisted of non-cash stock-based compensation of $10.3 million, partially offset by $5.7 million in net accretion of discounts on short-term investments.

Current wording

During the three months ended March 31, 2026, net cash used in operating activities was $44.9 million. This consisted primarily of a net loss of $60.6 million, an increase in our operating assets and operating liabilities of $1.7 million and $10.3 million, respectively, and non-cash charges of $7.1 million. The increase in our operating assets was primarily attributable to increases in accounts receivable of $0.8 million and prepaid expenses and other assets of $0.5 million. The increase in our operating liabilities was primarily attributable to an increase in accounts payable and accrued expenses of $10.3 million. The non-cash charges consisted primarily of non-cash stock-based compensation of $7.4 million, partially offset by $1.0 million in net accretion of discounts on short-term investments.

Previous wording

During the nine months ended September 30, 2025, net cash used in operating activities was $127.4 million. This consisted primarily of a net loss of $130.0 million, an increase in our operating assets and operating liabilities of $40.3 million and $27.7 million, respectively, and non-cash charges of $15.1 million. The increase in our operating assets was due to increases in accounts receivable of $28.4 million and inventories of $12.3 million, partially offset by a decrease in prepaid expenses and other assets of $0.4 million. The increase in our operating liabilities was primarily attributable to an increase in accounts payable and accrued expenses of $27.9 million, partially offset by a decrease in contract liability of $0.3 million. The non-cash charges consisted primarily of non-cash stock-based compensation of $16.4 million, establishment of an inventory reserve of $2.2 million, and depreciation and amortization expense of $1.0 million, partially offset by $4.5 million in net accretion of discounts on short-term investments.

Current 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.

Previous wording

During the nine months ended September 30, 2025, the cash and cash equivalents provided by investing activities was $32.7 million. This consisted of maturities of short-term investments of $232.0 million, partially offset by purchases of short-term investments of $193.1 million, payments of milestone obligations under license agreements of $5.9 million, and purchases of property and equipment of $0.3 million. During the nine months ended September 30, 2024, the cash and cash equivalents used in investing activities was $4.3 million. This consisted primarily of purchases of short-term investments of $192.6 million, maturities of short-term investments of $191.0 million, payments of milestone obligations under license agreements of $2.5 million, and purchases of property and equipment of $0.3 million.

Current wording

During the three months ended March 31, 2026, cash and cash equivalents provided by investing activities was $27.8 million. This consisted primarily of maturities of short-term investments of $42.5 million, partially offset by purchases of short-term investments of $14.7 million. During the three months ended March 31, 2025, 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.

Previous wording

During the nine months ended September 30, 2025, the $103.5 million of cash and cash equivalents provided by financing activities was attributable to net proceeds from the term loan under the Credit Agreement of $97.8 million, proceeds from stock option exercises and issuance of common stock under the employee stock purchase plan of $3.9 million, and proceeds from milestone obligations met under license agreements of $2.6 million, partially offset by payments of term loan issuance costs of $0.8 million. During the nine months ended September 30, 2024, the cash and cash equivalents provided by financing activities was $1.5 million, which consisted of proceeds from stock option exercises and issuance of common stock under the employee stock purchase plan.

Current wording

During the three months ended March 31, 2026, the $0.2 million of cash and cash equivalents provided by financing activities was attributable to proceeds from stock option exercises and proceeds from royalties earned under license agreements. 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.

Previous wording

Based on our current operating plan, we believe that our existing cash, cash equivalents, short-term investments, and revenues from product sales and cash proceeds from collaboration and out-licensing agreements will be sufficient to meet our anticipated cash requirements through at least the next three years. In particular, we expect our existing cash, cash equivalents, short-term investments, and revenues from net product sales and cash proceeds from collaboration and out-licensing agreements will allow us to fund commercial manufacturing and sales and marketing activities, general operating activities and working capital requirements, and proof of concept clinical trials ofneffyfor additional indications. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain.

Current wording

Based on our current operating plan, we believe that our existing cash, cash equivalents, short-term investments, revenues from product sales, and cash proceeds from collaboration and out-licensing agreements will be sufficient to meet our anticipated cash requirements until we achieve cash-flow break-even. In particular, we expect these resources will allow us to fund commercial manufacturing and sales and marketing activities, general operating activities and working capital requirements, and proof of concept clinical trials ofneffyfor additional indications. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain.

Previous wording

The total amount of unconditional purchase obligations related to the supply of raw materials is $56.9 million as of September 30, 2025. Our estimated remaining payment obligations by year are as follows: 2025 ($0.2 million), 2026 ($10.4 million), 2027 ($11.8 million), 2028 ($13.8 million), and $2.9 million per year thereafter through 2035.

Current wording

The remaining unconditional purchase obligations related to the supply of raw materials totaled $55.3 million as of March 31, 2026. Our remaining obligations by year are as follows: 2026 ($9.1 million), 2027 ($11.8 million), 2028 ($13.8 million), and $2.9 million per year thereafter through 2035.

Previous wording

In May 2025, we entered into the ALK Co-Promotion Agreement with ALK U.S. to co-promote neffy to up to 9,000 specified pediatricians and other prescribers in the U.S. Pursuant to the ALK Co-Promotion Agreement, we will pay ALK U.S. a base fee to compensation ALK U.S. for its promotion activities. Payments for the first year of the partnership will be deferred and paid in the second year of the partnership. The total remaining payment obligations under this agreement are $26.8 million as of September 30, 2025. Our remaining payment obligations by year are as follows: 2025 ($0.0 million), 2026 ($4.4 million), 2027 ($14.2 million), 2028 ($4.6 million), and 2029 ($3.6 million). In addition to the base fee, ALK U.S will be eligible to receive performance-based payments from us. Future performance-based payment amounts are indeterminate since they depend on future revenues, which are uncertain.

Current wording

Under the ALK Co-Promotion Agreement, the remaining obligation totaled $28.3 million as of March 31, 2026. Our remaining obligations by year are as follows: 2026 ($4.4 million), 2027 ($14.6 million), 2028 ($5.8 million), and 2029 ($3.6 million). In addition to the base fee, ALK U.S will be eligible to receive performance-based payments from us. Future performance-based payment amounts are indeterminate since they depend on future revenues, which are uncertain.

Previous 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 September 30, 2025 are $7.0 million. Our estimated remaining payment obligations by year are as follows: 2025 ($1.0 million), 2026 ($5.0 million), and 2027 ($1.0 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. Our remaining obligations under this agreement totaled $5.0 million as of March 31, 2026. Our remaining obligations by year are as follows: 2026 ($4.0 million) and 2027 ($1.0 million).

Previous wording

In September 2025, we entered into the Credit Agreement with the Administrative Agent and Lenders. The outstanding principal of $100.0 million at September 30, 2025 is due upon maturity on September 29, 2030. Estimated interest payments are calculated based on the outstanding principal, the applicable interest rate and expected timing of scheduled payments as of September 30, 2025. As of September 30, 2025, based on the interest rate in effect at such date, total estimated interest payments are $48.1 million, and our estimated interest payments by year are as follows: 2025 ($2.5 million), 2026 ($9.6 million), 2027 ($9.6 million), 2028 ($9.6 million), 2029 ($9.6 million), and 2030 ($7.2 million).

Current wording

Under the Credit Agreement, the outstanding principal of $100.0 million as of March 31, 2026 is due upon maturity on September 29, 2030. Estimated interest payments are calculated based on the outstanding principal, the applicable interest rate and expected timing of scheduled payments as of March 31, 2026. As of March 31, 2026, based on the interest rate in effect at such date, estimated remaining interest payments are $41.9 million, and our estimated remaining interest payments by year are as follows: 2026 ($7.0 million), 2027 ($9.3 million), 2028 ($9.3 million), 2029 ($9.3 million), and 2030 ($6.9 million).

Previous 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 September 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.

Current wording

Under the Aegis Agreement, remaining payment obligations to OrbiMed are contingent upon our achievement of certain commercial milestones and totaled $9.0 million as of March 31, 2026. 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”). Under the Recordati Termination Agreement, we are required to make royalty payments to Recordati of up to €5.0 million in the aggregate from sales of Recordati Licensed Product(s) in the Recordati Territory, of which up to €4.8 million (approximately $5.7 million in U.S. dollars) remain. 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”). Under the Recordati Termination Agreement, we are required to make royalty payments to Recordati of up to €5.0 million in the aggregate from sales ofneffyin the Recordati Territory, of which up to €4.6 million (approximately $5.2 million in U.S. dollars) remain outstanding as of March 31, 2026. Future royalty payment amounts are indeterminate since they depend on future revenues, which are uncertain.

Previous wording

During the nine months ended September 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.

Current wording

During the three months ended March 31, 2026, 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 9, 2026 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

See 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 for additional information.

Current wording

See 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 for additional information about recent accounting pronouncements, the timing of their adoption, and our assessment, if any, of their potential impact on our financial condition and results of operations.