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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-39756

ARS Pharmaceuticals, Inc.

(Exact name of Registrant as specified in its Charter)



Delaware	81-1489190
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

11682 El Camino Real, Suite 300 San Diego, California	92130
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (858) 771-9307

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	SPRY	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 6, 2025, there were 98,848,611 shares of registrant’s common stock, $0.0001 par value per share, outstanding.

Table of Contents


		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	7
	Condensed Consolidated Balance Sheets	7
	Condensed Consolidated Statements of Operations and Comprehensive Loss	8
	Condensed Consolidated Statements of Stockholders’ Equity	9
	Condensed Consolidated Statements of Cash Flows	11
	Notes to Unaudited Condensed Consolidated Financial Statements	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	52
Item 4.	Controls and Procedures	53

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	110
Item 5.	Other Information	110
Item 6.	Exhibits	111

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

•

future economic conditions or performance, including neffy net product revenues and net product sales;

•

research and development plans, including planned clinical trials, for our current or future intranasal epinephrine technology product candidates;

•

the expected timing for reporting data;

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our expectations regarding the European Medicines Agency’s (“EMA”) review of our post-approval variation for neffy 1 mg;

•

our plans to submit regulatory filings for neffy in additional geographies in collaboration with our partners and the timing thereof;

•

the expected timing for regulatory review decisions for neffy and our intranasal epinephrine technology product candidates;

•

the commercial potential of and commercialization strategy for neffy and our intranasal epinephrine technology product candidates;

•

the size of the markets (including annual sales opportunities) for our current and future product candidates, as well as for neffy, for its currently approved indications in the United States and the European Union (“EU”), the projected growth thereof, and our, and our collaboration and marketing partners’, ability to capture and grow those markets;

•

the rate and degree of market acceptance of neffy and any future product candidates;

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our expected competitive position;

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our potential to become the standard in treatment and transform the treatment of allergic reactions;

•

the likelihood of neffy attaining and maintaining favorable coverage;

•

the expected intellectual property protection for neffy;

•

legislative and regulatory developments in the United States and foreign countries;

•

estimates regarding anticipated operating losses, capital requirements and needs for additional funds;

•

our ability to satisfy our obligations, comply with the covenants, and access, if needed, additional credit under our credit agreement;

•

our ability to obtain, maintain and successfully enforce adequate patent and other intellectual property protection for neffy or any future product candidate; and

•

statements of belief and any statement of assumptions underlying any of the foregoing.

Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part II, Item 1A, “Risk Factors” of this Quarterly Report. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

Unless the context otherwise indicates, references in this Quarterly Report to the terms “ARS”, “the Company”, “we”, “our” and “us” refer to ARS Pharmaceuticals, Inc. and its consolidated subsidiaries, and references to our “common stock” refers to our voting common stock.

neffy is a trademark of ours that we use in this Quarterly Report. This Quarterly Report also includes trademarks, trade names, and service marks that are the property of other organizations. Solely for convenience, our trademarks and trade names referred to in this Quarterly Report appear without the ® or ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the right of the applicable licensor, to our trademark and trade names. The use or display of other companies’ trade names or trademarks do not suggest or imply a relationship or affiliation with, or endorsement or sponsorship of us by, any other companies.

SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS

An investment in shares of our common stock involves a high degree of risk. Below is a list of the more significant risks associated with our business. This summary does not address all of the risks that we face. Additional discussion of the risks listed in this summary, as well as other risks that we face, are set forth under Part II, Item 1A, “Risk Factors” in this Quarterly Report. Some of the material risks associated with our business include the following:

•

We are highly dependent on the successful commercialization of neffy in the United States and in the EU for its currently approved indications in those jurisdictions. To the extent neffy is not commercially successful, our business, financial condition and results of operations would be materially adversely affected, and the price of our common stock would likely decline.

•

neffy and our current and future intranasal epinephrine technology product candidates may fail to achieve the degree of market acceptance by allergists, pediatricians and other physicians, patients, caregivers, third-party payors and others in the medical community necessary for commercial success, in which case we may not generate significant revenues or profits.

•

If we are unable to achieve and maintain adequate levels of third-party payor coverage and reimbursement for neffy on reasonable pricing terms, its commercial success may be severely hindered.

•

Competitive products may reduce or eliminate the commercial opportunity for neffy or our current and future intranasal epinephrine technology product candidates. If our competitors develop technologies or product candidates more rapidly than us, or their technologies or product candidates are more effective or safer than ours, our ability to develop and successfully commercialize neffy and our current and future intranasal epinephrine technology product candidates may be adversely affected.

•

If we are unable to successfully develop our current or future intranasal epinephrine technology product candidates, or neffy for additional indications, or experience significant delays in doing so, the commercial potential of our current or future intranasal epinephrine technology product candidates or neffy will be more limited.

•

If the U.S. Food and Drug Administration (“FDA”) does not conclude that our current or future intranasal epinephrine technology product candidates, or neffy for additional indications, satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for such product candidates or additional indications under Section 505(b)(2) are not as we expect, the approval pathway for those product candidates or additional indications will likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful.

•

Product liability lawsuits against us or any of our current and future licensing and collaboration partners could divert our resources and attention, cause us to incur substantial liabilities and limit commercialization of neffy or our current or future intranasal epinephrine technology product candidates.

•

If our information technology systems or data, or those of third parties with whom we work, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences.

•

We rely completely on third parties to manufacture and warehouse both our domestic and international supply of neffy and our current and future intranasal epinephrine technology product candidates.

•

We are dependent on international third-party licensees and assignees for the development and commercialization of neffy and our current and future intranasal epinephrine technology product candidates outside the United States. If these third parties are not successful in their development and commercialization efforts or if these third parties fail to meet their contractual, regulatory or other obligations, our business and results of operations could be adversely affected.

•

International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects.

•

We expect that our timing of sales and results of operations will fluctuate for the foreseeable future, which may make it difficult to predict our future performance from period to period.

•

We have incurred significant losses since our inception.

•

We may need additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development activities or commercialization efforts.

•

Our commercial success depends on our ability to obtain and maintain sufficient intellectual property protection for neffy, our current and future intranasal epinephrine technology product candidates and other proprietary technologies.

•

Our Credit Agreement contains conditions and restrictions that limit our flexibility in drawing on the additional funds thereunder and in operating our business. We may be required to repay our outstanding indebtedness under the Credit Agreement earlier than we expect and possibly at a time when we do not have sufficient capital to meet such obligations if an event of default occurs (including a material adverse change affecting our business), which could have a material adverse effect on our financial condition and results of operations.

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Our success is highly dependent on our ability to attract and retain highly skilled executive officers and employees.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ARS Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except par value and share amounts)


	September 30, 2025			December 31, 2024
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	59,557		$	50,817
Short-term investments		228,652			263,205
Accounts receivable, net		36,451			8,175
Inventories		7,782			5,212
Prepaid expenses and other current assets		6,421			6,886
Total current assets		338,863			334,295
Long-term inventories		13,645			5,307
Right-of-use asset		1,439			37
Fixed assets, net		1,209			1,029
Intangible assets, net		14,729			7,371
Other assets		2,918			3,114
Total assets	$	372,803		$	351,153
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued liabilities (including related party amounts of $4,269 and $656, respectively)	$	49,768		$	22,841
Contract liability, current		526			557
Lease liability, current		583			42
Total current liabilities		50,877			23,440
Term loans, net (including related party amounts of $4,811 and $0, respectively)		96,229			—
Financing liability		72,044			69,383
Contract liability, net of current portion		1,268			1,532
Lease liability, net of current portion		949			—
Other accrued liabilities		3,781			—
Total liabilities		225,148			94,355
Commitments and contingencies (Note 10)
Stockholders’ equity
Preferred stock, $0.0001 par value per share; 10,000,000 shares authorized at September 30, 2025 and December 31, 2024; no shares issued and outstanding at September 30, 2025 and December 31, 2024		—			—
Common stock, $0.0001 par value per share; 200,000,000 shares authorized at September 30, 2025 and December 31, 2024; 98,844,178 and 97,954,172 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		10			10
Additional paid-in capital		400,931			379,873
Accumulated other comprehensive (loss) gain, net		(7	)		220
Accumulated deficit		(253,279	)		(123,305	)
Total stockholders’ equity		147,655			256,798
Total liabilities and stockholders’ equity	$	372,803		$	351,153

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ARS Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

(unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Revenue:
Product revenue, net	$	31,300		$	568		$	51,863		$	568
Revenue under collaboration agreements		55			1,500			2,859			2,000
Revenue under supply agreements		1,146			—			1,469			—
Total revenue		32,501			2,068			56,191			2,568
Operating expenses:
Cost of goods sold (including related party amounts of $2,046, $0, $3,400, and $0, respectively)		8,191			112			14,269			112
Research and development (including related party amounts of $559, $406, $1,804, and $1,651, respectively)		2,751			4,423			9,738			16,553
Selling, general and administrative (including related party amounts of $123, $129, $354, and $337, respectively)		74,751			19,281			170,167			36,183
Total operating expenses		85,693			23,816			194,174			52,848
Loss from operations		(53,192	)		(21,748	)		(137,983	)		(50,280	)
Other income (expense), net (including related party amounts of $(3), $0, $(3), and $0, respectively)		2,041			2,620			8,009			8,344
Net loss	$	(51,151	)	$	(19,128	)	$	(129,974	)	$	(41,936	)
Change in unrealized gains and losses on available-for-sale securities		39			484			(227	)		290
Comprehensive loss	$	(51,112	)	$	(18,644	)	$	(130,201	)	$	(41,646	)
Net loss per share, basic and diluted	$	(0.52	)	$	(0.20	)	$	(1.32	)	$	(0.43	)
Weighted-average shares outstanding used in computing net loss per share, basic and diluted		98,807,600			97,032,331			98,412,739			96,782,818

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ARS Pharmaceuticals, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

(unaudited)


							Accumulated
	Common						Other						Total
	Stock				Additional		Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Paid-in Capital		Gain (Loss), Net			Deficit			Equity
Balance at December 31, 2024		97,954,172	$	10	$	379,873	$	220		$	(123,305	)	$	256,798
Exercise of common stock options and release of restricted stock units		175,632		—		725		—			—			725
Stock-based compensation		—		—		5,539		—			—			5,539
Net loss and comprehensive loss		—		—		—		(148	)		(33,940	)		(34,088	)
Balance at March 31, 2025		98,129,804		10		386,137		72			(157,245	)		228,974
Exercise of common stock options and issuance of common stock under the employee stock purchase plan		567,854		—		2,697		—			—			2,697
Stock-based compensation		—		—		5,651		—			—			5,651
Net loss and comprehensive loss		—		—		—		(118	)		(44,883	)		(45,001	)
Balance at June 30, 2025		98,697,658		10		394,485		(46	)		(202,128	)		192,321
Exercise of common stock options		146,520		—		479		—			—			479
Stock-based compensation		—		—		5,967		—			—			5,967
Net loss and comprehensive loss		—		—		—		39			(51,151	)		(51,112	)
Balance at September 30, 2025		98,844,178	$	10	$	400,931	$	(7	)	$	(253,279	)	$	147,655

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ARS Pharmaceuticals, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

(unaudited)


							Accumulated
	Common						Other						Total
	Stock				Additional		Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Paid-in Capital		Gain (Loss), Net			Deficit			Equity
Balance at December 31, 2023		96,414,963	$	10	$	362,004	$	49		$	(131,303	)	$	230,760
Exercise of common stock options and release of restricted stock units		159,086		—		258		—			—			258
Stock-based compensation		—		—		3,315		—			—			3,315
Net loss and comprehensive loss		—		—		—		(173	)		(10,292	)		(10,465	)
Balance at March 31, 2024		96,574,049		10		365,577		(124	)		(141,595	)		223,868
Exercise of common stock options, shares issued under the employee stock purchase plan, and release of restricted stock units		365,748		—		545		—			—			545
Stock-based compensation		—		—		3,365		—			—			3,365
Net loss and comprehensive loss		—		—		—		(21	)		(12,516	)		(12,537	)
Balance at June 30, 2024		96,939,797		10		369,487		(145	)		(154,111	)		215,241
Exercise of common stock options and release of restricted stock units		207,645		—		680		—			—			680
Stock-based compensation		—		—		3,701		—			—			3,701
Net loss and comprehensive loss		—		—		—		484			(19,128	)		(18,644	)
Balance at September 30, 2024		97,147,442	$	10	$	373,868	$	339		$	(173,239	)	$	200,978

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ARS Pharmaceuticals, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Nine Months Ended September 30,
	2025			2024
Cash flows from operating activities:
Net loss	$	(129,974	)	$	(41,936	)
Non-cash adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		16,358			10,271
Depreciation and amortization expense		950			50
Accretion on investments, net of amortization		(4,520	)		(5,710	)
Provision for inventory reserve		2,160			—
Other non-cash items		186			—
Changes in operating assets and liabilities:
Accounts receivable		(28,382	)		(773	)
Inventories		(12,269	)		(183	)
Prepaid expenses and other assets		372			1,060
Donation of equipment		—			30
Accounts payable and accrued liabilities		27,945			8,749
Operating lease right-of-use asset and lease liability, net		88			(14	)
Contract liability		(295	)		—
Net cash and cash equivalents used in operating activities		(127,381	)		(28,456	)
Cash flows from investing activities:
Purchases of short-term investments, available-for-sale		(193,147	)		(192,580	)
Maturities of short-term investments, available-for-sale		232,000			191,000
Payments of milestone obligations under license agreements		(5,860	)		(2,500	)
Purchases of property and equipment		(339	)		(261	)
Net cash and cash equivalents provided by (used in) investing activities		32,654			(4,341	)
Cash flows from financing activities:
Proceeds from term loan, net of issuance costs		97,750			—
Payment of term loan issuance costs to third parties		(761	)		—
Proceeds from milestone obligations met under license agreements recognized as an increase to the financing liability		2,577			—
Proceeds from exercise of common stock options and issuance of common stock under the employee stock purchase plan		3,901			1,483
Net cash and cash equivalents provided by financing activities		103,467			1,483
Net increase (decrease) in cash and cash equivalents		8,740			(31,314	)
Cash and cash equivalents at beginning of period		50,817			70,971
Cash and cash equivalents at end of period	$	59,557		$	39,657
Supplemental cash flow information:
Intangible assets included in accounts payable and accrued liabilities	$	2,000		$	5,000
Right-of-use asset obtained in exchange for operating lease obligations	$	1,630		$	—
Debt issuance costs included in accounts payable and accrued liabilities	$	763		$	—
Purchases of property and equipment in accounts payable	$	—		$	87

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ARS Pharmaceuticals, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Nature of Business

Description of Business

ARS Pharmaceuticals, Inc. (“ARS”, “ARS Pharma” or the “Company”) is a biopharmaceutical company focused on the commercialization and development of neffy (currently identified in the EU by the trade name EURneffy) for the needle-free intranasal delivery of epinephrine for the emergency treatment of Type I allergic reactions, including anaphylaxis. neffy is the first and only FDA and European Commission-approved needle-free epinephrine product, and the first new delivery method for epinephrine in more than 35 years.

The Company incorporated in Delaware in January 2016 and is located in San Diego, California. The Company has a wholly owned subsidiary, ARS Pharmaceuticals Operations, Inc., incorporated in Delaware in August 2015, through which it conducts substantially all its operations. ARS Pharmaceuticals Operations, Inc. has a wholly owned subsidiary in Ireland, ARS Pharmaceuticals IRL, Limited, to facilitate the filing of regulatory approval for neffy in European countries.

Liquidity and Capital Resources

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred net operating losses in most years since its inception and had an accumulated deficit of $253.3 million as of September 30, 2025. The Company had cash, cash equivalents, and short-term investments of $288.2 million as of September 30, 2025 and has not generated positive cash flows from operations in most years. To date, the Company has funded its operations primarily with proceeds from the merger with Silverback in November 2022 (the “Merger”), the private placement of convertible preferred stock, the issuance of common stock, licensing, supply and distribution agreements, debt, and net product sales. The Company’s currently available cash, cash equivalents, and short-term investments as of September 30, 2025 are sufficient to meet its anticipated cash requirements for at least the 12 months following the date these financial statements are issued.

From August 5, 2015 (inception) through September 30, 2025, the Company has devoted substantially all of its efforts to developing intellectual property, conducting product development and clinical trials, organizing and staffing the Company, business planning, raising capital, building infrastructure, pre-commercial and commercial activities, and providing general and administrative support for these operations. The Company has a limited operating history, and the sales and income potential of the Company’s business and market are unproven. Management expects operating expenses to increase for the foreseeable future, and there can be no assurance that the Company will achieve profitability in the future, or if achieved, that it will be sustained on a continuing basis.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”), and Accounting Standards Update (“ASU”), of the Financial Accounting Standards Board (“FASB”). The Company’s financial statements are presented on a condensed consolidated basis, which include the accounts of ARS Pharmaceuticals, Inc., ARS Pharmaceuticals Operations, Inc. and ARS Pharmaceuticals IRL, Limited. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s functional and reporting currency is the U.S. dollar. Assets and liabilities that are not denominated in the functional currency are remeasured into U.S. dollars at foreign currency exchange rates in effect at the balance sheet date except for nonmonetary assets, which are remeasured at historical foreign currency exchange rates in effect at the date of transaction. Net realized and unrealized gains and losses from foreign currency transactions and remeasurement are reported in other income in the condensed consolidated statements of operations and comprehensive loss. All adjustments considered necessary for a fair presentation have been included.

Unaudited Interim Condensed Consolidated Financial Statements

The accompanying condensed consolidated balance sheet as of September 30, 2025, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2025 and 2024, the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2025 and 2024, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2025 and 2024, are unaudited. The balance sheet as of December 31, 2024 was derived from the audited financial statements as of and for the year ended December 31, 2024. The unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with the audited annual financial statements as of and for the year ended December 31, 2024, and, in the opinion of management, reflect all adjustments, consisting solely of normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of September 30, 2025, the condensed consolidated results of its operations for the three and nine months ended September 30, 2025 and 2024, and its cash flows for the nine months ended September 30, 2025 and 2024. The financial data and other information disclosed in these notes related to the three and nine months ended September 30, 2025 and 2024 are also unaudited. The condensed consolidated results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the full year ending December 31, 2025 or any other period.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s condensed consolidated financial statements and accompanying notes. The most significant estimates in the Company’s condensed consolidated financial statements are revenue recognized under collaboration agreements, accruals for variable components of product revenue, accruals for research and development expenses, and valuation of equity awards. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue and expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

Cash and Cash Equivalents

Cash and cash equivalents include cash readily available in checking, money market mutual funds, and short-term investments with remaining maturities when purchased of 90 days or less. The Company considers all highly liquid investments with remaining maturities when purchased of 90 days or less to be cash equivalents.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable includes trade accounts receivable from product sales to customers, partner receivables for reimbursable research and development costs, royalties, license fees, and milestone payments under the Company’s collaboration agreements, and partner receivables for supply of neffy under the Company’s supply agreements. Trade accounts receivables are recorded at wholesale acquisition cost (“WAC”), less purchase price discounts, prompt pay discounts, chargebacks, and an allowance for credit losses, if any. The allowance for credit losses is the Company’s estimate of losses over the life of the receivables. The Company determines the allowance for credit losses for accounts receivable based on each customer’s or partner’s accounts receivable balance and age, their financial condition, and the general economic environment.

When the collectability of an invoice is no longer probable, the Company will create a reserve for that specific receivable. If a receivable is determined to be uncollectible, it is charged against the general credit loss reserve or the reserve for the specific receivable, if one exists. The allowance for credit losses was not material at September 30, 2025, and no allowance for credit losses was deemed necessary at December 31, 2024.

Investments

The Company invests excess cash in investment grade fixed income securities. These investments are included in short-term investments on the condensed consolidated balance sheets, classified as available-for-sale, and reported at fair value with unrealized gains and losses included in accumulated other comprehensive (loss) gain, net. Realized gains and losses on the sale of securities are recognized in net loss.

Fair Value of Financial Instruments

Cash, cash equivalents, and short-term investments are carried at fair value. The carrying amounts of all accounts receivable, prepaid expenses and other current assets, and accounts payable and accrued liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and short-term investments. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits and limits its exposure to cash risk by placing its cash with high credit quality financial institutions.

The Company reviews its financial instruments portfolio on a quarterly basis to determine if any unrealized losses have resulted from a credit loss or other factors. As part of the review, management considers factors such as historical experience, market data, issuer-specific factors, and current economic conditions. This review is subjective, as it requires management to evaluate whether an event or change in circumstances has occurred in that period that may be related to credit issues.

The Company is also subject to credit risk related to its accounts receivable from product sales and revenue under collaboration and supply agreements. neffy is distributed primarily through wholesale distributors and pharmacies. These entities are not obligated to purchase any set number of units, and they distribute neffy on demand as orders are received. The Company enters into collaboration and supply agreements with pharmaceutical companies that have operations outside the U.S. under which the Company is entitled to receive payments for royalties, license fees, milestone achievements, reimbursable costs for research and development services, and supply of neffy. The Company extends credit to its customers and partners in the normal course of business after evaluating their overall financial condition.

Prior to August 2025, the Company operated under the Title Agreement (as defined in Note 3 – Revenue) with its Title Agent (as defined in Note 3 – Revenue), and the Title Agent retained all credit and collection risk on sales to the Company’s wholesale distributors and pharmacy customers. As of August 2025, the Company ceased operations under the Title Agreement and retains all credit and collection risk on sales.

The Company’s Title Agent accounted for 20% and 93% of the Company’s accounts receivable balance as of September 30, 2025 and December 31, 2024, respectively. Three additional customers accounted for 66% of accounts receivable as of September 30, 2025, with each individual customer ranging from 20% to 25%. For the three and nine months ended September 30, 2025, four customers accounted for 83% and 80% of the Company’s gross product sales, with each individual customer ranging from 14% to 25% and 13% to 24% of the Company’s gross product sales, respectively. For each of the three and nine months ended September 30, 2024, four customers accounted for 94% of the Company’s gross product sales, with each individual customer ranging from 11% to 29% of the Company’s gross product sales. For each of the three and nine months ended September 30, 2025 and 2024, one customer accounted for 100% of revenue under collaboration agreements. For the three and nine months ended September 30, 2025, two customers accounted for 100% and 98% of revenue under supply agreements, respectively, and there was no revenue under supply agreements for the three and nine months ended September 30, 2024. To date, the Company has not experienced any credit losses from its trade and partner accounts receivable.

Inventories

Inventories consist of finished goods held for sale and distribution, raw materials and work in process, and include labor and overhead. Inventories are stated at the lower of cost or net realizable value, and are determined on a first-in, first-out basis. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company periodically reviews its inventory to identify obsolete, slow-moving, or otherwise unsalable inventories, and establishes allowances for situations in which the cost of the inventory is not expected to be recovered. Such impairment charges, if any, are recorded in cost of goods sold on the condensed consolidated statements of operations.

The Company capitalizes inventory costs after regulatory approval, when future commercialization is considered probable, and a future economic benefit is expected to be realized. Prior to regulatory approval, the Company records inventory costs as research and development expenses. As such, when regulatory approval is received, this may result in zero-cost inventory which does not have a carrying value. This inventory is available to the Company to utilize for commercial operations as well as ongoing research and development activities.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally five years. Repair and maintenance costs are charged to expense as incurred.

Impairment of Long-Lived Assets

Long-lived assets consist primarily of property and equipment and intangible assets. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future undiscounted net cash flows which the asset or asset group are expected to generate, including its eventual residual value. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds its fair value. The Company has not recognized any impairment losses from inception through September 30, 2025.

Leases

The Company determines the initial classification and measurement of its right-of-use (“ROU”) asset and lease liabilities at the lease commencement date and thereafter, if modified. The Company recognizes a ROU asset for its operating leases with lease terms greater than 12 months. The lease term includes any renewal options and termination options that the Company is reasonably assured to exercise. The lease liability is calculated by using the present value of all lease payments, with the present value determined by using the incremental borrowing rate for operating leases determined by using the incremental borrowing rate of interest that the Company would pay to borrow on a collateralized basis an amount equal to the lease payments in a similar economic environment as well as a review of peer companies. Variable charges for common area maintenance and other variable costs are recognized as expense as incurred. Rent expense for operating leases is recognized on a straight-line basis over the reasonably assured lease term based on the total lease payments and is included in research and development and general and administrative expenses in the condensed consolidated statements of operations and comprehensive loss.

Intangible Assets

Intangible assets are measured at fair value as of the acquisition date or, in the case of commercial milestone payments, the date they become due. The evaluation of intangible assets includes assessing the amortization period for which the asset is expected to contribute to the future cash flows of the Company. Intangible assets with finite useful lives are amortized over their estimated useful lives, primarily on a straight-line basis when the Company is unable to reliably estimate the pattern of cash flow.

Revenue Recognition

The Company’s revenues consist of product sales of neffy and revenue derived from its collaboration, out-licensing, and supply agreements. See Note 3 – Revenue for more detail on product revenue, and Note 9 – Collaboration, Out-Licensing and Related Agreements for more detail on revenue from collaboration agreements, out-licensing agreements, and supply agreements.

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The provisions of ASC 606 require the following steps to determine revenue recognition: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. At contract inception, the Company assesses the goods or services promised within each contract, determines whether each promised good or service is distinct and identifies those that are performance obligations. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Cost of Goods Sold

Cost of goods sold primarily consists of direct and indirect costs related to the manufacture of neffy for 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, supply agreement fees, and royalties on product sales. Prior to the FDA approval of neffy in August 2024, costs incurred for the manufacture of neffy were recorded as research and development expenses, which resulted in zero-cost inventory. As a result, the cost of goods sold related to neffy initially reflects a lower average per unit cost of materials, as previously expensed zero-cost inventory is utilized for commercial production and sold to customers.

Research and Development Costs

Research and development costs are expensed in the period incurred. Research and development costs primarily consist of salaries and related expenses for personnel, stock-based compensation expense, external research and development costs incurred under agreements with contract research organizations, investigative sites and consultants to conduct clinical studies, costs related to compliance with regulatory requirements, costs related to manufacturing the Company’s product candidates (including neffy prior to FDA approval in August 2024) for clinical trials, and other allocated expenses.

Payments for research and development activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and payments made in advance of performance are reflected in the accompanying condensed consolidated balance sheets as prepaid expenses. The Company records accruals for estimated costs incurred for ongoing research and development activities. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the services, including the phase or completion of events, invoices received and contracted costs. The Company uses judgments and estimates to determine the prepaid or accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates.

Selling, General and Administrative Costs

Selling, general and administrative costs are expensed in the period incurred. Selling, general and administrative costs primarily consist of marketing-related expenses, salaries and related expenses for personnel, including meals and travel-related expenses incurred by the sales team, stock-based compensation, legal fees incurred relating to corporate and patent matters, professional fees incurred for accounting, auditing, tax, and other consulting services, and insurance costs.

Advertising

Costs for producing advertising are expensed when incurred. Costs for communicating advertising, such as search engine marketing, banner advertisements, social media advertisements, and print advertisements, are recorded as prepaid expenses and then expensed when the advertisement occurs. For the three and nine months ended September 30, 2025, advertising costs were $40.9 million and $72.8 million, respectively. For the three and nine months ended September 30, 2024, advertising costs were $3.9 million and $4.5 million, respectively.

Patent Costs

Costs related to filing and pursuing patent applications are recorded as general and administrative expenses in the statements of operations and expensed as incurred since recoverability of such expenditures is uncertain.

License Fees

Costs incurred to acquire technology licenses and milestone payments made on existing agreements are expensed or capitalized based upon the asset achieving technological feasibility in accordance with management’s assessment regarding the ultimate recoverability of the amounts paid and the potential for alternative future use.

Stock-Based Compensation

Stock-based compensation expense represents the cost of the grant date fair value of stock option grants recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis. The Company recognizes expense for awards subject to performance-based milestones over the remaining service period when management determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions at each reporting date. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and recognizes forfeitures as they occur. In the event that stock-based awards are granted in contemplation of or shortly before a planned release of material non-public information, and such information is expected to result in a material increase in the share price of the Company’s common stock, the Company may consider whether an adjustment to the observable market price is required when estimating the grant date fair value.

Comprehensive Loss

Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive loss typically consists of the change in unrealized gains and losses on available-for-sale securities.

Segment Reporting

Operating segments are components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker for purposes of making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business as one operating segment.

Net Loss Per Share

Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities. Diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since the effect of potentially dilutive securities is anti-dilutive given the net loss of the Company. For purposes of this calculation, stock options, warrants, and unvested restricted stock units, are considered to be common stock equivalents but are not included in the calculations of diluted net loss per share for the periods presented as their effect would be antidilutive.

The following securities are excluded from the calculation of weighted-average dilutive common shares because their inclusion would have been anti-dilutive:


	As of September 30,
	2025		2024
Warrants to purchase common stock		45,456		45,456
Common stock options granted and outstanding		17,106,592		15,178,403
Unvested restricted stock units		1,382		2,763
Estimated shares to be purchased under the employee stock purchase plan		43,255		9,222
Total		17,196,685		15,235,844

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280)–Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires issuers to make additional disclosures with respect to segment expenses, including required disclosure on an annual and interim basis for significant segment expenses and other segment items. ASU 2023-07 also permits the disclosure of more than one measure of a segment’s profit or loss. ASU 2023-07 was effective for the Company on January 1, 2024 for annual periods and on January 1, 2025 for interim periods. The adoption of ASU 2023-07 resulted in enhanced disclosures as included in Note 16 – Segment Information and did not impact the Company’s condensed consolidated financial statements.

Recently Issued Accounting Pronouncements — Not Yet Adopted

From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted as of the specified effective date. The Company believes the impact of recently issued standards, other than those noted below, and any issued but not yet effective standards will not have a material impact on our financial statements upon adoption.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740)–Improvements to Income Tax Disclosures (“ASU 2023-09”). The new standard requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid. The amendments in this update are effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company does not expect to early adopt the new standard. The new standard is expected to be applied prospectively, but retrospective application is permitted. The Company is currently evaluating the impact of ASU 2023-09 on the financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). The amendments in this update require disclosure, in the notes to the financial statements, of specific expense categories present within expense captions presented on the face of the income statement within continuing operations of public business entities. The amendments in this update are effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any and all prior periods presented in the financial statements. The impact of adoption of this ASU on the Company’s disclosures is currently being evaluated.

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). The amendments in this update introduces a practical expedient for the application of the current expected credit loss model to current accounts receivable and contract assets applicable to revenue contracts under ASC 606. This ASU is effective for annual periods beginning after December 15, 2025, and interim periods within those annual reporting periods. Early adoption is permitted. The amendments should be applied prospectively to financial statements issued for reporting periods after the effective date of this ASU. The impact of adoption of this ASU on the Company’s disclosures is currently being evaluated.

3. Revenue

The Company’s revenues consist primarily of product sales of neffy, revenue derived from its collaboration and out-licensing agreements, and revenue from its supply agreements. See Note 9 – Collaboration, Out-Licensing and Related Agreements for further discussion related to revenue from collaboration, out-licensing, and supply agreements.

Product Revenue

neffy was approved by the FDA in August 2024, and the Company began generating product revenue from sales of neffy in September 2024. The Company uses a third-party logistics provider (“3PL Agent”) to fulfill orders of neffy to the Company’s customers. The 3PL Agent provides services to the Company that include warehousing, distribution, order and accounts receivable management, and data management.

From September 2024 to July 2025, the Company operated under a title model agreement (“Title Agreement”) with an affiliate of the 3PL Agent (the “Title Agent”) so that the Title Agent could purchase and take title to neffy and then sell it to the Company’s wholesale distributors and pharmacy customers that had contracted to make a purchase. Under the Title Agreement, the economic substance of the transaction was such that the Company did not recognize revenue until neffy was sold and title had transferred from the Title Agent to the wholesale distributor or pharmacy.

As of August 2025, the Company ceased operations under the Title Agreement, and the Company now sells and transfers title of neffy directly to its wholesale distributor and pharmacy customers. Revenue is recognized at a point-in-time upon delivery and the transfer of title.

The Company also enters into sales agreements with pharmacies to hold neffy under consignment. Under the consignment model, the Company recognizes revenue when neffy is sold to a patient, at which point title transfers from the Company directly to the patient. These agreements were not subject to the Title Agreement.

Product revenue is recorded with each sale at the transaction price, net of reserves for variable components, including but not limited to distribution service fees, prompt pay discounts, product returns, chargebacks, rebates, and co-payment assistance, which are collectively referred to as “Gross-to-Net Adjustments.” Estimates for Gross-to-Net Adjustments are reassessed each reporting period, and adjustments are recorded on a cumulative catch-up basis, which would affect product revenue and net loss in the period of adjustment. Trade accounts receivable due to the Company from contracts with its customers are stated in the condensed consolidated balance sheets net of various allowances as described in the Accounts Receivable and Allowance for Credit Losses policy in Note 2 – Summary of Significant Accounting Policies.

The Company utilizes the expected value method when estimating the amount of variable consideration to include in the transaction price with respect to each of the foregoing variable components. Variable consideration is included in the transaction price only to the extent it is probable that a significant revenue reversal will not occur when the uncertainty associated with the variable consideration is resolved.

In accordance with ASC 606, the Company must make significant judgments to determine the estimate for certain Gross-to-Net Adjustments. The specific considerations that the Company uses in estimating the amounts related to Gross-to-Net Adjustments are as follows:

Distribution Service Fees. The Company pays distribution service fees to its wholesale distributors. These fees are a contractually fixed percentage of WAC and are calculated at the time of sale based on the purchased amount. These fees are recorded as other current liabilities on the condensed consolidated balance sheets.

Commercial Pharmacy Discounts. The Company provides discounts to its pharmacy customers. These discounts are a contractually fixed percentage of WAC and are a direct reduction from the WAC price they are charged. They are calculated at the time of sale based on the purchased amount. These discounts are recorded as contra trade accounts receivable on the condensed consolidated balance sheets.

Prompt Pay Discounts. The Company incentivizes on time invoice payments through prompt pay discounts. Prompt pay discounts are typically taken by customers, so an estimate of the discount is recorded at the time of sale based on the purchased amount. Prompt pay discount estimates are recorded as contra trade accounts receivable on the condensed consolidated balance sheets.

Chargebacks. Certain government entities and covered entities (e.g. Veterans Administration, 340B covered entities) can purchase the product at a price discounted below WAC. The difference between the government or covered entity purchase price and WAC will be charged back to the Company. The Company estimates the amount of chargebacks based on the expected number of claims and the related costs associated with the revenue recognized for product that remains in the distribution channel and any chargeback amounts not invoiced to the Company at the end of each reporting period. Estimated chargebacks are recorded as contra trade accounts receivable on the condensed consolidated balance sheets.

Rebates. The Company provides commercial rebates to pharmacy benefit managers and managed care organizations and is subject to mandatory discount obligations under the Medicare, Medicaid, and Tricare programs. The rebate amounts for these programs are determined by contractual arrangements or statutory requirements. Rebates are owed after the product has been dispensed to a patient and the Company has been invoiced. The Company estimates the amount in rebates based on the expected number of claims and the related costs associated with the revenue recognized for product that remains in the distribution channel and any rebate amounts not invoiced to the Company at the end of each reporting period. Rebate estimates are recorded as other current liabilities on the condensed consolidated balance sheets.

Co-payment Program. The Company offers co-payment assistance programs to commercially insured patients whose insurance requires a co-payment to be made when filling their prescription. The Company estimates the amount of co-payment assistance based on the expected volume and the average buy down rate associated with the revenue recognized for products that remain in the distribution channel and any co-payment assistance amounts not invoiced to the Company at the end of each reporting period. Co-payment programs estimates are recorded as other current liabilities on the condensed consolidated balance sheets.

Product Returns. Customers have the right to return damaged product, product that is within six months or less of the labeled expiration date, or product that is past the expiration date by no more than twelve months. neffy was commercially launched in September 2024 and due to the limited returns data, the Company uses professional judgment and industry data to estimate returns. As time passes and additional historical sales and returns data becomes available, the Company will update the estimated returns as needed. A reserve for potential product returns is recorded as other current liabilities on the condensed consolidated balance sheets.

4. Inventories

The Company began to capitalize the inventory costs associated with neffy upon FDA approval in August 2024 when future commercialization was considered probable, and it was determined that the inventory had a probable future economic benefit. These inventory costs consist primarily of purchased materials, third-party manufacturing costs, and packaging and serialization services. Noncurrent inventory consists of inventory anticipated to remain on hand for more than one year from the balance sheet date.

Capitalized inventories consisted of the following (in thousands):


	September 30, 2025			December 31, 2024
Raw materials	$	17,943		$	4,674
Work in process		89			19
Finished goods		5,555			5,826
Inventory reserve		(2,160	)		—
Total inventories, net	$	21,427		$	10,519
Reported as:
Inventories	$	7,782		$	5,212
Long-term inventories		13,645			5,307
Total inventories, net	$	21,427		$	10,519

Prior to FDA approval in August 2024, costs incurred for the manufacturing of neffy were recorded as research and development expenses, which upon approval resulted in zero-cost inventory. The Company held $8.4 million and $11.7 million in zero-cost inventory as of September 30, 2025 and December 31, 2024, respectively, none of which was determined to be obsolete as of each period end. The Company expects to fully utilize its zero-cost inventory in future periods.

5. Fair Value Measurements

The Company categorizes its assets and liabilities measured at fair value in accordance with the authoritative accounting guidance that establishes a consistent framework for measuring fair value and expands disclosures for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:


Level 1	–	Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2	–	Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and
Level 3	–	Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

The following table identifies the Company’s assets that were measured at fair value on a recurring basis (in thousands):


					Gross		Gross			Estimated
			Amortized		Unrealized		Unrealized			Fair
	Level		Cost		Gains		Losses			Value
September 30, 2025
Cash and cash equivalents - Money market mutual funds		1	$	59,288	$	—	$	—		$	59,288
Cash and cash equivalents - U.S. Treasury securities		2		19,871		—		(2	)		19,869
Short-term investments - U.S. Treasury securities		2		228,657		62		(67	)		228,652
Total			$	307,816	$	62	$	(69	)	$	307,809
December 31, 2024
Cash and cash equivalents - Money market mutual funds		1	$	6,506	$	—	$	—		$	6,506
Cash and cash equivalents - U.S. Treasury securities		2		42,382		5		—			42,387
Short-term investments - U.S. Treasury securities		2		262,990		223		(8	)		263,205
Total			$	311,878	$	228	$	(8	)	$	312,098

There were no transfers between the Level 1 and Level 2 categories or into or out of the Level 3 category during the periods presented. During the three and nine months ended September 30, 2025, the Company purchased $127.4 million and $193.1 million in short-term investments, respectively, and there were $88.5 million and $232.0 million in maturities of short-term investments, respectively. During the three and nine months ended September 30, 2024, the Company purchased $41.5 million and $192.6 million in short-term investments, respectively, and there were $61.0 million and $191.0 million in maturities of short-term investments, respectively.

The Company’s short-term investments portfolio contains investments in U.S. Treasury securities that have an effective maturity date that is less than one year from the respective balance sheet date. The Company's money market mutual fund holdings are highly liquid and invest primarily in cash and U.S. Treasury securities.

There was less than $0.1 million net unrealized gains and $0.2 million net unrealized losses on available-for-sale securities for the three and nine months ended September 30, 2025, respectively, and a $0.5 million and $0.3 million unrealized gain on available-for-sale securities for the three and nine months ended September 30, 2024, respectively. Management determined that the gross unrealized losses on the Company’s available-for-sale securities as of September 30, 2025 were primarily attributable to current economic and market conditions and not credit risk. As of September 30, 2025 and December 31, 2024, no allowance for credit losses was recorded for available-for-sale securities. It is neither management’s intention to sell nor is it more likely than not that the Company will be required to sell any investments prior to recovery of its amortized cost basis, which is expected to be at maturity.

Accrued interest receivable on the Company's available-for-sale securities was $1.2 million and $1.0 million at September 30, 2025 and December 31, 2024, respectively, and is included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets.

The Company’s Term Loans (as defined in Note 8 – Term Loans) are carried at historical cost, adjusted for the debt discount and debt issuance costs, and are not required to be carried at fair value. As of September 30, 2025, the Term Loans’ carrying value of $96.2 million approximates its estimated fair value.

As of September 30, 2025 and December 31, 2024, the Company did not have any liabilities that were measured at fair value on a recurring basis.

6. Balance Sheet Details

Prepaid expenses and other current assets consisted of the following (in thousands):


	September 30, 2025		December 31, 2024
Prepaid marketing	$	1,867	$	3,169
Prepaid expense		1,278		237
Interest receivable		1,243		987
Prepaid insurance		685		1,261
Other		1,348		1,232
Total	$	6,421	$	6,886

Other long-term assets consisted of the following (in thousands):


	September 30, 2025		December 31, 2024
Prepaid supply agreement fee	$	2,793	$	2,800
Capitalized software implementation costs		125		314
Total	$	2,918	$	3,114

Accounts payable and accrued liabilities consisted of the following (in thousands):


	September 30, 2025		December 31, 2024
Accounts payable	$	8,382	$	9,870
Accrued gross-to-net adjustments		15,560		2,179
Accrued marketing related expenses		11,271		1,855
Accrued compensation		5,448		2,293
Accrued cost of goods sold		4,343		617
Accrued general and administrative expenses		3,083		570
Accrued inventory		—		4,255
Other		1,681		1,202
Total	$	49,768	$	22,841

7. Intangible Assets

As described in Note 11 – In-Licensing and Supply, under the Aegis Agreement the Company capitalized milestone payments of $2.5 million, $5.0 million, and $2.0 million in August 2024, September 2024, and September 2025, respectively. As described in Note 9 – Collaboration, Out-Licensing and Related Agreements, under the Recordati Termination Agreement the Company capitalized the achievement of a €5.0 million ($5.9 million in U.S. dollars) milestone in June 2025. Each capitalized milestone payment is amortized on a straight-line basis over the estimated life of the intellectual property.

Intangible assets, net, all of which are finite-lived, consisted of the following (in thousands):


	September 30, 2025			December 31, 2024
Capitalized milestone payments	$	15,360		$	7,500
Less accumulated depreciation		(631	)		(129	)
Total	$	14,729		$	7,371

The amortization expense for the three and nine months ended September 30, 2025 was $0.2 million and $0.5 million, respectively. No intangible assets were held as of September 30, 2024, and there was no amortization expense recognized for the three and nine months ended September 30, 2024.

The weighted-average amortization period of intangible assets is 13.9 years. As of September 30, 2025, estimated future amortization expense for capitalized intangible assets for the next five years is as follows (in thousands):


Year Ended December 31,	Amount
2025 (remaining three months)	$	239
2026		1,105
2027		1,105
2028		1,105
2029		1,105
Total	$	4,659

8. Term Loans

On September 29, 2025 (the “Closing Date”), the Company and certain direct and indirect subsidiaries of the Company who may become a party thereto from time to time, as guarantors (the “Guarantors”), and ARS Pharmaceuticals Operations, Inc., as the borrower (the “Borrower” and, collectively with the Guarantors, the “Credit Parties”), entered into a credit agreement (the “Credit Agreement”) with RA Capital Agency Services, LLC (as the “Administrative Agent” and as the “Collateral Agent”), and affiliates of OMERS Administration Corporation and RA Capital Management, L.P., as lenders, and such other lenders who may become a party thereto from time to time (the “Lenders”), providing for an aggregate principal amount of up to $250.0 million of term loans from the Lenders to the Borrower (the “Term Loans”). The Term Loans will mature on September 29, 2030.

Pursuant to the terms of the Credit Agreement, the Term Loans may be advanced in four tranches. The first tranche (the “Term A Loan”) was advanced in the principal amount of $100.0 million on the Closing Date. The second tranche (the “Term B Loan”) in a principal amount of $25.0 million may be advanced at the Borrower’s election during the period commencing on the six-month anniversary of the Closing Date and ending no later than the one-year anniversary of the Closing Date, subject to customary conditions. The third tranche (the “Term C Loan” and collectively with the Term B Loan, the “Delayed Draw Term Loans”) in a principal amount of $25.0 million may be advanced at the Borrower’s election during the period commencing on and including the Closing Date and ending no later than the two-year anniversary of the Closing Date, subject to the Company achieving trailing 12-month (“TTM”) net revenues for neffy of at least $100.0 million and customary conditions. The fourth tranche (the “Term D Loan”) of up to $100.0 million is uncommitted and may be advanced at the Borrower’s election, subject to the consent of all of the Term D Lenders and customary conditions.

The Company received $100.0 million in gross cash proceeds from Term A Loan on the Closing Date, less the upfront fees taken in the form of an original issue discount and third-party fees totaling $3.8 million. The debt discount and the debt issuance costs are recorded net of the Term A Loan balance and are amortized to interest expense over the term of the debt using the effective interest rate method.

The Term Loans will initially bear interest at a per annum rate of 5.50% plus the greater of (i) the three-month forward-looking term SOFR or (ii) 3.00%, which interest rate may be reduced by 25 to 50 basis points based on achieving certain TTM net revenue milestones. The Credit Agreement provides for interest-only payments on a quarterly basis until maturity. At Borrower’s election and subject to certain conditions, 100% of accrued interest in the first two years, and 50% of accrued interest in the last three years, may be paid-in-kind, in which case the applicable interest rate for the Term Loans shall increase by 1.00% per annum for the portion of such Term Loans that is paid-in-kind. At the Closing Date and September 30, 2025, the contractual interest rate was 9.49% per annum. The Borrower may prepay the Term Loans, in whole or in part, subject to a prepayment premium and an exit fee.

The obligations of the Borrower under the Credit Agreement are guaranteed on a full and unconditional basis by the Company and the Guarantors and are secured by substantially all of the respective Credit Parties’ tangible and intangible assets and property, including intellectual property, subject to certain exceptions.

The Credit Agreement contains customary representations and warranties, covenants and events of default, including a requirement for the Borrower to maintain at all times, a minimum specified amount of unrestricted cash in deposit accounts. The Credit Agreement also includes customary events of default, including, among others, payment defaults, material misrepresentations, breaches of covenants following any applicable cure period, cross defaults with certain other indebtedness or material agreements, bankruptcy and insolvency events, judgment defaults, the occurrence of certain events that could reasonably be expected to have a “material adverse effect,” and the occurrence of a change in control (as defined in the Credit Agreement). The occurrence of an event of default could result in the acceleration of the Company’s obligations under the Credit Agreement and the exercise by the Administrative Agent of other rights and remedies provided for under the Credit Agreement. As of September 30, 2025, the Company was in compliance with all covenants under the Credit Agreement.

The Administrative Agent and Collateral Agent, as well as a Lender, are affiliates of RA Capital Management, L.P. (“RA Capital”). Affiliates of RA Capital collectively hold in excess of 10% of the Company’s outstanding common stock and are currently the Company’s largest stockholder. One of the Company’s board members is a controlling person of RA Capital’s general partner. The Lender affiliated with RA Capital holds a portion of Term Loans in the principal amount of $5.0 million.

The following table summarizes the composition of the Term Loans as reflected on the condensed consolidated balance sheet (in thousands):


	September 30, 2025
Gross proceeds	$	100,000
Unamortized debt discount and debt issuance costs		(3,771	)
Total	$	96,229

9. Collaboration, Out-Licensing and Related Agreements

The Company has entered into collaboration and licensing agreements, including supply and distribution, to license certain rights to neffy to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, upfront license fees; clinical, regulatory, and/or commercial milestone payments; payment for clinical and commercial supply; and royalties or a transfer price on the net sales of licensed products.

Licenses of Intellectual Property. If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, revenue is recognized from non-refundable, upfront payments allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. If the license is subject to repurchase by the Company, at its option, control of the license is not considered transferred to the customer, and in such case, the Company would account for the proceeds allocated to such license as either a financing obligation or a lease in accordance with ASC 606. Future amounts received related to the license which is subject to the Company’s repurchase, such as royalties or milestone payments, would be accounted for as additional financing proceeds and would increase the financing obligation on the Company’s condensed consolidated balance sheet. The Company would record such financing obligation as revenue when the right to repurchase has lapsed or was exercised.

If the license is not a distinct performance obligation, the Company evaluates the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Milestone Payments. At the inception of each arrangement that includes clinical, regulatory or commercial milestone payments, the Company evaluates whether achieving the milestones is considered probable and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone is included in the transaction price. Milestone payments that are not within the Company’s control, such as approvals from regulators or where attainment of the specified event is dependent on the development activities of a third party, are not considered probable of being achieved until those approvals are received or the specified event occurs. Revenue is recognized when the underlying performance obligation has been met.

Transaction Price Allocation. At the inception of each arrangement, the Company identifies its distinct performance obligations and allocates the transaction price to the performance obligations based upon their relative standalone selling prices. Standalone selling price is the price at which an entity would sell a promised good or service separately to a customer. The best evidence of standalone selling price is an observable price of a good or service when sold separately by an entity in similar circumstances to similar customers. Since the Company typically does not have such evidence, the Company estimates standalone selling price so that the amount that is allocated to each performance obligation equals the amount that the Company expects to receive for transferring the promised goods or services. The methods that the Company uses to make such estimates include (1) the adjusted market assessment approach, under which the Company forecasts product sales in the appropriate market, considers probability of commercialization success, and estimates discount rates; and (2) the expected cost of satisfying the performance obligations inclusive of a reasonable margin, also known as the expected cost plus margin approach.

Research and Development Revenues. For arrangements that contain research and development commitments, any arrangement consideration allocated to the research and development work is recognized as the underlying services are performed over the research and development term, if the criteria for over time recognition are met. If the over time recognition criteria are not met, research and development performance obligations are recognized at a point-in-time, when the research and development work is completed.

Clinical and Commercial Supply. Arrangements that include a promise for the future supply of drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered customer options. The Company assesses if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. Revenue from product sales to the Company’s collaboration partners is recognized at the point-in-time that the collaboration partner obtains control, which is typically based upon the terms of delivery of the product.

Royalty/Transfer Price Revenues. For arrangements that include sales-based royalties or transfer price, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Alfresa Agreement

In March 2020, the Company signed a Letter of Intent (“LOI”) with Alfresa Pharma Corporation (“Alfresa”) for the right to negotiate a definitive agreement for the exclusive license and sublicensable right to develop, register, import, manufacture and commercialize neffy in Japan and received an upfront payment of $2.0 million. In April 2020, the Company entered into a Collaboration and License Agreement (the “Alfresa Agreement”) for the rights pursuant to the LOI. Under the Alfresa Agreement, the Company delivered a license to neffy technology, completed a required clinical study, and remains obligated to use commercially reasonable efforts to develop and commercialize neffy in Japan. The parties agreed to share the cost of any additional clinical studies required for approval of neffy in Japan. Alfresa is solely responsible for regulatory and commercialization activities and may elect to assume responsibility for manufacturing and supplying drug product for commercial use in Japan. Either party may terminate the agreement for certain breaches of the agreement. Unless terminated earlier by either or both parties, the term of the agreement will continue until the later of (i) expiration of the last-to-expire patent in Japan; or (ii) 10 years after the first commercial sale of neffy in Japan.

In addition to the $2.0 million received under the LOI, the Company was initially eligible to receive up to $13.0 million in milestone payments upon achievement of certain clinical and regulatory milestones. Further, the Company is eligible to receive a negotiable transfer price expected to be in the low double-digit percentage on net sales subject to the regulatory approval to commercialize neffy in Japan.

At the commencement of the Alfresa Agreement, the Company identified the following performance obligations: the license for neffy and research and development services, both of which have been completed. The Company determined the initial transaction price to be $7.0 million, which includes a clinical milestone as it was deemed not probable of significant reversal at the inception of the agreement. Due to the uncertainty in the achievement of the regulatory and commercial milestones, the variable consideration associated with these future milestone payments has been fully constrained and is excluded from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. These estimates will be reassessed at each reporting period. The transaction price was allocated to the performance obligations based on the estimated stand-alone selling price of each performance obligation.

In July 2020 and November 2024, the Company earned milestone payments of $5.0 million and $6.0 million for the completion of clinical and regulatory milestones in Japan, respectively, which were recognized as revenue under collaboration agreements.

Recordati Agreement

In September 2020, the Company entered into a License and Supply Agreement (the “Recordati Agreement”) with Recordati Ireland, Ltd. (“Recordati”) for the exclusive license and sublicensable right to develop, import, manufacture or have manufactured commercial product, file and hold regulatory approvals and commercialize neffy in Europe and certain European Free Trade Association, Russia/the Commonwealth of Independent States, Middle East and African countries (the “Recordati Territory”). Under the Recordati Agreement, the Company received an upfront payment of $11.8 million and a regulatory milestone payment of $6.0 million in 2020.

In February 2023, the Company and Recordati entered into a termination agreement (the “Recordati Termination Agreement”), pursuant to which, among other things, the Company and Recordati agreed to terminate the Recordati Agreement. Pursuant to the Recordati Termination Agreement, the Company reacquired all of the Recordati Rights, paid Recordati a one-time upfront payment of €3.0 million ($3.3 million in U.S. dollars), and agreed to pay additional payments upon achievement of certain milestones including: (i) an EMA regulatory milestone payment of €2.0 million, (ii) a milestone payment of €5.0 million upon first commercial sale of neffy in the Recordati Territory, and (iii) royalty payments of up to €5.0 million in the aggregate from sales of neffy in the Recordati Territory (collectively, the “Recordati Rights”).

The Company determined that the Recordati Rights at the time of entering into the Recordati Termination Agreement had no alternative future use and therefore recorded the €3.0 million upfront payment to Recordati as an in-process research and development (“IPR&D”) expense presented within research and development expense. The Recordati Termination Agreement ended the Company’s performance obligations pursuant to the Recordati Agreement and consequently the existing contract liability of $3.1 million previously received from Recordati was recorded against IPR&D expense presented within research and development expense in the condensed consolidated statements of operations and comprehensive loss. Accordingly, no revenue has been recognized subsequent to the Recordati Termination Agreement.

In June 2024, the EMA regulatory milestone was met and a €2.0 million ($2.1 million in U.S. dollars) expense was recorded in research and development expense in the accompanying condensed consolidated statements of operations and comprehensive loss. In June 2025, the first commercial sale milestone was met for the first commercial sale of neffy in the Recordati Territory. As a result, the Company capitalized the €5.0 million ($5.9 million in U.S. dollars) milestone for the first commercial sale of neffy in the Recordati Territory to intangible assets in the accompanying condensed consolidated balance sheets. The intangible assets will be amortized through cost of goods sold in the condensed consolidated statements of operations and comprehensive loss on a straight-line basis over the estimated life of the intellectual property of 13.5 years.

For the three and nine months ended September 30, 2025, the Company recognized $0.1 million and $0.2 million in royalty expense from the sale of neffy in the Recordati Territory, respectively, as cost of goods sold in the accompanying condensed consolidated statements of operations and comprehensive loss.

Pediatrix Agreement

In March 2021, the Company entered into a Collaboration and Distribution Agreement (the “Pediatrix Agreement”) with Pediatrix Therapeutics, Inc. (“Pediatrix”) for the exclusive license and sublicensable right to develop, import, manufacture or have manufactured commercial product, file and hold regulatory approvals and commercialize neffy in the People’s Republic of China, Taiwan, Macau, and Hong Kong (the “Pediatrix Territory”). Under the Pediatrix Agreement, Pediatrix is responsible, at its sole cost and expense, for all ongoing development work that is necessary for or otherwise supports regulatory approval in the Pediatrix Territory, including all clinical trials, and activities related to post-approval commitments and commercialization tests. In addition, Pediatrix is responsible for commercialization activities and may elect to assume responsibility for manufacturing and supplying drug product for commercial use. The Company is responsible for the manufacturing of product for clinical studies as well as commercial supply, all at a negotiated transfer price. Either party may terminate the Pediatrix Agreement for certain breaches of the agreement. Unless terminated earlier by either or both parties, the term of the agreement will continue until the later of (i) expiration of the last-to-expire patent in the Pediatrix Territory, (ii) the expiration of all regulatory exclusivities that cover neffy in the Pediatrix Territory, or (iii) 10 years after the first commercial sale of neffy in the Pediatrix Territory.

Under the terms of the Pediatrix Agreement, the Company received an upfront payment of $3.0 million. In addition, the Company is eligible to receive up to $84.0 million in milestone payments upon achievement of certain regulatory and commercial sales milestones. The next eligible milestone is a $4.0 million regulatory milestone. Subject to regulatory approval, the Company will earn tiered royalties in the low double-digits on annual net sales in the region and will receive a per unit supply price for the sale of commercial supply to Pediatrix.

At the commencement of this collaboration, the Company identified performance obligations related to the delivery of the license for neffy in the Pediatrix Territory and manufacturing of product for clinical studies and commercial supply. The Company concluded that the license was distinct from potential supply obligation. The supply provisions are effectively options granted to Pediatrix to purchase future goods and did not contain a material right. The Company determined the initial transaction price to be the $3.0 million upfront payment. Due to the uncertainty in the achievement of all the developmental and commercial milestones, the variable consideration associated with these future milestone payments has been fully constrained and is excluded from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. These estimates will be reassessed at each reporting period. The Company recognized revenue of the full $3.0 million during the year ended December 31, 2021.

Seqirus Agreement

In March 2024, the Company entered into a License and Distribution Agreement (the “Seqirus Agreement”) with Seqirus Pty, Ltd. (“Seqirus”) for the exclusive license to commercialize neffy in Australia and New Zealand (the “Seqirus Territory”). Under the Seqirus Agreement, the Company is responsible for the transfer of know-how, which includes regulatory materials, regulatory data, and commercialization data, and also for the manufacturing of product for commercial supply which is available to Seqirus at a negotiated price. Seqirus is solely responsible for all regulatory and commercialization activities in the Seqirus Territory. Either party may terminate the Seqirus Agreement for certain breaches. Unless terminated earlier by either or both parties, the initial term of the Seqirus Agreement is 15 years from the first commercial sale of neffy in the Seqirus Territory. The Seqirus Agreement will automatically renew for two-year periods unless either party gives a notice to terminate at least 12 months prior to the end of the initial or any renewal term.

Under the terms of the Seqirus Agreement, the Company received an upfront payment of $0.5 million in May 2024. In addition, the Company was eligible to receive up to $4.5 million in milestone payments upon achievement of certain event milestones. Subject to regulatory approval in Australia and New Zealand, the Company will also receive a per unit supply price for the sale of commercial supply to Seqirus.

At the commencement of this collaboration, the Company identified one performance obligation which is the delivery of the license for neffy in the Seqirus Territory in combination with the transfer of know-how. The Company determined that the option to purchase the commercial supply does not represent a material right. The Company determined the initial transaction price to be the $0.5 million upfront payment. Due to the uncertainty in the achievement of all the regulatory milestones, the variable consideration associated with these future milestone payments has been fully constrained and is excluded from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. The variable consideration will be reassessed at each reporting period. In May and August 2024, the Company delivered the license for neffy in the Seqirus Territory in combination with the transfer of know-how and achieved the first milestone event, respectively, and the Company received payments of $0.5 million and $1.5 million, respectively, which were recognized as revenue under collaboration agreements.

ALK Collaboration Agreement

In November 2024, the Company entered into a Collaboration, License and Distribution Agreement (the “ALK Collaboration Agreement”) with ALK-Abelló A/S (“ALK”). Pursuant to the ALK Collaboration Agreement, the Company granted to ALK a worldwide (other than the United States, Japan, mainland China, Hong Kong, Taiwan, Macau, Australia and New Zealand) (“ALK Territory”), exclusive license under certain of the Company’s patents and know-how to develop, manufacture and commercialize products containing epinephrine administered intranasally, including EURneffy (the trade name for neffy in the European Union) (epinephrine nasal spray) (“Products”), for all human uses, including the immediate or emergency treatment of allergic reactions (including Type I) and anaphylaxis and urticaria, and other future indications as agreed by the parties. If the Company develops any new intranasally administered product that contains epinephrine and files a new drug application in the United States for such product (“New Product”), upon ALK’s request such New Product will be included as a Product under the ALK Collaboration Agreement, subject to ALK bearing the costs of development of such New Product for its licensed territory.

Under the ALK Collaboration Agreement, the Company is obligated to transfer to ALK the existing marketing authorizations for the Products in the ALK Territory. The Company is 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.

Under the ALK Collaboration Agreement, ALK made a $145.0 million upfront payment to the Company in November 2024, and the Company earned $5.0 million for the first commercial sale of EURneffy in the ALK Territory in June 2025. The Company is eligible to receive additional outstanding regulatory 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 the Company obtaining regulatory approval for the Product in Canada by a specified time. The Company is 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.

The contract will expire upon the expiration of the last-to-expire royalty term for all Products in the ALK Territory, unless terminated earlier. Either the Company or ALK may terminate the ALK Collaboration Agreement in the case of the other party’s insolvency or in the event of an uncured material breach of the other party, except that the Company may not terminate the ALK Collaboration Agreement for ALK’s material breach of its commercial diligence obligations. ALK may terminate the ALK Collaboration Agreement for convenience upon 12 months’ prior written notice or for a safety or regulatory concern. The Company may terminate the ALK Collaboration Agreement in the event ALK makes certain challenges to certain of the Company’s patents. Prior to a change of control and outside of a set period of time after which the Company commences change of control negotiations, the Company may terminate the ALK Collaboration Agreement with respect to all countries in the European Economic Area (“EEA”) upon prior written notice to ALK and payment of a termination fee that is the higher of an agreed mid-nine digit amount and the fair market value of the Products business in the EEA at the time of such termination (the “Repurchase Option”). The Company may also terminate the ALK Collaboration Agreement if ALK commercializes a non-injectable epinephrine product or manufactures such a product in the United States.

In connection with the ALK Collaboration Agreement, the Company and ALK also entered into a commercial supply agreement (the “ALK Supply Agreement”) in November 2024, under which the Company will supply ALK’s requirements (and ALK will purchase from the Company its requirements) of Products for five years for a specified supply price, after which ALK may elect to transition to itself or its contract manufacturer the manufacture and supply of Products. The contract term for the ALK Supply Agreement is coterminous with the ALK Collaboration Agreement. Either the Company or ALK may terminate the ALK Supply Agreement in the event of an uncured material breach of the other party.

Accounting Assessment

The Company concluded that the ALK Collaboration Agreement and the ALK Supply Agreement qualify as a contract with a customer under ASC 606 as one combined arrangement. The Company identified the following performance obligations: (i) exclusive commercialization license in the European Economic Area (the “EEA License”); (ii) exclusive commercialization license in the rest of the ALK Territory (the “ROW License”) and; (iii) five separate development and regulatory services performance obligations. The Company also evaluated the (i) promise to add a New Product and new indications to the ALK Collaboration Agreement, and (ii) the promises under the ALK Supply Agreement, and concluded that these promises did not meet the definition of a performance obligation nor did these promises convey a material right to ALK.

The Company determined that the non-refundable upfront payment of $145.0 million is the estimated transaction price at contract inception. The outstanding regulatory milestone payments (totaling $15.0 million) were fully constrained at contract inception and as of September 30, 2025 as a result of the uncertainty of whether any of the milestones will be achieved. In making the assessment of the constraint utilizing the most likely amount method, the Company considered the stage of development, and the risks associated with the remaining development required to achieve the milestones, as well as whether the achievement of the milestone is outside the control of the Company or ALK. The Company determined that the commercial milestone ($5.0 million) and the sales-based milestones and royalties will be recognized on the later of when the related sales occur or when control of the associated license has been transferred, as the Company determined that such sales-based consideration relates predominantly to the licenses granted to ALK. The Company reevaluates the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur and will include regulatory milestones in the transaction price if it is probable that a significant revenue reversal will not occur in future periods.

At contract inception, the Company determined the estimated standalone selling prices for each performance obligation in order to allocate the transaction price among the performance obligations. The standalone selling price for the licenses was estimated using the adjusted market assessment approach. Under this method, the Company forecasted future cash flows expected in the ALK Territory, the probability of commercialization success, and a market discount rate. To estimate the standalone selling prices of the development and regulatory services, the Company forecasted its expected costs of satisfying each performance obligation inclusive of an appropriate margin for that service.

The Company allocated the total transaction price to each performance obligation on a relative standalone selling price basis and determined whether revenue should be recognized at a point in time or over time. The Company allocated $69.4 million to the EEA License performance obligation; $73.1 million to the ROW License performance obligation; and $2.6 million to the development and regulatory services performance obligations.

Revenue should be recognized when, or as, an entity satisfies a performance obligation by transferring a promised good or service to a customer, i.e., when the customer obtains control of the good or service. The licenses granted to ALK are being accounted for as distinct performance obligations. The licenses relate to functional intellectual property for which revenue is recognized at a point in time. In the case of the EEA License, the Company evaluated the impact of the Company’s Repurchase Option, and determined that, as a result of the Company’s ability to repurchase the license, control of the EEA License has not been transferred to ALK under ASC 606. The Company determined that the transaction price allocated to the EEA License should be accounted for as a financing liability, due to the repurchase price being greater than the original selling price of this performance obligation. Control of the EEA License will not be considered transferred to ALK until such time that the Repurchase Option lapses, which under the terms of the ALK Collaboration Agreement, will occur upon the expiration of the contract, or exercise by the Company of the Repurchase Option. In November 2024, the Company recognized the transaction price allocated to the EEA License of $69.4 million as a financing liability.

In the case of the ROW License, the point in time for recognition of revenue was shortly after the inception of the contract because the customer obtained control of the license and was able to use and benefit from its right to use the intellectual property at that point. In November 2024, the Company recognized $73.1 million in revenue for the transaction price allocated to the ROW License.

The development and regulatory services performance obligations under the ALK Collaboration Agreement each represent a separate performance obligation. The development and regulatory services, which are transferred to the customer over time, were provided to ALK from inception of the agreement and are expected to continue through 2028. Revenue related to the development and regulatory services performance obligations was initially recorded as contract liability and is being recognized as services are performed based on the costs incurred through the end of each reporting period, as a percentage of the estimated total costs to be incurred for these performance obligations. In November 2024, the Company recognized $0.5 million of revenue related to the development and regulatory services performance obligations. For the three and nine months ended September 30, 2025, the Company recognized less than $0.1 million and $0.3 million of revenue related to the development and regulatory services performance obligations, respectively, which is recorded as revenue under collaboration agreements in the accompanying condensed consolidated statement of operations and comprehensive loss. As of September 30, 2025, the accompanying condensed consolidated balance sheet includes a contract liability of $0.5 million classified as current and $1.3 million classified as noncurrent associated with these performance obligations and based on the expected period of performance for the development and regulatory services.

In June 2025, ALK completed the first commercial sale of EURneffy in the ALK Territory and earned the $5.0 million commercial milestone, of which $2.6 million was allocated to the ROW License and recognized as revenue under collaboration agreements for the three and six months ended June 30, 2025 in the condensed consolidated statements of operations and comprehensive loss. The remaining $2.4 million was allocated to the EEA license and recognized as an increase to the financing liability. Pursuant to the first commercial sale of EURneffy, the Company earned sales-based royalties for product sales in the EEA totaling $0.1 million and $0.2 million for the three and nine months ended September 30, 2025, respectively, which was allocated to the EEA license and recognized as an increase to the financing liability.

ALK Contract Liability

A reconciliation of the contract liability from the ALK Collaboration Agreement is as follows (in thousands):


Balance at December 31, 2024	$	2,089
Revenue recognized under the ALK Collaboration Agreement		(295	)
Balance at September 30, 2025	$	1,794

ALK Financing Liability

A reconciliation of the financing liability from the ALK Collaboration Agreement is as follows (in thousands):


Balance at December 31, 2024	$	69,383
Commercial milestone allocated to the EEA License		2,435
Sales-based royalties earned in the EEA		226
Balance at September 30, 2025	$	72,044

ALK Co-Promotion Agreement

In May 2025, the Company and ALK-Abelló, Inc. (“ALK U.S.”, an affiliate of ALK) entered into a co-promotion agreement, which was subsequently amended in October 2025 (the “ALK Co-Promotion Agreement”), to co-promote neffy to up to 9,000 specified pediatricians and other prescribers in the U.S. Accordingly, the Company granted ALK U.S. a non-exclusive, royalty-free license to use the neffy trademarks and copyrights and the ARS house marks in the U.S. solely in connection with promoting neffy pursuant to the terms of the ALK Co-Promotion Agreement.

Under the ALK Co-Promotion Agreement, ALK U.S. commenced its promotion activities in May 2025 and is obligated to 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.

The Company is the principal of all sales transactions of neffy in the U.S. and, subject to the terms of the ALK Co-Promotion Agreement, continues to have sole responsibility for all U.S. commercialization activities, including marketing, medical affairs, market access, production, distribution, pharmacovigilance, quality and safety.

The Company will pay ALK U.S. a base fee to compensate ALK U.S. for its promotion activities. Payments to ALK U.S. for the services performed during the first year of the arrangement will be deferred and paid in the second year of the arrangement. In addition to the base fee, ALK U.S. will be eligible to receive performance-based bonus payments from the Company starting in the second year of the arrangement equal to 30% of the portion of neffy net sales generated from the ALK U.S.-targeted prescribers in excess of a specified initial market share threshold in year two or a 50% market share threshold during years three and four of the arrangement.

The ALK Co-Promotion Agreement expires on the fourth anniversary of the commencement of promotion activities thereunder. Either party may terminate the ALK Co-Promotion Agreement in the event of an uncured material breach of the other party or for either party’s change of control. The Company may terminate the ALK Co-Promotion Agreement in the case of ALK U.S.’s insolvency, if ALK U.S. fails to meet specified ramp-up timelines, or if ALK U.S. markets, sells or commercializes any non-injection product containing epinephrine in the U.S. After the first six months, the Company may terminate the ALK Co-Promotion Agreement if minimum detail requirements are not met for a consecutive three-month period. After the first year, the Company may terminate the ALK Co-Promotion agreement for any reason or no reason for a fee (as described below). After the first year, ALK U.S. may terminate the ALK Co-Promotion Agreement for any reason or no reason, and the Company may terminate the agreement in the event ALK U.S. restructures its sales force.

Upon termination of the ALK Co-Promotion Agreement by the Company for convenience, so long as ALK U.S. has met specified performance thresholds during the term, the Company is obligated to pay ALK U.S. a specified mid-to-low double-digit percentage of the portion of neffy net sales generated from the ALK U.S.-targeted prescribers in excess of a specified mid-quartile market share threshold that increases over time up to 50% for a specified period after termination, which period decreases in duration the later that the termination occurs. Upon termination of the ALK Co-Promotion Agreement by the Company in connection with a change of control of the Company, the Company is obligated to pay ALK U.S. a one-time mid-seven digit to low eight-digit termination fee in an amount that increases the later that the termination occurs.

The Company evaluated the terms of the ALK Co-Promotion Agreement and determined that it is a vendor arrangement with ALK U.S. During the three and nine months ended September 30, 2025, the Company recognized $2.4 million and $3.8 million, respectively, in ALK-related selling, general, and administrative expense in the accompanying condensed consolidated statements of operations and comprehensive loss, and the corresponding liability was recorded in other accrued liabilities in the accompanying condensed consolidated balance sheet as of September 30, 2025.

10. Commitments and Contingencies

Leases

In October 2021, the Company entered into a 38-month noncancelable office space lease for its previous headquarters location in San Diego, California. Under the terms of the agreement, there is no option to extend the lease, and the Company was subject to additional charges for common area maintenance and other costs. Monthly rental payments due under the lease commenced on December 6, 2021 and escalated through the lease term. The Company prepaid the first month’s rent upon execution of the lease, and the lease agreement provided full rent abatement for the second and third months of the rental term. As there was not an implicit rate within the lease, the discount rate was determined by using a set of peer companies incremental borrowing rates.

In January 2025, the Company entered into a lease amendment to its headquarters location lease (the “Headquarters Amendment”), pursuant to which the Company relocated to a new office space located in the same building. In May 2025, the Company took possession of the new office space upon substantial completion of the landlord’s work. As of September 30, 2025, the remaining lease term of the new office space is 33 months. Monthly lease payments increased when the Company took possession of the new office space and will escalate through the lease term, resulting in an annualized payment of $0.6 million. The Company remains subject to additional charges for common area maintenance and other costs. The Company has one option to extend the lease for an additional term of three years, and the monthly payment amounts would be determined by the landlord at the then-prevailing rate.

Upon entering into the Headquarters Amendment, the Company remeasured the right-of-use asset and lease liability pertaining to its current headquarters, and as a result recorded an additional $0.1 million to both its right-of-use asset and lease liability on its condensed consolidated balance sheet. Upon possession of the new office space, the Company recognized a right-of-use asset and lease liability of $1.6 million on its condensed consolidated balance sheet. As there was not an implicit rate within the lease amendment, a discount rate of 8% was determined using a set of peer companies’ incremental borrowing rates.

The following table summarizes supplemental lease information (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Lease expense(1)	$	153	$	56	$	372	$	169
Cash paid for leases	$	141	$	62	$	267	$	184

______________

(1) Variable lease costs in each of the three and nine months ended September 30, 2025 and 2024 were immaterial.

As of September 30, 2025, future minimum non-cancelable operating lease payments are as follows (in thousands):


Year Ended December 31,	Amount
2025 (remaining three months)	$	300
2026		609
2027		627
2028		318
Total lease payments		1,854
Less imputed interest		(322	)
Lease liability		1,532
Less lease liability, current portion		583
Lease liability, net of current portion	$	949

Contingencies

From time to time, the Company may be involved in various legal proceedings and subject to claims that arise in the ordinary course of business.

On July 24, 2023, Aera A/S, an IP consultancy firm in Denmark representing an unidentified opponent, filed a notice of opposition with the European Patent Office (the “EPO”) in respect of EP 3678649 (the “EP ‘649 Patent”), which is a patent directed to a nasal spray formulation of epinephrine, and uses thereof. Oral proceedings took place on October 7, 2025, and the Opposition Division (the “OD”) of the EPO upheld the validity of all claims in the EP ‘649 Patent. The OD is expected to issue a written decision within one to two months, which may be appealed by filing a notice of appeal and grounds of appeal with the EPO’s Boards of Appeal, due within a non-extendable period of two months and four months respectively from the date of the written decision.

On March 25, 2025, AptarGroup, Inc. (“AptarGroup”) and Aptar France SAS (collectively, “Aptar”) filed a suit against ARS Pharmaceuticals, Inc. and ARS Pharmaceuticals Operations, Inc. in the United States District Court for the Southern District of New York. Aptar alleges the Company violated the Defend Trade Secrets Act (18 USC § 1836), misappropriated trade secrets under New York state law, and committed various breaches of contract. The complaint was served to the Company, and the Company filed a motion to dismiss on June 12, 2025. Aptar subsequently filed opposition to the motion to dismiss on July 28, 2025. The Company intends to vigorously defend itself in this matter. On September 29, 2025, the Company filed a lawsuit against AptarGroup in the U.S. District Court for the Southern District of California, alleging that AptarGroup violated federal antitrust law in connection with its sale of certain constituent parts of neffy.

On August 29, 2025, the Company filed a lawsuit against Lupin, Inc., Lupin Ltd., and Lupin Pharmaceuticals, Inc. (collectively, “Lupin”) in the United States District Court for the District of New Jersey, alleging infringement of U.S. Patent Nos.: 10,576,156, 10,682,414, 11,173,209, 11,191,838, 11,717,571, 11,744,895, 11,918,655, and 12,324,838 and seeking a permanent injunction preventing market entry of a generic product from Lupin prior to the expiry of such patents. The lawsuit follows a Paragraph IV certification notice letter received from Lupin on August 13, 2025, advising the Company that Lupin submitted an Abbreviated New Drug Application to the FDA seeking approval to manufacture and sell a generic version of the Company’s product neffy© 2 mg (epinephrine nasal spray) prior to the expiration of the patents referenced above.

Regardless of the outcome, involvement in legal proceedings may have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. The Company cannot predict the outcome of these suits, and failure by the Company to obtain favorable resolutions could have a material adverse effect on its business, results of operations, and financial condition. The Company’s chances of success on the merits of these suits are still uncertain and any possible loss or range of loss cannot be reasonably estimated and as such the Company has not recorded a liability as of September 30, 2025.

Except as described above, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or other body pending or, to the knowledge of the Company’s executive officers, threatened against or affecting the Company, the Company’s common stock, any of its subsidiaries or its subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Unconditional Purchase Obligations and Commitments

Unconditional purchase obligations and commitments are defined as agreements to purchase goods or services that are enforceable and legally binding (non-cancelable, or cancelable only in certain circumstances). In the normal course of business, the Company enters into arrangements with suppliers, manufacturers, and various other companies that supply goods or services. These arrangements can include unconditional purchase obligations and commitments.

The total amount of unconditional purchase obligations related to the supply of raw materials is $56.9 million as of September 30, 2025. 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. During the three and nine months ended September 30, 2025, the Company made $0.7 million and $8.0 million in payments under these agreements, respectively. During each of the three and nine months ended September 30, 2024, the Company made $0.2 million in payments under these agreements.

The total amount of commitments related to the ALK Co-Promotion Agreement is $26.8 million as of September 30, 2025. Payment obligations by year are as follows: 2025 ($0), 2026 ($4.4 million), 2027 ($14.2 million), 2028 ($4.6 million), and 2029 ($3.6 million). No payments were made under this agreement during the three and nine months ended September 30, 2025 and 2024.

The total commitment related to a corporate sponsorship agreement with Food Allergy Research and Education, Inc. is $7.0 million as of September 30, 2025. Payments by year are as follows: 2025 ($1.0 million), 2026 ($5.0 million) and 2027 ($1.0 million). During the three and nine months ended September 30, 2025, the Company made $3.0 million and $5.0 million in payments under this agreement, respectively. During each of the three and nine months ended September 30, 2024, the Company made $1.0 million in payments under these agreements.

The total amount of unconditional purchase obligations related to hosted software license subscription fees is $2.2 million as of September 30, 2025. Payments by year are as follows: 2025 ($0.3 million), 2026 ($1.5 million), and 2027 ($0.4 million). During the three and nine months ended September 30, 2025, the Company made $0.3 million and $1.1 million in payments under this agreement, respectively. During each of the three and nine months ended September 30, 2024, the Company made immaterial payments under these agreements.

The amounts above do not represent the entire anticipated spend in the future but represent only those items for which the Company is contractually obligated. For this reason, these amounts do not provide an indication of the Company’s expected future cash outflows related to purchases and commitments.

11. In-Licensing and Supply

License Agreement with Aegis

In June 2018, the Company entered into a License Agreement (the “Aegis Agreement”) with Aegis Therapeutics, LLC (“Aegis”), a wholly owned subsidiary of Neurelis, Inc. Under the Aegis Agreement, the Company licensed the exclusive, worldwide, royalty-bearing, sublicensable, rights to certain proprietary Aegis technology, patent rights and know-how to develop and commercialize epinephrine products. The Company utilizes this technology in its sole commercial product, neffy. As consideration for the license, the Company paid an upfront license fee of $50,000, which was recorded in research and development expenses in the condensed consolidated statement of operations.

The Company is required to make aggregate milestone payments of up to $20.0 million upon achievement of certain regulatory and commercial milestones. Milestone payments under the Aegis Agreement are recorded upon completion of the required events as the triggering events are not considered to be probable until they are achieved. Prior to the FDA approval of neffy in August 2024, regulatory milestone payments were recorded as research and development expenses in the condensed consolidated statement of operations. In 2019 and 2022, milestone payments of $0.5 million and $1.0 million were recognized upon the achievement of a regulatory milestone and the FDA’s acceptance of the Company’s new drug application submission for neffy, respectively.

Since the FDA approval of neffy in August 2024, regulatory and commercial milestone payments have been capitalized as intangible assets in the accompanying condensed consolidated balance sheets upon achievement. Amortization expense for capitalized milestone payments has been recognized as cost of goods sold in the accompanying condensed consolidated statements of operations and comprehensive loss on a straight-line basis over the estimated life of the intellectual property. In August and September 2024, milestone payments of $2.5 million and $5.0 million were recognized for achieving FDA approval of neffy and the first commercial sale of neffy, respectively, and were paid in September 2024 and October 2024, respectively. In September 2025, a milestone payment of $2.0 million milestone was recognized for achieving certain annual net product sales of neffy, and the corresponding liability was recorded in accounts payable and accrued liabilities. The next milestone payment of $9.0 million is due upon the achievement of certain annual net product sales.

The Company also pays royalties based on a mid-single-digit percentage of net product sales on its or its sublicensees’ net sales of the Licensed Products (as defined in the Aegis Agreement) on a product-by-product basis. Royalties are recorded to cost of goods sold in the period the related product revenue is recognized.

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 of neffy. The Company will make all future payments under the Aegis Agreement to an affiliate of OrbiMed. As described in Note 15 – Related Party Transactions, a member of the Company’s Board of Directors is a General Partner at OrbiMed.

The Company is responsible for reimbursing Aegis for patent costs incurred in connection with prosecuting and maintaining patent rights that are specific to epinephrine or epinephrine products. No expenses were recognized in connection with legal patent fees for each of the three and nine months ended September 30, 2025 and 2024.

The Company may terminate the Aegis Agreement with 30 days written notice or either party may terminate the Aegis Agreement for certain breaches of the Aegis Agreement. Unless terminated earlier by either or both parties, the term of the Aegis Agreement will continue until the final expiration of all royalty obligations under the Aegis Agreement.

In conjunction with the Aegis Agreement, the Company also entered into a supply agreement (the “Aegis Supply Agreement”) with Aegis that allows the Company to purchase materials for preclinical, development and commercial use at predetermined prices. The Company may elect to have Aegis supply minimum quantities but there are no minimum or maximum purchase obligations under the Aegis Supply Agreement unless this election is made. The parties may terminate the Aegis Supply Agreement at any time by mutual agreement. In addition, the parties may terminate the Aegis Supply Agreement in the event of certain breaches of the Aegis Supply Agreement or upon the earlier of the expiration or termination of the Aegis Agreement or June 2028. The Aegis Supply Agreement term may be extended by mutual written agreement. Under the Aegis Supply Agreement, the Company made $0.3 million in payments in each of the three and nine months ended September 30, 2025, and the Company made no payments and $0.2 million in payments during the three and nine months ended September 30, 2024, respectively.

Manufacturing Agreement with Renaissance

In September 2020, the Company entered into a manufacturing agreement with Renaissance Lakewood, LLC (“Renaissance”), which was subsequently amended in July 2023, September 2024, and July 2025 (the “Renaissance Agreement”). Pursuant to the Renaissance Agreement, Renaissance agreed to manufacture for, and provide to the Company, neffy nasal unit dose sprays (“Renaissance Products”). The Company is obligated to provide Renaissance with certain supplies to manufacture the Renaissance Products and to purchase from Renaissance a mid-double-digit percentage of the Company’s annual aggregate Renaissance Product requirements in the EU, and a high double-digit percentage of the Company’s annual aggregate Renaissance Product requirements in the U.S. The Renaissance Agreement contains conventional commercial pharmaceutical manufacturing provisions including certain minimum purchase amounts to be determined in the future based on forecast needs and minimum batch size projections. The Company may also request Renaissance to perform certain services related to the Renaissance Product, for which the Company will pay reasonable compensation to Renaissance.

Pursuant to the amendment in September 2024, the amended initial term of the Renaissance Agreement commenced on September 17, 2024, and will terminate (a) for Renaissance Product designated for commercial sale in the U.S., on December 31 immediately following the fifth anniversary of the initial U.S. launch date (“U.S. Initial Term”), and (b) for Renaissance Product designated for commercial sale in the EU, on December 31 immediately following the fifth anniversary of the initial EU launch date (“EU Initial Term”), in each case unless earlier terminated by one of the parties. The U.S. Initial Term and EU Initial Term automatically renew for successive two-year terms (“Renewal Term”). Either party may elect not to renew the U.S. Renewal Term and/or the EU Renewal Term by providing the requisite prior notice to the other party, with the initial terms automatically renewing for successive two-year terms, unless either party gives notice pursuant to the Renaissance Agreement. Either party may terminate the Renaissance Agreement (1) for uncured material breach of the other party, (2) upon notice for insolvency-related events of the other party that are not discharged within a defined time period, (3) on a product-by-product basis if the manufacture, distribution or sale would materially contravene any applicable law, (4) by providing the requisite notice if (a) the authorization and approval to distribute or sell Renaissance Product in the U.S. is not granted on or before a specified date, (b) the authorization and approval representing more than a certain number of units of Renaissance Product sold in the U.S. during the last calendar year is withdrawn by the FDA, or (c) the Company decided in its sole discretion to cease commercializing the Renaissance Product in the U.S., (5) in the case of a force majeure event that continues for six months or more, or (6) a violation by the other party of trade control or anti-corruption laws.

Supply Agreement with Ompi

In October 2024, the Company entered into a supply agreement (the “Ompi Supply Agreement”) with Nuova Ompi S.r.l. (“Ompi”), pursuant to which Ompi has agreed to supply glass microvials to support the Company’s manufacture and commercialization of neffy. Under the Ompi Supply Agreement, the Company has committed to purchase, and Ompi has committed to supply, specified annual minimum quantities of glass microvials, which may be increased with prior notice by the Company or through the rolling forecast process, subject to a specified annual cap. Ompi is obligated to establish the relevant manufacturing force, assets and capabilities needed to comply with its supply obligations.

In December 2024, as partial consideration for the supply arrangement, the Company made an upfront payment of €3.0 million (approximately $3.2 million in U.S. dollars) to Ompi. The upfront payment was capitalized as an other asset on the condensed consolidated balance sheets and will be amortized through cost of goods sold in the condensed consolidated statement of operations and comprehensive loss on a straight-line basis over the term of the Ompi Supply Agreement. The supply price for the glass microvials is specified in the Ompi Supply Agreement, subject to an annual adjustment that is capped at a specified percentage except in the case of material and extraordinary increase in Ompi’s cost of manufacturing the glass microvials.

The Ompi Supply Agreement will expire on December 31, 2035, and may be terminated (i) upon the parties’ mutual written consent, (ii) by the Company for any reasonable business reasons (in which case the termination will become effective at the end of the following calendar year), or (iii) by the non-breaching party if the other party is in material breach of the Ompi Supply Agreement and fails to cure such breach within 90 days after receipt of notice thereof from the non-breaching party.

12. Common Stock and Stockholders’ Equity

Authorized Shares

The Company’s current Amended and Restated Certificate of Incorporation authorizes 200,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share.

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance consisted of the following:


	September 30, 2025		December 31, 2024
Common stock options granted and outstanding		17,106,592		15,161,180
Restricted stock units granted and outstanding		1,382		2,763
Common stock reserved for future awards or option grants		8,081,362		5,905,773
Common stock reserved for future employee stock purchase plan issuances		2,811,182		2,223,100
Warrants to purchase common stock		45,456		45,456
Total		28,045,974		23,338,272

Equity Offerings

In January 2025, the Company filed an automatic shelf registration statement on Form S-3ASR with the Securities and Exchange Commission which became effective upon filing (the “Shelf Registration Statement”). The Shelf Registration Statement allows the Company, from time to time, to offer and sell any combination of shares of the Company’s common stock and preferred stock, various series of debt securities, and/or warrants to purchase any of such securities, either individually or in combination with other securities, in one or more offerings. The Company simultaneously entered into a Controlled Equity OfferingSM sales agreement (the “Equity Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) to allow the Company to offer, sell and issue shares of the Company’s common stock from time to time through Cantor acting as sales agent and up to a maximum aggregate offering price of $200.0 million. As of September 30, 2025, no securities have been sold pursuant to the Shelf Registration Statement or Equity Sales Agreement.

13. Stock-Based Compensation

Stock-based compensation expense recognized for all equity awards has been reported in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Research and development expense	$	664	$	734	$	1,991	$	2,558
Selling, general and administrative expense		5,025		2,857		14,367		7,713
Total	$	5,689	$	3,591	$	16,358	$	10,271

During the three and nine months ended September 30, 2025, $0.3 million and $0.8 million of stock compensation expense was capitalized into inventory, respectively. During each of the three and nine months ended September 30, 2024, $0.1 million of stock compensation expense was capitalized into inventory.

As of September 30, 2025, the total unrecognized stock-based compensation expense related to outstanding employee options was $48.3 million, which is expected to be recognized over a remaining weighted-average period of approximately 2.4 years.

As of September 30, 2025 and December 31, 2024, there were 1,382 and 2,763 restricted stock units outstanding, respectively.

Equity Incentive Plans

In September 2018, ARS Pharma adopted the 2018 Equity Incentive Plan. As a result of the Merger, on November 8, 2022 ARS Pharma assumed Silverback’s 2016 and 2020 Equity Incentive Plans, and Employee Stock Purchase Plan (“ESPP”). There were 111,918 shares and 43,679 shares of common stock purchased under the ESPP during the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, 25,737,116 shares were authorized under the 2016 and 2020 Equity Incentive Plans, of which 7,784,017 shares were available for future grant, and 12,967,489 shares were outstanding. As of September 30, 2025, 6,634,333 shares were authorized under the 2018 Equity Incentive Plan, of which 297,345 shares were available for future grant, and 4,140,485 shares were outstanding. The Company does not intend to grant future stock options or other equity awards under the 2016 or 2018 Equity Incentive Plans.

Stock Options

Stock options granted under the Company’s equity incentive plans expire no later than 10 years from the date of grant and generally vest over a four-year period, with vesting either occurring at a rate of 25% at the end of the first year and thereafter in 36 equal monthly installments or on a monthly basis. In the case of awards granted to the Company’s non-employee board members, vesting generally occurs on a monthly basis over three years or in full on an annual basis. The Company issues new shares of common stock upon the exercise of stock options.

A summary of the Company’s stock option activity for the nine months ended September 30, 2025 is as follows:


						Weighted-
	Shares			Weighted-		Average		Aggregate
	Subject to			Average		Remaining		Intrinsic
	Options			Exercise		Contractual		Value
	Outstanding			Price		Life (Years)		(in thousands)
Outstanding at December 31, 2024		15,161,180		$	6.63
Granted		3,295,750		$	11.67
Exercised		(776,707	)	$	3.92
Forfeited		(573,631	)	$	11.13
Outstanding at September 30, 2025		17,106,592		$	7.58		7.4

ARS Pharmaceuticals, Inc. 10-Q