What happened
Shares of ARS Pharmaceuticals (SPRY 3.21%) were down more than 57% as of 11:30 a.m. ET on Wednesday after the company announced the Food and Drug Administration (FDA) had rejected its lead therapy. The stock is down more than 65% this year and reached a 52-week low on Wednesday of $2.55.
So what
ARS is a clinical-stage biotech company that focuses on therapies to treat Type 1 allergic reactions from food, medications, and insect bites. The company said Tuesday after the markets closed that the FDA issued a Complete Response Letter (CRL) regarding its New Drug Application (NDA) for its epinephrine nasal spray Neffy. In the CRL, the FDA requested completion of a study assessing repeat doses of Neffy before it would approve the therapy.
The drug would be an alternative to epinephrine injectable therapies such as EpiPen and would be used for Type 1 allergic reactions that could lead to life-threatening anaphylactic shock. ARS said that it was initially told last month by the FDA that it would be allowed to complete the dosing study once the drug was on the market.
The rejection is a surprise because an advisory committee to the FDA had voted to support Neffy's approval in May.
Now what
The company has no marketed therapies and was counting heavily on Neffy, so the FDA's decision is a huge setback. The company sees the product as a solid alternative to injectable epinephrine devices because it would be easier and safer to carry. Investors will want to be wary because the FDA's decision signals that the bar will be set high for Neffy's approval. The company said it expects to have $195 million in cash on hand by the second half of 2024, when it said it hopes to launch Neffy, pending its approval.