Q2 2026 ARS Pharmaceuticals Inc Earnings Call

August 13, 2026

Operator: Good afternoon, and welcome to ARS Pharma Q2 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the company's prepared remarks, we will open the line for questions. Please be advised that today's conference is being recorded. I will now turn the call over to Monique Allaire, IR representative for the company. Please go ahead.

Speaker #1: Please be advised that today's conference is being recorded. I will now turn the call over to Monique Allaire. IR representative for the company, please go ahead.

Speaker #2: Good afternoon, and thank you for joining us. With me on the call today is Dawn Casale, President and CEO of ARS Pharma. Kathy Scott, our Chief Financial Officer, will join us for the Q&A session.

Monique Allaire: Good afternoon, and thank you for joining us. With me on the call today is Don Casale, President and CEO of ARS Pharma. Kathy Scott, our Chief Financial Officer, will join us for the Q&A session. Earlier today, we issued a press release outlining ARS Pharma's corporate priorities and commercial highlights and detailing its financial results for the second quarter of 2026. That press release can be found in the Investors and Media section of the company's website at ars-pharma.com. Before we begin, please note that today's remarks may contain forward-looking statements and actual results may differ materially. Please refer to our press release and SEC filings for further risk disclosures. With that, I'll turn the call over to Don.

Monique Allaire: Good afternoon, and thank you for joining us. With me on the call today is Donn Casale, President and CEO of ARS Pharma. Kathy Scott, our Chief Financial Officer, will join us for the Q&A session. Earlier today, we issued a press release outlining ARS Pharma's corporate priorities and commercial highlights and detailing its financial results for the Q2 of 2026. That press release can be found in the Investors and Media section of the company's website at ars-pharma.com. Before we begin, please note that today's remarks may contain forward-looking statements and actual results may differ materially. Please refer to our press release and SEC filings for further risk disclosures. With that, I'll turn the call over to Donn.

Speaker #2: Earlier today, we issued a press release outlining ARS Pharma's corporate priorities and commercial highlights, and detailing its financial results for the second quarter of 2026.

Speaker #2: That press release can be found in the investors and media section of the company's website, at ars-pharma.com. Before we begin, please note that today's remarks may contain forward-looking statements and actual results may differ materially.

Speaker #2: Please refer to our press release and SEC filings for further risk disclosures. With that, I'll turn the call over to Dawn.

Speaker #3: Thank you, Monique, and good afternoon, everyone. It's an absolute honor to host my first earnings call as CEO. This is a pivotal time for ARS Pharmaceuticals, and I look forward to sharing my strategic vision today.

Donn Casale: Thank you, Monique, and good afternoon, everyone. It's an absolute honor to host my first earnings call as CEO. This is a pivotal time for ARS Pharmaceuticals, and I look forward to sharing my strategic vision today, along with the corporate priorities that will drive our next chapter of growth. Over the past month, I've conducted a deep review with our commercial, clinical, and corporate teams and met with many of our investors and shareholders. Those conversations confirmed both the significant market opportunity ahead and the need for a disciplined operational approach going forward. Today, I want to walk you through how I see the business, what's working, what's changing, and what to expect from ARS. What I'm outlining is more than a shift in our commercial strategy. It is a fundamental change in how we manage our business and allocate capital.

Speaker #3: Along with the corporate priorities that will drive our next chapter of growth. Over the past month, I've conducted a deep review with our commercial, clinical, and corporate teams.

Speaker #3: I met with many of our investors and shareholders. Those conversations confirmed both the significant market opportunity ahead and the need for a disciplined operational approach going forward.

Speaker #3: Today, I want to walk you through how I see the business, what's working, what's changing, and what to expect from ARS. What I'm outlining is more than a shift in our commercial strategy.

Speaker #3: It is a fundamental change in how we manage our business and allocate capital. Against that backdrop, I'm laying out three strategic priorities that will guide our next phase.

Donn Casale: Against that backdrop, I'm laying out three strategic priorities that will guide our next phase. First, targeted provider commercial execution. We are prioritizing our resources and focus where they make the greatest immediate impact on neffy market share, the healthcare provider. Second, financial discipline. We are implementing a rigorous strategic cost optimization framework, significantly reducing SG&A expense with a focus on building a profitable neffy franchise with a predictable path to cash flow breakeven. Third, pipeline expansion, starting with chronic spontaneous urticaria or CSU. We are extending our intranasal epinephrine platform into a second large market, where we see significant opportunity to bring the first FDA-approved treatment for CSU acute flares. CSU addresses a critical unmet need and offers a compelling market expansion opportunity. Let me expand on the first strategic priority in more detail. Targeted provider commercial execution.

Speaker #3: First, targeted provider commercial execution. We are prioritizing our resources and focus where they make the greatest immediate impact on nephew market share. The healthcare provider.

Speaker #3: Second, financial discipline. We are implementing a rigorous strategic cost optimization framework, significantly reducing SG&A expense, with a focus on building a profitable nephew franchise with a predictable path to cash flow break-even.

Speaker #3: And third, pipeline expansion starting with chronic spontaneous urticaria, or CSU. We are extending our intranasal epinephrine platform into a second large market, where we see significant opportunity to bring the first FDA-approved treatment for CSU acute flares.

Speaker #3: CSU addresses a critical unmet need and offers a compelling market expansion opportunity. Let me expand on the first strategic priority in more detail: targeted provider commercial execution.

Speaker #3: Nephew should be the standard of care in this multi-billion-dollar market. Our primary objective is to increase market share, which we believe is the best indicator of commercial success for a product like Nephew.

Donn Casale: neffy should be the standard of care in this multi-billion dollar market. Our primary objective is to increase market share, which we believe is the best indicator of commercial success for a product like neffy. Starting this quarter, we will report on both total market share and share within our field-targeted call universe so you can track our progress directly. To level set where we are today, Q2 US net product revenue was $26.2 million, and total US market share reached 5%, doubling from 2.5% in the same period last year. Importantly, within our field sales targeted universe, market share increased to 8%, up from 4% in the prior year quarter. Additionally, we saw over 16,000 unique neffy prescribers in Q2, representing more than a threefold increase from the same period last year.

Speaker #3: Starting this quarter, we will report on both total market share and share within our field-targeted call universe, so you can track our progress directly.

Speaker #3: To level set where we are today, second quarter US net product revenue was $26.2 million. And total US market share reached 5%, doubling from 2.5% in the same period last year.

Speaker #3: Importantly, within our field sales-targeted universe, market share increased to 8%, up from 4% in the prior-year quarter. Additionally, we saw over 16,000 unique Neffy prescribers in the second quarter, representing more than a threefold increase from the same period last year.

Speaker #3: Neffy is an acute, life-saving rescue therapy. But unlike a traditional product that a patient takes to treat a condition, Neffy is prescribed, filled, and carried long before an event ever occurs.

Donn Casale: neffy is an acute life-saving rescue therapy, but unlike a traditional product that a patient takes to treat a condition, neffy is prescribed, filled, and carried long before an event ever occurs. In commercial terms, this is more like a prevention-based market versus a treatment market. That distinction is critical. In a treatment market, a patient is symptomatic and actively seeks immediate relief. In a prevention market, patients and providers default to the status quo unless there is a compelling reason or need to change. At launch, ARS invested heavily in broad direct consumer digital advertising. While that builds brand awareness, consumer advertising in a prevention-based market carries a high cost and does not always convert to utilization. Today, millions of patients remain inadequately protected, either because they were never offered a prescription or due to the fear or hesitation of carrying traditional needle-based injectors.

Speaker #3: In commercial terms, this is more like a prevention-based market versus a treatment market. That distinction is critical. In a treatment market, a patient is symptomatic and actively seeks immediate relief.

Speaker #3: In the prevention market, patients and providers default to the status quo unless there's a compelling reason or need to change. At launch, ARS invested heavily in broad direct-to-consumer digital advertising.

Speaker #3: While that builds brand awareness, consumer advertising in a high cost and does not always convert to utilization. Today, millions of patients remain inadequately protected either because they were never offered a prescription, or due to the fear or hesitation of carrying traditional needle-based injectors.

Speaker #3: That is the exact clinical gap nephew solves. But closing the gap relies less on broad consumer awareness and far more on changing long-established provider prescribing habits.

Donn Casale: That is the exact clinical gap neffy solves. Closing the gap relies less on broad consumer awareness and far more on changing long-established provider prescribing habits. Going forward, we have an opportunity to drive market share growth with a more efficient commercial strategy, but not at the expense of revenue. We are prioritizing our investments where they deliver the highest return. Our sales team calling on high volume locations to build provider conviction office by office. Our data highlights the impact of field engagement. Where our sales team is deployed, neffy has an 8% market share compared to approximately 1% in the non-targeted universe. Growth in this market is won through repeated high-quality clinical interactions, not through a single promotional campaign or market event. On the topic of reimbursement, we will continue to aggressively work towards expanding commercial and Medicaid coverage. Securing formulary position is the first step.

Speaker #3: Going forward, we have an opportunity to drive market share growth with a more efficient commercial strategy but not at the expense of revenue. We are prioritizing our investments where they deliver the highest return.

Speaker #3: Our sales team calling on high-volume locations to build provider conviction, office by office. Our data highlights the impact of field engagement. Where our sales team is deployed, nephew has an 8% market share.

Speaker #3: Compared to approximately 1% in the non-targeted universe. Growth in this market is won through repeated, high-quality clinical interactions. Not through a single promotional campaign or market event.

Speaker #3: On the topic of reimbursement, we will continue to aggressively work towards expanding commercial and Medicaid coverage. Securing formulae position is the first step. Beyond that, providers must appreciate and acknowledge the clinical gap nephew fills before coverage translates into prescriptions.

Donn Casale: Beyond that, providers must appreciate and acknowledge the clinical gap neffy fills before coverage translates into prescriptions. Building that provider conviction is our highest operational priority. Executing this strategy requires leadership that understands the nature of a prevention-based market and what it takes to change prescriber behavior. That is why I am thrilled to welcome Meg Smith to ARS as our new Chief Commercial Officer. A dynamic commercial leader with over 25 years of executive experience, Meg brings a proven track record of combining disciplined investment with deep operational accountability. Having worked closely with Meg during my time at Dynavax, I saw firsthand her inspirational leadership and operational rigor. She brings the exact playbook needed for this market, and I am confident she will hit the ground running, leading this next chapter of the neffy launch. In addition to strengthening our commercial leadership, we have completed the expansion of our field sales organization.

Speaker #3: Building that provider conviction is our highest operational priority. Executing this strategy requires leadership that understands the nature of a prevention-based market and what it takes to change prescriber behavior.

Speaker #3: That's why I'm thrilled to welcome Meg Smith to ARS as our new Chief Commercial Officer. A dynamic commercial leader with over 25 years of executive experience, Meg brings a proven track record of combining disciplined investment with deep operational accountability.

Speaker #3: Having worked closely with Meg during my time at Dynavax, I saw firsthand her inspirational leadership and operational rigor. She brings the exact playbook needed for this market, and I'm confident she'll hit the ground running, leading this next chapter of the nephew launch.

Donn Casale: Having worked closely with Meg during my time at Dynavax, I saw firsthand her inspirational leadership and operational rigor. She brings the exact playbook needed for this market, and I am confident she will hit the ground running, leading this next chapter of the neffy launch. In addition to strengthening our commercial leadership, we have completed the expansion of our field sales organization.

Speaker #3: In addition to strengthening our commercial leadership, we have completed the expansion of our field sales organization. Salesforce efforts will focus primarily on the highest value prescribers, which represents 44% of the total market opportunity.

Donn Casale: Salesforce efforts will focus primarily on the highest value prescribers, which represents 44% of the total market opportunity. I look forward to seeing what our now fully deployed, highly motivated, and focused sales team can do going forward. Looking ahead, we expect steady market share gains over successive quarters, not an overnight spike. We are focused on driving the next phase of growth with disciplined commercial execution, clear accountability, and prudent expense management. That brings me to our second strategic priority, financial discipline and greater OpEx control. Our total revenue in Q2 was $33.7 million, reflecting a combination of net product, collaboration, and supply revenue. Total operating expenses were $95.1 million, which included $12.8 million in cost of goods sold. As discussed, our prior commercial strategy emphasized broad consumer awareness, which was costly, resulting in an SG&A spend of approximately $77.6 million for Q2.

Speaker #3: I look forward to seeing what our now fully deployed, highly motivated, and focused sales team can do going forward. Looking ahead, we expect steady market share gains over successive quarters.

Speaker #3: This is not an overnight spike. We are focused on driving the next phase of growth with disciplined commercial execution, clear accountability, and prudent expense management. That brings me to our second strategic priority: financial discipline and greater OPEX control.

Speaker #3: Our total revenue in the second quarter was $33.7 million, reflecting a combination of net product, collaboration, and supply revenue. Total operating expenses were $95.1 million.

Speaker #3: Which included $12.8 million in cost of goods sold. As discussed, our prior commercial strategy emphasized broad consumer awareness, which was costly, resulting in an SP&A span of approximately $77.6 million for the second quarter.

Speaker #3: It is critical that we adjust our operating expenses to align with Nefecyl adoption to build a durable, profitable business. To get there, we will plan and spend based on reasonable expectations and more efficient commercialization efforts.

Donn Casale: It is critical that we adjust our operating expenses to align with neffy adoption to build a durable, profitable business. To get there, we will plan and spend based on reasonable expectations and more efficient commercialization efforts. To give a clear baseline for our future runway, we have adjusted our aggregate SG&A and R&D expenses for H2 2026 to be in the range of $114 million to $126 million, which includes stock-based compensation of about $14 million to $16 million. As a result, total cash-based SG&A and R&D expenses for H2 2026 are expected to be in the range of $100 million to $110 million, driven by a more than 40% reduction in cash-based SG&A expenses from H1 2026. Importantly, we expect this spending trend to continue throughout 2027. We believe this operational rigor is what makes our outlook predictable.

Speaker #3: To give a clear baseline for our future runway, we've adjusted our aggregate SG&A and R&D expenses for the second half of 2026 to be in the range of $114 million to $126 million, which includes stock-based compensation of about $14 million to $16 million.

Speaker #3: As a result, total cash-based SP&A and R&D expenses for the second half of 2026 are expected to be in the range of $100 million to $110 million.

Speaker #3: Driven by a more than 40% reduction in cash-based SP&A expenses from the first half of 2026. Importantly, we expect this spending trend to continue throughout 2027.

Speaker #3: We believe this operational rigor is what makes our outlook predictable. We ended the second quarter with $143.8 million in cash, cash equivalents, and short-term investments.

Donn Casale: We ended Q2 with $143.8 million in cash equivalents, and short-term investments. With that capital, alongside our revised expense base, we see a path to cash flow breakeven by the end of 2027, which would position neffy to be a foundation for long-term optionality and future value unlock for our shareholders. Part of that value unlock will come from our third strategic priority, advancing our CSU program and maximizing the opportunities with our intranasal epinephrine platform. Beyond our foundational business with neffy, we believe we possess a compelling upside with our CSU program. Personally, I am very excited about this opportunity. To start, we previously projected a data readout from our Phase 2b trial by the end of this year.

Speaker #3: With that capital, alongside our revised expense base, we see a path to cash flow break-even by the end of 2027, which would position ARS to be a foundation for long-term optionality and future value unlock for our shareholders.

Speaker #3: Part of that value unlock will come from our third strategic priority, advancing our CSU program and maximizing the opportunities with our intranasal epinephrine platform.

Speaker #3: Beyond our foundational business with Nephew, we believe we possess a compelling upside with our CSU program. Personally, I'm very excited about this opportunity. To start, we previously projected a data readout from our Phase 2b trial by the end of this year.

Speaker #3: While enrollment in the interim patient population was recently completed, the design of this trial required a patient to experience three separate flare episodes.

Donn Casale: While enrollment in the interim patient population was recently completed, the design of this trial required a patient to experience and log three separate flare episodes, treating them with placebo and varying doses of intranasal epinephrine. Given the real-world time required for patients to complete all three episodes for valid data collection, the interim readout is now expected in Q1 2027. This modest change in timeline does not change the value of this program. CSU is a meaningful market with a major unmet public health need. There are currently no FDA-approved on-demand products to manage acute CSU flares, representing a clear expansion opportunity. Epinephrine's role in rapid systemic symptom relief is well-established. The challenge in the past has never been the molecule. It has been the delivery mechanism and the dose. This is where our intranasal technology changes the dynamic, delivering rapid, non-invasive relief during acute flares.

Speaker #3: Treating them with placebo and varying doses of intranasal epinephrine. Given the real-world time required for patients to complete all three episodes, for valid data collection, the interim readout is now expected in Q1 2027.

Speaker #3: This modest change in the timeline does not change the value of this program. CSU is a meaningful market with a major unmet public health need.

Speaker #3: There are currently no FDA-approved on-demand products to manage acute CSU flares, representing a clear expansion opportunity. Epinephrine's role in rapid, systemic symptom relief is well established.

Speaker #3: The challenge in the past has never been the molecule; it's been the delivery mechanism and the dose. This is where our intranasal technology changes the dynamic.

Speaker #3: Delivering rapid, non-invasive relief during acute flares. Because we can leverage our existing commercial infrastructure and overlapping targeted prescribers, this program could represent a high-margin growth driver built entirely on top of our nephew foundation.

Donn Casale: Because we can leverage our existing commercial infrastructure and overlapping targeted prescribers, this program could represent a high-margin growth driver built entirely on top of our neffy foundation. We look forward to updating you in the future on this exciting program. In closing, our strategic priorities for the next phase of ARS are established, and the baseline for how we operate will be defined by discipline, provider-targeted commercial strategy, and strong financial stewardship. We believe that doing this well yields a profitable company built on durable, recurring neffy franchise with additional upside driven by our CSU program. That is the business we are out to build and why I am excited about our future. I look forward to updating you on our progress in the quarters ahead. With that, we will now open the line for your questions. Thank you.

Speaker #3: We look forward to updating you in the future on this exciting program. In closing, our strategic priorities for the next phase of ARS are established, and the baseline for how we operate will be defined by disciplined, provider-targeted commercial strategy and strong financial stewardship.

Speaker #3: We believe that doing this well yields a profitable company built on durable, recurring nephew franchise with additional upside driven by our CSU program. That is the business we're out to build and why I'm excited about our future.

Speaker #3: I look forward to updating you on our progress in the quarters ahead. With that, we'll now open the line for your questions. Thank you.

Operator: Thank you. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Josh Schimmer of Cantor Fitzgerald. Your line is open.

Speaker #1: Thanks. Thank you to ask a question. Please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Speaker #1: Please stand by while we compile the Q&A roster. And our first question comes from Josh Schwimmer of Canterford Gerald. Your line is open.

Speaker #2: Great, thanks for taking the questions and for articulating your views on the outlook for the franchise. Don, a couple of quick questions—maybe you can discuss both the gross-to-net in the quarter, how that's been evolving, as well as the product margins and the cost of goods that look like those ticked up this quarter, and what might have driven that.

Josh Schimmer: Great. Thanks for taking the questions and for articulating your views on the outlook for the franchise, Don. A couple of quick questions. Maybe you can discuss both the gross to net in the quarter, how that has been evolving, as well as the product margins and the cost of goods that look like those ticked up this quarter and what might have drove that, and what do you envision going forward? Then for the field-targeted accounts, maybe you can talk a little bit about what you think the company can do going forward to really get that 8% penetration up substantially higher. Thank you.

Speaker #2: What do you envision going forward? And then for the field-targeted accounts, maybe you can talk a little bit about what you think the company can do going forward to really get that 8% penetration up substantially higher.

Speaker #2: Thank you.

Speaker #3: Hey, Josh. Hey, thanks for your questions. So I'll start with both gross to net and gross margin. I'll have maybe Kathy add a bit more color to that.

Donn Casale: Hey, Josh. Hey, thanks for your questions. I will start with both gross to net and gross margin. I will have maybe Kathy add a bit more color to that. But as it relates to gross to net, we anticipate kind of ebb and flows as it relates to gross to net, depending on the mix of different various segments each quarter. But that being said, we are comfortable in the range of 50% or approaching 50%. Importantly, though, when we look ahead and some of their forward-looking guidance as it relates to cash flow breakeven, as well as neffy franchise profitability, we are really satisfied and comfortable with the gross to net that we have currently. In regards to gross margin, certainly, we anticipate that to continue to get more favorable over time.

Speaker #3: But as it relates to gross to net, we anticipate kind of ebb and flows that relates to gross to net. Depending on the mix of different various segments, each quarter.

Speaker #3: But with that being said, we're comfortable in the range of 50% or approaching 50%. Importantly, though, when we look ahead in some of the forward-looking guidance as it relates to cash flow break-even, as well as nephew franchise profitability, we're really satisfied and comfortable with the gross to net that we have.

Donn Casale: Importantly, though, when we look ahead and some of their forward-looking guidance as it relates to cash flow breakeven, as well as neffy franchise profitability, we are really satisfied and comfortable with the gross to net that we have currently. In regards to gross margin, certainly, we anticipate that to continue to get more favorable over time. But Kathy, you want to maybe add a little bit more color as it relates to kind of the gross margin?

Speaker #3: Currently, in regards to gross margin, you certainly we anticipate that to continue to get more favorable over time. But Kathy, you might maybe add a little bit more color as it relates to kind of the gross margin.

Donn Casale: But Kathy, you want to maybe add a little bit more color as it relates to kind of the gross margin?

Speaker #4: Sure. Hi, Josh. So our gross margin was about—excuse me—62% in Q2 and a little over 64% year-to-date. And that was lower than we project going forward for a few reasons.

Kathleen Scott: Sure. Hi, Josh. So our gross margin was about, excuse me, 62% in Q2 and a little over 64% year to date. And that was lower than we project going forward for a few reasons. One is the establishment of some reserves for short-dated product, some manufacturing inefficiencies as we continue to scale production, and costs for the ex-US product launches. So we do expect our gross margin to improve over time and really as we get into 2027, as we streamline and grow our manufacturing.

Kathy Scott: Sure. Hi, Josh. So our gross margin was about, excuse me, 62% in Q2 and a little over 64% year to date. And that was lower than we project going forward for a few reasons. One is the establishment of some reserves for short-dated product, some manufacturing inefficiencies as we continue to scale production, and costs for the ex-US product launches. So we do expect our gross margin to improve over time and really as we get into 2027, as we streamline and grow our manufacturing.

Speaker #4: One is the establishment of some reserves for short-dated product, some manufacturing inefficiencies as we continue to scale production, and costs for the XUS product launches.

Speaker #4: So we do expect our gross margin to improve over time, and really as we get into 2027, as we streamline and grow our manufacturing.

Speaker #2: Got it. Thank you.

Josh Schimmer: Got it. Thank you.

Speaker #3: And then Josh, regarding the 8% market share and certainly the increase from a year ago of 4%, we're excited. One of the areas that we believe is going to continue to help support market share growth is we've completed the expansion of our sales team.

Donn Casale: And then Josh, regarding the 8% market share and certainly the increase from a year ago of 4%, we are excited. One of the areas that we believe is going to continue to help support market share growth is we have completed the expansion of our sales team. It is fully deployed, and so we have an opportunity to leverage that moving forward into Q3. So that is something that we are very excited about. Ultimately, at the end of the day, we know when we send in our field team, we can increase market share. So that coupled with we will continue to evolve our messaging campaign. We think there is an opportunity to continue to engage not only the physician, but the nurses and the MAs to really get them to stop and think about the consequences of inaction. And so our messaging campaign will continue to evolve.

Speaker #3: It's fully deployed, and so we have an opportunity to leverage that moving forward into Q3. That is something we're very excited about.

Speaker #3: Ultimately, at the end of the day, we know when we send in our field team, we can increase market share. So, that, coupled with the fact that we'll continue to evolve our messaging campaign.

Speaker #3: We think there's an opportunity to continue to engage not only the physicians, but the nurses and the MAs, to really get them to stop and think about the consequences of inaction.

Donn Casale: We think there is an opportunity to continue to engage not only the physician, but the nurses and the MAs to really get them to stop and think about the consequences of inaction. And so our messaging campaign will continue to evolve. But ultimately, it's blocking and tackling execution provider by provider in these type of entrenched markets, which we believe will continue to drive market share, which ultimately underpins our confidence around neffy profitability.

Speaker #3: And so our messaging campaign will continue to evolve. But ultimately, it's blocking and tackling execution provider by provider in these type of entrenched markets.

Donn Casale: But ultimately, it's blocking and tackling execution provider by provider in these type of entrenched markets, which we believe will continue to drive market share, which ultimately underpins our confidence around neffy profitability.

Speaker #3: Which we believe will continue to drive market share, which ultimately underpins our confidence around near-term profitability.

Josh Schimmer: Thanks very much. Good luck.

Speaker #2: Thanks very much. Good luck.

Speaker #3: Thank you, Josh.

Donn Casale: Thank you, Josh.

Speaker #1: Thank you. And our next question comes from Ryan Deschner of Raymond James. Your line is open.

Operator: Thank you. Our next question comes from Ryan Deschner of Raymond James. Your line is open.

Speaker #5: Hi there. Thanks for the question. Two for me. The first, how are you thinking about the progression of payer access going forward? And how critical to your new strategy is getting on care marks formulary in the next cycle?

Ryan Deschner: Hi there. Thanks for the question. Two for me. First, how are you thinking about the progression of payer access going forward, and how critical to your new strategy is getting on Caremark's formulary in the next cycle? Regarding DTC, can you give us a little more color on what specifically the new sort of strategy for DTC will look like going forward in terms of channels, media, and spend, and how this will be different from the previous strategy? Thanks.

Speaker #5: And then regarding DTC, can you give us a little more color on what specifically the new sort of strategy for DTC will look like going forward in terms of channels, media, and spend?

Speaker #5: And how this will be different from the previous strategy? Thanks.

Speaker #3: Sure. Thanks, Ryan, for the question. So first, with access, we'll continue to engage and work towards reducing friction. Obviously, access is important. It is a key first step.

Donn Casale: Sure. Thanks, Ryan, for the question. First, with access, we will continue to engage and work towards reducing friction. Obviously, access is important. It is a key first step. But we believe the second step around provider conviction and ensuring that they have essentially the reason to change and working with providers to change is going to be critical as we move forward. There is coverage currently, 90% commercial coverage, 57% without a prior authorization. But with that, we do believe, again, we are going to have to continue to work on provider conviction because our strategy has shifted from consumer and activating the consumer to really activating the provider, which allows us to be much more efficient in our model. And we believe there is a recurring opportunity moving forward with that. As it relates to DTC, obviously when we launched, we had significant DTC, which is linear TV, closed-circuit TV.

Speaker #3: But we believe the second step around provider conviction, and ensuring that they have essentially the reason to change and working with providers to change, is going to be critical as we move forward.

Speaker #3: So, there’s coverage currently: 90% commercial coverage, 57% without a prior authorization. But with that, we do believe, again, we’re going to have to continue to work on provider conviction because our strategy has shifted from consumer and activating the consumer to really activating the provider, which allows us to be much more efficient in our model.

Donn Casale: There is coverage currently, 90% commercial coverage, 57% without a prior authorization. But with that, we do believe, again, we are going to have to continue to work on provider conviction because our strategy has shifted from consumer and activating the consumer to really activating the provider, which allows us to be much more efficient in our model. And we believe there is a recurring opportunity moving forward with that. As it relates to DTC, obviously when we launched, we had significant DTC, which is linear TV, closed-circuit TV.

Speaker #3: And we believe there's a recurring opportunity moving forward with that. As it relates to DTC, obviously, when we launched, we had significant DTC, which is linear TV and closed-circuit TV.

Speaker #3: It drove a lot of awareness in the marketplace, and that awareness still exists today. But as we look ahead, we're focusing on more efficient consumer campaigns and media spend.

Donn Casale: It drove a lot of awareness in the marketplace, and that awareness still exists today. But as we look ahead, we are looking towards more efficient consumer campaigns and media spend that is going to be around traditional channels such as social media, search, those types of channels, which we believe are much more efficient. We use those same channels, quite frankly, for provider as well, which allows us to be more targeted given the provider universe. But there is a pretty significant shift away from this broad-based DTC, which has enabled us to be much more efficient on our SG&A, which we reported today.

Speaker #3: That's going to be around traditional channels such as social media, search, those types of channels, which we believe are much more efficient. We'll use those same channels, quite frankly, for provider as well, which allows us to be more targeted.

Speaker #3: Given the provider universe, there's been a pretty significant shift away from this broad-based DTC, which has enabled us to be much more efficient on our SG&A, as we reported today.

Speaker #1: Thank you.

Operator: Thank you.

Speaker #5: Thank you very much.

Ryan Deschner: Thank you very much.

Speaker #3: Thank you, Ryan.

Donn Casale: Thank you, Ryan.

Speaker #1: And our next question comes from Rana Ruiz of Leering Partners. Your line is open.

Operator: Our next question comes from Roanna Ruiz of Leerink Partners. Your line is open.

Speaker #6: Hi, everyone. I have a couple of questions. First, could you talk about the path to cash flow break-even into 2027? Maybe elaborate on what assumptions are baked into that goal.

Roanna Ruiz: Hi, everyone. A couple questions for me. First, could you talk about the path to cash flow break even into 2027? Maybe elaborate on what assumptions are baked into that goal. Are you also considering things like the back-to-school potential tailwind for neffy next year?

Speaker #6: And are you also considering things like the back-to-school potential tailwind for nephew next year?

Speaker #3: Sure. Regarding the cash flow break-even comment, we're comfortable certainly with that statement. A big part of that is being driven around our spend and being more efficient on our spend as we shared our SG&A was reduced by over 40% from the first semester to the second semester.

Donn Casale: Sure. Regarding the cash flow break even comment, we are comfortable certainly with that statement. A big part of that is being driven around our spend and being more efficient on our spend. As we shared, our SG&A was reduced by over 40% from the first semester to the second semester. Importantly, that trend continues throughout all of 2027. So we have a much more efficient, effective spend on SG&A. So that is certainly a big underpinning of that confidence around break even. Also, as we look at revenue, as I said earlier around gross to net and some of our other assumptions, we feel very comfortable in continued revenue gains and market share gains quarter-over-quarter, year-over-year, which will also underpin our path to profitability and cash flow break even moving forward.

Speaker #3: And importantly, that trend continues throughout all of 2027, so we have a much more efficient, effective spend on SG&A. That's certainly a big underpinning of that confidence around break-even.

Speaker #3: Also, as we look at revenue, as I said earlier, around gross to net and some of our other assumptions, we feel very comfortable in continued revenue gains and market share gains quarter over quarter, year over year, which will also underpin our path to profitability and cash flow break-even.

Speaker #3: Moving forward.

Roanna Ruiz: Got it. A quick-

Speaker #6: Got it. And a quick.

Donn Casale: On that back to school.

Speaker #3: And now back to school. I was going to on back to school, it's obviously Q3 is the busiest quarter. The strategy stays the same.

Roanna Ruiz: Yep.

Donn Casale: On back to school, obviously Q3 is the busiest quarter. The strategy stays the same. It is around engaging providers and driving awareness and conviction for change with those providers. Q3 just offers more volume relative to the other quarters, as we all know. So our strategy will stay the same. Obviously we anticipate more prescriptions in Q3 relative to other quarters because of back to school.

Speaker #3: It's about engaging providers and driving awareness and conviction for change. With those providers, Q3 just offers more volume relative to the other quarters, as we all know.

Speaker #3: So our strategy will stay the same. And so obviously, we anticipate more prescriptions in Q3 relative to other quarters because of back to school.

Speaker #6: Makes sense. And a quick follow-up. Also want to ask, you seem to be talking about meaningfully changing provider prescribing habits. And that kind of your overarching strategy going forward.

Roanna Ruiz: Makes sense. A quick follow-up. Also wanted to ask, you seem to be talking about meaningfully changing provider prescribing habits and that kind of your overarching strategy going forward. Could you elaborate a bit more, like what particular habits that you want to break? Any sort of education or detailing that your new field force might want to look at?

Speaker #6: Could you elaborate a bit more? What particular habits that you want to break? Any sort of education or detailing that your new field force might want to look at?

Speaker #3: Yeah. The habits we're trying to break is just entrenched behavior for decades long of using auto-injectors and that takes time. And these prevention type of markets where providers are doing the same thing over and over, we believe high-level frequency with the right message at the right time will break those habits.

Donn Casale: Yeah. The habits we're trying to break is this entrenched behavior for decades long of using auto-injectors, and that takes time. In these prevention types of markets where providers are doing the same thing over and over, we believe high level of frequency with the right message at the right time will break those habits. Our job, quite frankly, is to get our providers to stop and think about the problem that's in front of them. Once there's an appreciation around the problem, the solution becomes obvious. That's really the strategy. So when we talk about the habit of a provider, the fact is they're writing the same thing and not thinking about the consequences of that action.

Speaker #3: Our job, quite frankly, is to get our providers to stop and think about the problem that's in front of them. Once there's an appreciation around the problem, the solution becomes obvious.

Speaker #3: And that's really the strategy. So when we talk about the habit, the provider, it's the fact is they're writing the same thing and not thinking about the consequences of that action.

Speaker #3: And that's where the field team comes in to really tell the story and sell the story on the value proposition of nephew. As well as the problem that nephew solves for.

Donn Casale: That's where the field team comes in to really tell the story and sell the story on the value proposition of neffy, as well as the problem that neffy solves for. So that takes time, and that's why when we think about looking forward, we believe there's a very methodical increase quarter over quarter of both revenue and share gains, and it's going to be provider by provider. But we're really excited about the fact that we have the full team in place, execution and fundamentals is what's going to be what changes this.

Speaker #3: So that takes time. And that's why when we think about looking forward, we believe there's a very methodical increase quarter over quarter of both revenue and share gains and it's going to be provider by provider but we're really excited about the fact that we have the full team in place execution and fundamentals is what's going to be what changes this.

Speaker #6: Makes sense. Thanks.

Roanna Ruiz: Makes sense. Thanks.

Speaker #3: Thanks, Rowena.

Donn Casale: Thanks, Marina.

Donn Casale: Thanks, Roanna.

Speaker #1: Thank you. And our next question comes from Lachlan Hanberry Brown of William Blair. Your line is open.

Operator: Thank you. Our next question comes from Lachlan Hanbury-Brown of William Blair. Your line is open.

Speaker #5: Yeah. Hey, thanks for taking the questions. So, Dawn, you've talked about sort of focusing on the prescriber engagement. The obvious outcome of that is sort of scripts and revenue.

Lachlan Hanbury-Brown: Yeah. Hey, thanks for taking the questions. Don, you've talked about focusing on the prescriber engagement. The obvious outcome of that is scripts and revenue. I am wondering if there are other metrics that you can look at in the interim. You just said that it takes time, obviously, to change these behaviors and grow market share. Are there other metrics of prescriber engagement you can look at beyond just scripts that may help you evaluate how the current strategy is going?

Speaker #5: But I'm wondering if there are other metrics that you can look at in the interim. I mean, you've sort of just said that it takes time, obviously, to change these behaviors and grow market share.

Speaker #5: So, are there kind of other metrics of prescriber engagement you can look at beyond just scripts that may help you sort of evaluate how the current strategy is going?

Speaker #3: Well, we'll certainly look at, obviously, the best indicator is scripts and market share, and that's going to be an important metric, as I said earlier.

Donn Casale: Well, we will certainly look at, obviously the best indicator is scripts and market share, and that is going to be an important metric. As I said earlier, we are going to share every quarter so you can track our progress from a year-over-year perspective. We are going to look at activity and where we look at frequency. Again, it is going to take multiple calls on not only the physician, but the nurse, the MA, the total office. We will look at the types of activities we do that seems to drive different types of behaviors and outcomes from a script perspective. It is going to come down to, again, some of the basics around frequency, the right message with the right targets over time. We will continue to monitor that.

Speaker #3: We're going to share every quarter. So you can track our progress from a year-over-year perspective. We're going to look at activity and where we look at frequency.

Speaker #3: So again, it's going to take multiple calls on not only the physician but the nurse, the MA, the total office. And so we'll look at the types of activities we do that seem to drive different types of behaviors and outcomes from a script perspective.

Speaker #3: But it is going to come down to, again, some of the basics around frequency—the right message with the right targets, over time. And so we’ll continue to monitor that.

Speaker #3: But we have a blueprint, and we certainly have seen that when we deploy the team, we see significant changes in market share. And as I said in the prepared remarks, we have 8% share in that total field-targeted universe.

Donn Casale: But we have a blueprint and we certainly have seen where we deploy the team, we see significant changes in market share. As I said in the prepared remarks, we have 8% share in that total field targeted universe versus a 1% share where we don't send our team. So that gives us a lot of confidence to continue with this strategy and focus on execution.

Speaker #3: Versus a 1% share, where we don't send our team. So that gives us a lot of confidence to continue with this strategy and focus on execution.

Speaker #5: Got it. Thanks. And maybe the second one, I did see in the NQ that you mentioned into a license agreement in July for worldwide rights, worldwide, rights for certain IP.

Lachlan Hanbury-Brown: Got it. Thanks. Maybe the second one, I did see in the 10-Q that you entered into a license agreement in July for worldwide rights to certain IP. Anything you can say on that? I mean, is that a potential pipeline expansion opportunity?

Speaker #5: Anything you can say on that? I mean, is that a sort of potential pipeline expansion opportunity?

Speaker #3: Yeah, it's really kind of an opportunity for us to think about a line extension and gives us some opportunities for our pipeline. Too early right now to comment on it.

Donn Casale: Yeah, it's really an opportunity for us to think about a line extension and give us some opportunities for our pipeline. Too early right now to comment on it. But right now, it's an opportunity for us to think about line extension for the franchise.

Speaker #3: But right now, it's an opportunity for us to think about line extension for the franchise.

Lachlan Hanbury-Brown: Got it. Thanks.

Speaker #5: Got it. Thanks.

Operator: Thank you. This concludes our question and answer session and also today's conference call. Thank you for participating, and you may now disconnect.