ARS Pharmaceuticals, Inc. (SPRY): A Bull Case Theory

We came across a bullish thesis on ARS Pharmaceuticals, Inc. on Value Degen’s Substack’s Substack by Unemployed Value Degen. In this article, we will summarize the bulls’ thesis on SPRY. ARS Pharmaceuticals, Inc.'s share was trading at $10.15 as of September 11th.

ARS Pharmaceuticals (ARS) is positioned in the epinephrine delivery market with its nasal spray, Neffy, supported by a portfolio of patents covering composition, formulation, dosage, delivery devices, and absorption-enhancing companion drugs, with protections extending to 2039. These patents are currently under legal attack by Lupin, a top-10 global generic manufacturer, seeking to produce a generic version. While the outcome of the lawsuit is uncertain, the litigation triggers an automatic 30-month delay on generic competition, effectively shielding Neffy through this period. Historical data suggests generics succeed in infringement cases about 45% of the time, but ARS’s eight interlocking patents and substantial cash reserves provide a strong defensive position.

A potential settlement could bring generic entry in 2030, but the company is well-capitalized to contest.Insurance coverage for Neffy is expanding, currently at 60% and expected to reach 80% by the end of 2025, which supports adoption despite pricing. The second competitive threat is Aquestive Therapeutics’ (AQST) dissolving mouth film, Anaphylm, which has an FDA approval probability of roughly 80%, potentially entering the market in early 2026. Anaphylm appears faster-acting than Neffy based on limited data (12 vs. 18 minutes), though Neffy benefits from a first responder-friendly nasal delivery, whereas mouth films face challenges in vomiting scenarios.

SPR’s management has a strong track record, having captured 95% of the Narcan market previously, but current adoption of Neffy is slower, around 5%, reflecting a more competitive environment. Brand awareness stands at 49%, with international licensing in place, giving SPRY a head start. While SPRY retains a market advantage and growth potential, competition from AQST and the uncertain patent litigation outcome make the risk/reward less certain, suggesting a cautious approach to position sizing.

Previously we covered a bullish thesis on ARS Pharmaceuticals (SPRY) by Unemployed Value Degen in September 2024, which highlighted the FDA approval of Neffy, its needle-free epinephrine nasal spray, and its potential to capture a large portion of the EpiPen market. The company's stock price has depreciated approximately by 10.65% since our coverage. The thesis still stands as patent protection, first-mover advantage, and strong management support long-term growth. The new thesis shares a similar perspective but emphasizes patent litigation, generic competition, and emerging competitors like AQST.

ARS Pharmaceuticals, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held SPRY at the end of the first quarter which was 28 in the previous quarter. While we acknowledge the potential of SPRY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.