ARS Pharmaceuticals shares jumped Monday after the biotech company inked a deal with ALK-Abello Pharmaceuticals to commercialize its allergic reaction nasal spray internationally.
The company's drug, Neffy, is the first nasal spray version of epinephrine. Epinephrine treats emergency allergic reactions like anaphylaxis. But it usually comes in an autoinjector.
Under the terms of the deal, ALK-Abello will pay ARS $145 million up front to sell Neffy outside the U.S., Australia, New Zealand, Japan and China. ARS will be eligible to receive up to $320 million in regulatory and commercial milestones, and tiered royalties in the teens on future net sales.
ARS Pharmaceuticals Eyes Large Epinephrine Market
The market for epinephrine in Europe and Canada — the second and third largest markets globally — is worth about $230 million combined, William Blair analyst Lachlan Hanbury-Brown said in a report. ALK-Abello believes Neffy has a peak potential of more than $400 million in the licensed territories.
"While this would represent a nice royalty stream to ARS, we believe this also highlights that ARS got a good deal here given the size of the up-front payment and ongoing economics," he said. "Moreover, we believe the significant boost to current cash balances should give the company additional flexibility to invest in the ongoing launch of Neffy in the United States."
On today's stock market, ARS Pharmaceuticals stock rose 2.6% to 17.49, pulling back from steeper premarket gains. The stock rose near a profit-taking zone after breaking out of a cup-with-handle base on Oct. 15. Shares are about 15% above their buy point at 15.22, according to MarketSurge.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
