Neffy’s FDA Approval Rejected, Sends ARS Pharmaceuticals Stock Plunging
Key takeaways
- ARS Pharmaceuticals has failed to get FDA approval for its groundbreaking new allergic reaction drug
- The surprise rejection comes as the FDA asked for more evidence around its repeat dosage data
- ARS’ share price plummeted 56% at the news to a record low
ARS Pharmaceuticals suffered a significant setback this week because of its needle-free EpiPen alternative, a nasal spray named Neffy, which was rejected by the Food and Drug Administration (FDA).
Even though the pharmaceutical company said it would appeal the decision, the damage has been done. The surprise verdict has sent ARS’ stock price plunging. We reckon EpiPen’s maker, Viatris, is a little relieved.
Let’s get into the details of why the FDA went with its surprise decision and how bad Wall Street’s reaction was.
What happened with Neffy’s FDA approval?
The FDA has rejected a revolutionary new allergic reaction drug that comes as a nasal spray. Neffy, produced by ARS Pharmaceuticals, was rejected because the FDA wanted more data on its repeat spray dosing. ARS had previously told the FDA it could give it that data once the drug was on the market.
Neffy was seen as a viable alternative to EpiPen and Auvi-Q, which both use needles to inject epinephrine into patients suffering a severe allergic reaction. ARS submitted an application based on the company’s trials of healthy patients suffering a rhinitis attack, with the spray apparently showing comparable results to the injectables.
EpiPen maker Viatris petitioned the FDA in June that ARS should conduct more trials that mimic real-world conditions. There’s no saying for sure whether that impacted the regulatory body’s final decision, but it’s logical to assume that it was a factor — especially since Neffy hasn’t been tested in anaphylaxis, which is life-threatening.
ARS said it was “very surprised” at the FDA’s verdict and would appeal the decision. The pharmaceutical expects to re-submit its application in the first half of 2024, with an FDA decision due in the second half.
What was the market reaction?
Unfortunately for ARS, the biotech company’s share price fell off a cliff at the news. The stock plunged 56% to a record low of $2.78 during Wednesday trading. Conversely, Viatris’ share price rose 0.4% by Wednesday’s close.
The share price suffered such a dramatic fall because it was considered a real head-scratcher from investors as to why Neffy had been rejected. Months ago, a committee of outside advisors to the FDA had supported Neffy’s approval without the additional study on repeat dosages needed.
ARS’ CEO, Richard Lowenthal, reaffirmed Neffy’s groundbreaking potential in a statement. “If approved, neffy would represent the first-ever needle-free nasal spray epinephrine treatment for people with severe allergic reactions that has been shown to be more easily carried and administered, without anxiety or hesitation, which is critical to stopping disease progression,” Lowenthal said.
The bottom line
The shock result from the FDA has sent ARS’ stock price plunging. ARS is likely fuming at the result, not only because it thought repeat dosage data would be a post-marketing requirement as agreed, but because its would-be rival Viatris has also petitioned the FDA on its approval.
