Will ARS Pharmaceuticals Be Pratik Shah’s Third Major Success

U.S. and Europe approve ARS Pharmaceuticals nasal spray to treat severe allergic reactions

(Photo: Pratik Shah, Chairperson, ARS Pharmaceuticals.)

August 31, 2024

Last week regulators in the European Union approved the use of an epinephrine nasal spray to treat severe allergic reactions, including those caused by food, medications, and insect bites. Earlier this month, the Food and Drug Administration approved use of the spray – called neffy in the United States - for adults and children, who weigh more than 30 kg (66 lbs.)

The spray is the first and only needle-free delivery of epinephrine for patients living with severe allergic reactions. It is made by San Diego, California, based ARS Pharmaceuticals which is “dedicated to the development of products to better protect patients from severe allergic reactions that could lead to (life-threatening) anaphylaxis.”

The nasal spray is “a treatment alternative that avoids the need to inject epinephrine with a needle, which can be fraught with anxiety and fear for many,” Richard Lowenthal, Co-Founder and Chief Executive of ARS said in a statement. “Epinephrine treatment is only effective if available, readily usable, and administered appropriately.”

For more than 35 years, patients suffering a severe allergic reaction, which can lead to anaphylaxis, have been treated by injecting epinephrine. There are approximately 40 million people in the U.S. who experience severe allergic reactions due to food, venom or insect stings. Of those, only 1.6 million carry an active epinephrine auto-injector, according to ARS.

Even if patients or caregivers carry an auto-injector, more than half either delay or do not administer the device when needed in an emergency. While epinephrine auto-injectors have been shown to be highly effective, there are well published limitations that result in many patients and caregivers delaying or not administering treatment in an emergency situation. These limitations include fear of the needle, lack of portability, needle-related safety concerns, lack of reliability, and complexity of the devices.

Patients suffering severe allergic reactions account for an estimated 500,000 emergency room (ER) visits each year in the U.S., with nearly 60% of such patients reported to not have received epinephrine prior to visiting the ER.

Following news of the approvals of the sale of the nasal spray in the U.S. and EU, ARS stock rose by roughly 30%, boosting the company’s market value to $1.3 billion. In fact, the stock has risen more than six-fold from its recent low. One of the major financial beneficiaries is Pratik Shah, Chairperson of the Board of Directors of ARS, who owns roughly $140 million of the company stock.

Shah, 54-years-old, is a serial entrepreneur in the pharmaceuticals business. He is the founder and CEO of Design Therapeutics, which seeks to restore health to patients with genetic disorders by harnessing their body’s own biology. The Carlsbad, California, company has a market value of $270 million.  

In 2023, Shah earned a base salary of $360,000. He owns 459,000 shares and options to purchase an additional 2.5 million shares of Design.

In 2018, he became chairperson of Synthorx, a biotechnology company developing innovative protein therapeutics for cancer and autoimmune disorders. It was acquired by Sanofi for $2.5 billion in 2020. Earlier, in 2007, Shah invested and took over as the chairperson of Auspex Pharmaceuticals, a company focused on the development and commercialization of novel medicines for people with movement disorders. In 2013, Shah took over as the CEO of Auspex. He listed the company on the Nasdaq stock exchange, oversaw its growth and sold it to Teva Pharmaceuticals for $3.5 billion in 2015.

From 2004 to 2014, Shah was a partner in the healthcare venture capital firm Thomas, McNerney & Partners. Prior to that, he co-founded two biotechnology companies and was a consultant at McKinsey & Company in San Francisco. Shah obtained his Ph.D. in biochemistry and molecular biology as well as an MBA in finance from the University of Chicago. Shah holds a B.S. in Biological Sciences from the University of California at Irvine.

Shah joined ARS’s Board of Directors in 2016 and was appointed Chair in 2018. At ARS, he appears to be pursuing a similar strategy as with his two previous major successes at Synthorx and Auspex: invest in a pharmaceutical startup with a strong research team, working on a product with good market potential, and guide the development, regulatory approval and sales of the drug. Will Shah help sell ARS to a major pharmaceutical company which has global distribution reach?

ARS expects its neffy nasal spray will make epinephrine more broadly available for use in emergencies—in schools, restaurants, airplanes, hotels, amusement parks, and in other areas where accidental exposures to allergens are possible.

The shelf life of neffy is 30 months. It will remain potent even if exposed to 122°F (50°C), making it an effective treatment if left in a car or outside for a length of time, according to ARS. Also, if accidentally frozen, neffy can be thawed and administered.

Starting in October, ARS plans to sell the spray in the U.S. and in Europe in the fourth quarter of this year. For U.S. patients, whose commercial health insurance will cover payment for the drug, the cost will be $25 for two single-use neffy devices, according to ARS. The company expects most U.S. commercial insurers to approve payment for the drug during the next six months. For patients without insurance coverage, the price will be $199.  

ARS notes that neffy has to be administered “with caution to patients who have heart disease,” Parkinson’s disease, diabetes, renal impairment, elderly patients, pregnant women and other medical conditions. Also, that patients with certain health conditions or who take medications for allergies, depression, thyroid disorders, diabetes, and hypertension, may be at greater risk for adverse reactions.

Adverse reactions to neffy may include throat irritation, headache, nasal discomfort, feeling jittery, fatigue, tremor, dizziness, nausea, and vomiting.

According to ARS, in clinical trials, adverse reactions to the neffy nasal spray “were generally mild in nature without any meaningful nasal irritation or pain, and no serious adverse events were reported in any clinical study.” Will wide usage of the spray by millions of patients confirm this finding?