ARS Pharmaceuticals: Is neffy's Global Expansion and DTC Growth Justifying the Current Valuation?

In the competitive landscape of pharmaceutical innovation, ARS Pharmaceuticals (NASDAQ:SPRY) has positioned itself as a disruptor with its FDA-approved epinephrine nasal spray, neffy®. The company's aggressive direct-to-consumer (DTC) marketing and global expansion ambitions have driven revenue growth, but questions linger about whether its current valuation-trading at $8.85 as of November 2025-reflects sustainable scalability or overhyped optimism. This analysis evaluates the interplay between neffy's commercial traction, financial efficiency, and international market potential to determine if ARS Pharmaceuticals' valuation is justified.

DTC-Driven Growth: A Double-Edged Sword

ARS Pharmaceuticals' Q3 2025 results highlight the power of its DTC strategy. U.S. net product sales of neffy® surged to $31.3 million, accounting for 96% of total revenue, driven by a 2.5-fold increase in U.S. net product revenue compared to the prior quarter, according to a QuiverQuant report. This growth is underpinned by a dramatic rise in consumer awareness, which climbed from 20% to 56% year-to-date, and a 86% increase in healthcare provider prescriptions, now exceeding 18,000, as noted in a StockTitan analysis.

However, the cost of this success is stark. Selling, general, and administrative (SG&A) expenses ballooned to $74.8 million in Q3 2025, far outpacing revenue and contributing to a net loss of $51.2 million, according to the Investing.com earnings call transcript. While the company attributes these expenses to "heavy marketing investments to scale product adoption," as Finimize notes, the efficiency of DTC spending remains a critical concern. For every dollar in U.S. revenue, ARS spent nearly $2.40 on SG&A, raising questions about whether current marketing spend is a bridge to profitability or a drag on long-term margins.

Global Expansion: A High-Stakes Bet

ARS Pharmaceuticals' global ambitions are both its most promising and riskiest bet. Regulatory approvals in Japan, Canada, and China-key markets for allergy therapeutics-are now within reach. Japan granted approval in September 2025, with a Q4 2025 launch expected to generate early revenue. Canada and China approvals are slated for Q1 and H1 2026, respectively, with launches anticipated to contribute meaningfully to revenue in H2 2026, as noted in a William Blair analyst note.

The potential is vast. Japan's allergy market alone is projected to grow at 4% annually, while China's demand for fast-acting epinephrine alternatives is rising due to increasing allergy prevalence, according to a Marketscreener report. However, scaling in these markets will require significant capital. The company's $288.2 million cash reserve-bolstered by a $100 million term loan-provides a buffer, but analysts warn that global expansion costs could strain liquidity if revenue growth in the U.S. stalls.

Valuation: Undervalued or Overhyped?

Despite current losses, ARS Pharmaceuticals' valuation appears to hinge on future potential rather than present profitability. Analysts at William Blair and Raymond James have reaffirmed "Outperform" and "Strong Buy" ratings, citing neffy's clinical efficacy and commercial traction, as noted in the William Blair note. Price targets range from $32 to $40, implying a potential 260% upside from the November 2025 price of $8.85.

The company's balance sheet supports this optimism: $288.2 million in cash is expected to fund operations until cash-flow break-even, avoiding the need for dilutive equity financing, as noted in the StockTitan analysis. However, the path to profitability is not without hurdles. The $51.2 million Q3 net loss underscores the challenge of balancing aggressive marketing with financial discipline. If global expansion accelerates revenue growth in 2026 as projected, the current valuation could prove undervalued. Conversely, if international launches underperform or U.S. growth plateaus, the stock may face downward pressure.

Conclusion: A Calculated Gamble

ARS Pharmaceuticals' valuation reflects a high-stakes gamble on neffy's ability to dominate the epinephrine market through DTC innovation and global expansion. While the company's U.S. growth and regulatory progress in key international markets are compelling, the financial sustainability of its current strategy remains unproven. Investors must weigh the potential for exponential revenue growth against the risks of continued losses and high operational costs. For now, the stock appears to straddle the line between undervaluation and speculative hype-a position that could shift dramatically in 2026 as global launches unfold.