Is ARS Pharmaceuticals (SPRY) Undervalued Amid Regulatory and Market Expansion Catalysts?

The question of whether ARS Pharmaceuticals (SPRY) is undervalued hinges on a delicate balance between its clinical progress, global market expansion, and financial sustainability. As the company navigates a pivotal phase in its development, investors must weigh the risks of unproven therapeutic applications against the transformative potential of its needle-free epinephrine technology.

Regulatory Progress: A Mixed Bag of Momentum and Uncertainty

ARS Pharmaceuticals has made notable strides in regulatory approvals, particularly with the December 2025 approval of neffy (epinephrine nasal spray) in China by the National Medical Products Administration (NMPA) according to company announcement. This marks the first approval of a needle-free epinephrine product in China for out-of-hospital use, unlocking access to a population of 50–100 million individuals at risk of severe allergic reactions. The approval is a testament to the company's ability to scale its technology beyond the U.S., where neffy has already demonstrated commercial viability.

However, the Phase 2b clinical trial (NCT06927999) for intranasal epinephrine in treating acute flares of chronic spontaneous urticaria remains a wildcard. While the trial is ongoing, as of December 2025, no interim results have been disclosed. This lack of data transparency raises questions about the timeline for potential regulatory milestones in this indication, which could either bolster or hinder the stock's valuation trajectory.

Global Market Expansion: A Strategic Catalyst

The company's global footprint is rapidly expanding. In addition to China, neffy received approval in Japan for anaphylaxis treatment in September 2025, with a commercial launch slated for Q4 2025. The European market is also in focus, with EURneffy® launched in the UK in October 2025 and regulatory review for the 1 mg dose underway at the European Medicines Agency (EMA), expected to conclude by mid-2026.

These expansions are critical for diversifying revenue streams and reducing reliance on the U.S. market, where neffy's net product revenue reached $31.3 million in Q3 2025. The Chinese and Japanese markets alone represent incremental billions in potential annual revenue, assuming successful commercialization. Yet, the company's ability to replicate its U.S. success in these regions will depend on payer coverage, pricing negotiations, and cultural adoption of nasal epinephrine over traditional auto-injectors.

Financials: Growth at a Cost

ARS Pharmaceuticals' financials reflect the duality of a high-growth biotech firm. In Q3 2025, the company reported $32.5 million in total revenue, driven by U.S. neffy sales. However, this growth came at a steep cost: a net loss of $51.2 million and SG&A expenses of $74.8 million, primarily attributed to marketing and commercial initiatives.

Despite these losses, the company's balance sheet remains robust, with $288.2 million in cash, cash equivalents, and short-term investments as of September 30, 2025. This liquidity, bolstered by a $100 million draw from a $250 million term loan facility, provides a runway to fund operations until cash-flow break-even. The challenge lies in converting this liquidity into sustainable profitability, a task complicated by the high burn rate and the need for continued investment in global expansion.

Valuation Analysis: A Case for Prudence

Analysts have recently revised their fair value estimate for SPRY downward to $28.67 per share, reflecting cautious sentiment about the company's path to profitability. This adjustment underscores the market's skepticism about ARS Pharmaceuticals' ability to monetize its regulatory wins without meaningful improvements in gross margins or cost control.

Yet, the company's valuation appears to discount its long-term potential. With neffy's clinical data demonstrating efficacy comparable to traditional epinephrine injections and a global market opportunity expanding into the billions, the current price-to-sales multiple of approximately 12x (based on $260 million in annualized U.S. revenue) suggests a conservative valuation relative to peers in the allergy and emergency care space.

Conclusion: A High-Risk, High-Reward Proposition

ARS Pharmaceuticals is neither clearly undervalued nor grossly overvalued. Its stock price reflects the inherent risks of a clinical-stage biotech firm-uncertain trial outcomes, high operating costs, and regulatory hurdles-while also pricing in the transformative potential of its global expansion. For investors with a long-term horizon and a tolerance for volatility, the company's strong cash position, innovative product, and expanding market access could justify the current valuation. However, those seeking near-term profitability may find the risks outweigh the rewards.

In the end, the answer to whether SPRY is undervalued depends on one's confidence in the company's ability to execute on its clinical and commercial roadmap. For now, the data suggests a stock poised for asymmetric upside-if it can navigate the next phase of its journey without missteps.