SPRY Plunges 9.02% Amid Legal Storm—What’s Next for ARS Pharmaceuticals?

Summary
• SPRY’s stock nosedives 8.94% intraday, hitting a 52-week low of $10.98
• Paragraph IV notice from Lupin triggers legal uncertainty over neffy’s patent protection
• RSI at 21.91 signals oversold conditions, but bearish momentum dominates
• Options chain shows heightened volatility, with 2025-12-19 puts and calls attracting heavy turnover

ARS Pharmaceuticals (SPRY) is under siege as its shares collapse 9.02% to $11.70, trading near the 52-week low of $10. The selloff follows a Paragraph IV notice from Lupin Inc., which threatens to launch a generic version of neffy. Technical indicators and options data suggest a volatile near-term outlook, with investors bracing for a legal showdown and regulatory risks.

Paragraph IV Notice Sparks Legal Uncertainty
The collapse in SPRY’s stock is directly tied to the Paragraph IV notice from Lupin Inc., which filed an ANDA seeking approval for a generic version of neffy. This triggers a 45-day window for ARS to sue for patent infringement, with the FDA barred from approving Lupin’s application for up to 30 months if litigation ensues. The move has rattled investors, who now face uncertainty over neffy’s exclusivity and potential revenue erosion. Compounding the issue, SPRY’s recent earnings report—while beating revenue estimates—showed a 9.62% weekly decline, reflecting broader market skepticism about its ability to defend its IP and maintain pricing power.

Biotech Sector Mixed as AMGN Gains, SPRY Falters
While the biotech sector remains volatile, Amgen (AMGN) stands out with a 0.5% intraday gain, contrasting SPRY’s collapse. AMGN’s resilience underscores the sector’s bifurcation: large-cap innovators with diversified pipelines outperform smaller peers facing regulatory or competitive risks. SPRY’s struggles highlight the fragility of niche biotech plays reliant on single-product revenue streams, particularly in crowded therapeutic areas like allergy treatments.

Options and ETF Plays for a Volatile Biotech Battle
• 200-day MA: 13.93 (below current price)
• RSI: 21.91 (oversold)
• MACD: -1.03 (bearish divergence)
• Bollinger Bands: Price at 11.77, near lower band (11.88)

SPRY’s technicals suggest a short-term oversold condition, but bearish momentum remains intact. Key support levels at $11.88 (lower Bollinger Band) and $10.98 (intraday low) could trigger further declines if breached. The 30-day MA at 17.91 and 200-day MA at 14.43 offer potential resistance, but the stock lacks immediate catalysts for a rebound. No leveraged ETF data is available, but sector rotation into AMGN or broader biotech ETFs could offer safer alternatives.

Top Options Contracts:
• SPRY20251219P12.5 (Put):
- Strike: $12.50
- Expiration: 2025-12-19
- IV: 69.40% (high volatility)
- Leverage Ratio: 5.30%
- Delta: -0.482 (moderate sensitivity)
- Theta: -0.005013 (slow time decay)
- Gamma: 0.0886 (responsive to price swings)
- Turnover: 440,000
- Payoff (5% downside): $0.625 per share
- Why: High IV and gamma make this put ideal for a bearish bet, with liquidity to enter/exit. A 5% drop to $11.18 would yield ~5% return on the put.
• SPRY20251219C12.5 (Call):
- Strike: $12.50
- IV: 65.05%
- Leverage Ratio: 8.32%
- Delta: 0.509 (moderate directional bias)
- Theta: -0.009133 (moderate decay)
- Gamma: 0.0946 (high sensitivity)
- Turnover: 281,600
- Payoff (5% downside): $0.00 (out of the money)
- Why: While the call is at-the-money, its high gamma and IV make it a speculative play if the stock rallies post-litigation. However, a 5% drop would nullify its value.

Trading Outlook: Aggressive bears should prioritize the SPRY20251219P12.5 put for a 5% downside scenario. Bulls may consider the call only if the stock breaks above $12.50, but the bearish technicals and legal risks make this a high-risk trade.

Backtest ARS Pharmaceuticals Stock Performance
Below is an interactive back-test dashboard that details the strategy’s logic, conditions and key performance statistics. (If the module does not render automatically, please refresh the page.)Key take-aways (concise):• Sample period: 2020-01-02 – 2025-08-28. • Total return: 95.9 %, annualized ≈ 24.9 %. • Average trade: +2.15 % (wins avg +12.3 %, losses avg -6.4 %). • Max drawdown: 59.3 %. • Risk setting: positions automatically closed after 5 trading days (no stop-loss / take-profit specified).Let me know if you’d like to adjust thresholds, add stop-loss/take-profit rules, or explore different holding periods!

Legal Outcome and Conference Participation Will Define Next Move
SPRY’s near-term trajectory hinges on the outcome of its patent litigation with Lupin and its upcoming investor conference participation in September. A successful lawsuit could stabilize the stock, while a loss would likely accelerate the selloff. Investors should monitor the 2025-12-19 options expiration for liquidity clues and watch for a breakdown below $10.98. Meanwhile, Amgen’s 0.5% gain highlights the sector’s divergence, with larger players outperforming. For now, the put options and short-term bearish bias remain the most compelling plays. Watch for $10.98 breakdown or regulatory reaction.