ARS Pharmaceuticals sued as SPRY drops 24% on Caremark delay

ARS Pharmaceuticals faces a securities class action alleging executives misled investors on a July 1 CVS Caremark coverage date for neffy, after SPRY fell 23.9%.

"Corporate officers have a duty to ensure their companies' public statements are accurate and complete," Joseph E. Levi, founding partner at Levi & Korsinsky, said.

The complaint, filed in the Southern District of California, names co-founder and CEO Richard E. Lowenthal and Chief Commercial Officer Eric Karas. Management told investors a proposal removing prior authorization requirements was "in the final stages" with a July 1 effective date. No new formulary additions were issued in the July 1 cycle, and Caremark reserved its decision until January 2027.

SPRY closed at $10.54 on June 24 and fell to $8.02 the next session, a $2.52 per-share loss across roughly 99.3 million shares outstanding. Investors have until October 5 to seek lead plaintiff appointment.

The suit alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. Lowenthal, who served as co-founder, president, and CEO throughout the class period, stepped down as an employee and officer on July 7, roughly two weeks after the disclosure.

The complaint charges that both officers spoke publicly and repeatedly about the CVS Caremark formulary process, holding themselves out as having unique knowledge of it. Both are alleged to have possessed authority to control the content of press releases, earnings calls, and SEC reports, and to have addressed the formulary timeline directly on quarterly calls. The pleading asserts defendants knew or recklessly disregarded that the rigidity of Caremark's system could push any decision well past the summer cycle.

Section 20(a) permits claims against individuals alleged to have controlled a company that violated securities laws, exposing them to liability alongside the issuer. Multiple firms are soliciting investors, including Levi & Korsinsky, Pomerantz LLP, Schall Brown & Schwartz, and DJS Law Group. The class period runs from March 9 to June 24, 2026, and the case is governed by the Private Securities Litigation Reform Act of 1995.

CVS Caremark is one of the largest pharmacy benefit managers in the United States, and its formulary decisions directly affect patient access and prescription volumes. The delay pushes neffy's expanded coverage past two allergy seasons, a significant setback for ARS's commercialization of its lead product.

The failed coverage rollout removes neffy from the summer and back-to-school allergy seasons, a critical commercial window for the epinephrine nasal spray. Investors will watch for the court's lead plaintiff appointment and any further disclosure from ARS on Caremark's January 2027 decision.

This article is for informational purposes only and does not constitute investment advice.