Milestone Pharma Secures FDA Approval for CARDAMYST, Clearing Regulatory Hurdle but Amplifying Execution Risk

What happened

Milestone Pharmaceuticals has received FDA approval for CARDAMYST (etripamil), the first self-administered nasal spray for adults with paroxysmal supraventricular tachycardia (PSVT), addressing a key unmet need after over 30 years. This approval resolves the March 2025 Complete Response Letter, which focused solely on chemistry, manufacturing, and controls issues like nitrosamine impurities and third-party site inspections, with no clinical efficacy or safety concerns raised. The company now faces the critical task of launching this novel therapy into a market of over 2 million potential patients, leveraging its Phase 3 data showing rapid symptom relief. However, Milestone remains pre-revenue with a shareholders' deficit of $17.7 million and $55.2 million in senior secured convertible notes as of June 2025, raising concerns about financial sustainability. Investors must now scrutinize whether the well-capitalized launch can overcome commercialization challenges, including physician adoption, payer reimbursement, and competition from established ER treatments and catheter ablation.

Implication

The approval validates etripamil's clinical utility and opens a new revenue stream for Milestone, potentially driving growth if market adoption is strong. However, success hinges on executing a targeted launch amid entrenched standards of care, such as ER-based adenosine and rising ablation use, which could limit uptake. Financial health is precarious due to the shareholders' deficit and convertible notes, requiring careful capital management to avoid dilution from future financings. Payer dynamics and reimbursement hurdles add complexity, as at-home therapy may face resistance compared to hospital-administered options. Long-term value depends on expanding into adjacent indications like atrial fibrillation and managing operational costs while navigating competitive and regulatory tailwinds.

Thesis delta

The previous thesis centered on binary regulatory risk from the March 2025 CRL; FDA approval eliminates this uncertainty, shifting the investment case from a speculative HOLD to a more constructive but still cautious stance. Emphasis now moves to execution risk, including launch effectiveness, market penetration, and financial stability, with dilution and competition as key watchpoints. Investors should monitor quarterly cash flows, commercialization metrics, and any updates on debt management to assess if the stance warrants further adjustment.