The U.S. health regulator has declined to approve a nasal spray that would have been the first needle-free emergency treatment for allergic reactions, a surprise decision that sent shares of its developer ARS Pharmaceuticals down 47% premarket.

The rejection and request for additional testing sharply contrasts the backing from the U.S. Food and Drug Administration's (FDA) independent experts for the spray, neffy, in May.

The FDA has asked for a repeat-dose study of the treatment versus a rival injected product before a potential approval, ARS Pharma said late on Tuesday, rather than after as was mutually agreed in August.

The company said it was "very surprised" and will appeal the decision.

"Regulators look to be holding neffy to a much higher standard than comparable products," said William Blair analyst Tim Lugo, adding regulatory risks look difficult to assess currently.

EpiPen-maker Viatris had in June petitioned the FDA to require that ARS conduct more trials that closely mimic real-world conditions.

Neffy is seen as an alternative to EpiPen and other autoinjectors like Sanofi's Auvi-Q that are filled with epinephrine, a life-saving drug used by people at risk of anaphylaxis and other allergic reactions.

"As the mom of a child with multiple food allergies, I am disappointed by the decision and the continued limitations it places on food allergy sufferers to manage this ever-present disease," said Stacey Saiontz, a parent.

ARS' application was based on trials in healthy patients and those having a rhinitis attack, with the spray showing a comparable response to injectable products.

It did not test neffy in anaphylaxis, a severe, life-threatening allergic reaction, due to ethical concerns.

The lack of tests in people with anaphylaxis was one of the biggest concerns, said James Tarbox, an allergist at Texas Tech University Health Sciences Center.

ARS expects to re-submit its application in the first half of 2024, with an FDA decision likely in the second half. Its shares were down at $3.54 in premarket trade on Wednesday.