If unable to complete a transaction, the company may have to seek reorganization, liquidation, or other restructuring.

Katie Hobbins, Managing Editor

March 17, 2023

2 Min Read
Financial decrease
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Pear Therapeutics, a developer of prescription digital therapeutics (PDT), is now exploring potential for acquisition, company sale, merger, divestiture of assets, licensing or other strategic transactions and additional financing.

The announcement comes after two rounds of layoffs for the company in 2022. In July 2022, Pear cut 9% of its full-time workforce in a restructuring effort to reduce operating expenses by about $28 million over 18 months. However, in November of that same year, another round of layoffs hit Pear’s employees, cutting an additional 22% of its staff.

While the company has three PDTs on the market — app-based treatments for insomnia, substance use disorder, and opioid use disorder — insurance reimbursement for this type of treatment has been long road. BTIG analysts have routinely called the company a trailblazer in PDTs but noted that access agreements and Medicaid coverage would be key to its success. As such, Pear has mostly worked with state Medicaid agencies for coverage of its app-based treatments.

“The novel nature of PDTs means broad coverage is expected to be secured gradually,” Marie Thibault, an analyst with BTIG, wrote in previous research notes. “Existing prescribers, repeat users, and clinical data are all supporting more acceptance of and payment for Pear’s PDTs. For now, we think access agreements and state Medicaid coverage wins will be most important for Pear's near-term revenue."

The slow road to acceptance through commercial and government payers resulted in the company lowering its revenue forecast for 2022 to $14 million - $16 million. And with today’s announcement, it seems like coverage adoption hasn’t come fast enough.

Pear is in the process of exploring strategic alternatives to maximize shareholder value, according to a press release, and if unable to complete a transaction, the company reported that it may be required to seek reorganization, liquidation, or other restructuring. As part of the process, Pear has partnered with MTS Health Partners LP to as an exclusive financial advisor to assist in evaluating potential alternatives.

“There is no set timetable for this process and there can be no assurance that this process will result in the company pursuing a transaction or that any transaction, if pursued, will be completed on attractive terms,” the company press release said. “The company does not expect to disclose or provide an update concerning developments related to this process unless or until the company’s board of directors has approved a definitive course of action or otherwise determines that other disclosure is necessary or appropriate.”

About the Author(s)

Katie Hobbins

Managing Editor, MD+DI

Katie Hobbins is managing editor for MD+DI and joined the team in July 2022. She boasts multiple previous editorial roles in print and multimedia medical journalism, including dermatology, medical aesthetics, and pediatric medicine. She graduated from Cleveland State University in 2018 with a bachelor's degree in journalism and promotional communications. She enjoys yoga, hand embroidery, and anything DIY. You can reach her at [email protected].

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