Another player in the prescription digital therapeutics (PDT) market is facing layoffs. Better Therapeutics said it was letting go 35% of its staff in a filing with the Securities Exchange Commission.
The San Francisco, CA-based company is developing BT-001, a PDT that delivers a novel form of cognitive behavioral therapy to patients with uncontrolled type 2 diabetes.
PDT’s are software applications that are prescribed by a licensed healthcare practitioner who is legally authorized to prescribe medications and devices in the states in which they practice.
Better Therapeutic’s CEO, Frank Karbe, wrote a letter to employees addressing layoffs, according to an excerpt from the letter, according to an SEC filing.
“Today was a painful day,” Karbe wrote in the letter, according to an SEC filing. “I announced earlier we are taking several actions to ensure the long-term success of our company. Sadly, these actions included a reduction in force impacting approximately 35% of our colleagues. Layoffs are devastating for everyone. As CEO, I take responsibility. While this does not ease the pain, I recognize today was an extremely difficult day. We built this company on the foundations of transparency and trust, so it is important I share the background for these decisions. Above all, I am sorry it has come to this.”
The company is on the cusp of potentially securing an FDA nod for BT-001.
“We are at a critical moment in our evolution as we look ahead to potential FDA marketing authorization and the transition from an R&D focused company to one that expects to have a commercial product in the market,” wrote in a letter according to an SEC filing.
Better Therapeutics is the second PDT-focused company to announce layoffs. Pear Therapeutics, a favorite with analysts, was the first, announcing a round in July 2022 and another round in November.
Boston, MA-based Pear Therapeutics has developed PDT’s aimed at treating substance use disorder, opioid use disorder, and chronic insomnia.
Earlier this month, Pear took more extreme measures announcing it was exploring the potential for acquisition, company sale, merger, divestiture of assets, licensing or other strategic transactions, and additional financing.
Better Therapeutics was part of the Special Purpose Acquisition Corporation (SPAC) merger wave that took place in 2021. A SPAC is a company without commercial operations and is formed strictly to raise capital through an IPO for the purpose of acquiring or merging with an existing company, according to Investopedia. Better Therapeutics merged with Mountain Crest Acquisition Corp. II. And raised $110 million in the process.
Interestingly enough, Pear Therapeutics also went through a SPAC. The firm announced in June of 2021 that it entered into a definitive business combination agreement with Thimble Point Acquisition Corp.
(Editor’s Note: Better Therapeutics’ Chariman and Co-founder David Perry was featured on Episode 21, Season 1 of Let’s Talk Medtech in 2021. )