It’s probably safe to say Pear Therapeutics has had a meteoric rise in medtech. Key pieces, such as a new reimbursement code and favorable market conditions for a special purpose acquisition corporation merger, have fallen into place for the prescription digital therapeutics (PDT) company.
Now those key pieces have contributed to a strong earnings quarter for Pear. The nine-year-old company said the 4Q21 revenue was $1.3 million, putting 2021 sales at $4.2 million above guidance of $4 million. The firm also ended the year (2021) with $170 million in cash.
“We believe we've shown strong execution so far as a public company, just as we did as a private company,” Pear CFO Chris Guiffre said, according to a Seeking Alpha transcript of the call. “Our track record of execution in 2021 allowed us to meet our revenue guidance for the year while building the capability to excel in 2022 and beyond.”
Pear has three FDA-cleared prescription digital therapeutic (PDT) products - reSET and reSET-O, and Somryst – but there are other products on the horizon, said Marie Thibault, an analyst with BTIG and former managing editor of MD+DI.
“Pear continues to eye a label expansion into alcohol use disorder (AUD), a separate major depressive disorder (MDD) pipeline candidate, and has a collaboration agreement to develop a Japan-focused digital therapeutic for the treatment of sleep/wake disorders,” Thibault wrote in research notes.
She added, “We think management credibility and commercial execution are key parts of an investment in Pear at this relatively early stage of the company's development, so we applaud this straightforward earnings report and reaffirmed its 2022 outlook.”
PDTs are the latest and hottest trend in medtech. Like traditional medicines, PDTs are developed in a GMP-compliant environment, tested in randomized controlled trials demonstrating safety and efficacy, evaluated, and authorized by regulators like the FDA, and used under the supervision of a prescribing clinician.
Unlike traditional medicines, PDTs are software applications and are designed to collect real-world data for use by prescribing clinicians and by payors and health systems for population health management.
During the company’s earnings call, Guiffre spoke about the PDT market’s growth potential.
“After the year we had in 2021, Pear and the entire PDT category are poised for growth,” Guiffte said, according to a Seeking Alpha transcript of the call. “In fact, we believe that PDTs today have similarities with continuous glucose monitors, telehealth, liquid biopsies, and monoclonal antibodies immediately prior to their massive commercial expansions. Those technologies were new and transformational, just like PDTs. As novel product classes, reimbursement was unlocked by real-world evidence and the establishment of bespoke billing and coding mechanisms.
He added, “Today, those healthcare technologies are commercial success stories with broad coverage from commercial and government payers. We believe that PDTs have the potential to transition from novelty to ubiquity and it is parents’ privilege to lead that charge.”