Dermtech Files Chapter 11 Bankruptcy, Cuts 15 Employees

Dermtech, a skin cancer diagnostic company, recently announced it has filed for Chapter 11 bankruptcy after months of looking for strategic alternatives. Additionally, the news comes in tandem with the company’s decision to lay off 15 employees — about 20% of its remaining staff and enter into retention agreements with four senior leaders, including CEO Bret Christensen. As part of the agreement, Dermtech will pay the executives one-time cash retention awards of up to $510,000.

The dermatology company, which makes a skin patch to test for melanoma, has been wading through increasingly choppy waters. After its product failed to take off commercially — having a reported test revenue in 2023 of $14.4 million with operating expenses topping $104 million, the company saw stacking costs related to R&D, reimbursement challenges, and facility leases.

Failing to raise money late in 2023, according to the Chapter 11 filing, Dermtech began exploring strategic alternatives in January 2024 and later hired a restructuring advisor. In the weeks following, the company announced it would layoff 100 of its employees — 56% of its workforce at the time.

Through filing Chapter 11, the company said it will “safeguard the interest of stakeholders and maximize the value of its assets,” through “conducting a process to sell substantially all of its assets,” while continuing its laboratory operations and processing orders for the melanoma test.