Dermtech Files Chapter 11 Bankruptcy, Cuts 15 Employees

The company started looking for strategic alternatives early this year and laid off 100 employees.

Katie Hobbins, Managing Editor

June 24, 2024

1 Min Read
Melanoma
Malikov Aleksandr / iStock / Getty Images Plus via Getty Images

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.

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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