Better Therapeutics lays off staff, considers winding down business
Dive Brief:
Better Therapeutics is laying off its employees and looking into strategic alternatives including winding down the business, the digital therapeutic developer said Thursday.
The company received authorization for a Type 2 diabetes treatment app last year but, like some other developers of digital therapeutics, has struggled for money. The company did not return MedTech Dive’s request for comment on how many employees would be affected by the decision and when the layoffs would occur.
With its cash reserves running low, Better Therapeutics has asked Nasdaq to delist its stock. The action comes 11 months after Pear Therapeutics, another digital therapeutic company, filed for bankruptcy.
Dive Insight:
Better Therapeutics ended September with $6.6 million in cash, a sum it told investors would keep it going into the first quarter of 2024. In the filing, it also reported an accumulated deficit of $134.3 million.
The company took steps to stretch its cash runway in November. By negotiating a change to its debt deal and cutting costs, Better Therapeutics said it had bought time to “demonstrate commercial traction” for its lead diabetes product, Aspyrerx.
Better Therapeutics identified locations with the “highest concentration of high-volume targeted providers” to develop a targeted commercialization strategy, chief commercial officer Diane Gomez-Thinnes said on an earnings call in November, but lacked time to execute the plan.
The company launched Aspyrerx in October and did not expect to generate any revenue in 2023. With its share price bouncing around 20 cents over the past six months, Better Therapeutics was in a poor position to raise money from investors to buy more time to deliver the plan to grow sales of Aspyrerx.
Developers of digital therapeutics have found commercialization challenging. Pear, a pioneer in the field, failed to meet its revenue goals. Pear’s financial problems led to a bankruptcy filing and auction, selling its assets for $6 million.
Better Therapeutics is considering options “including assignment for the benefit of creditors and/or a wind-down of the company” but is yet to finalize a plan.
Whatever is next, the company will face it without its employees. Better Therapeutics ended 2022 with 54 employees but laid off 35% of its staffers in March 2023 to cut costs. The latest notice states the company “is terminating its employees.”
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