Pear Therapeutics' Four-Way Slice
22 May 2023
Pear Therapeutics’ assets have now been split between four bidders in a recent auction totaling $6.05 million, a drop in the bucket of the company’s reported $32 million debt.
The company’s four-way slice comes after it filed for bankruptcy following multiple waves of layoffs, steadily mounting costs, and unsatisfactory revenue reports. In Pear’s 2022 annual report, it saw revenues of about $12.7 million with expenses totaling more than $136 million for the year. While the company came into 2023 with optimism that it would bring revenues of more than $27 million, sales continued to underperform. In March, the company withdrew its financial forecasts and announced it would explore other strategic alternatives or a sale.
After the company filed for Chapter 11, Pear CEO Corey McCann shared in a LinkedIn post that the company’s difficulties could be attributed to insurer’s reluctance to cover prescription digital therapeutics (PDTs).
“We’ve shown that clinicians will readily prescribe PDTs,” he wrote. “We’ve shown that patients will engage with the products. We’ve shown that our products can improve clinical outcomes. We’ve shown that our products can save payors money. Most importantly, we’ve shown that our products can truly help patients and their clinicians. But that isn’t enough. Payors have the ability to deny payment for therapies that are clinically necessary, effective, and cost-saving.”
While purchases still must be approved in a hearing scheduled today, Click Therapeutics, an app developer focusing on the treatment of migraines, smoking cessation, depression, and more, has offered $70,000 for the patents behind the Pear Platform for digital therapeutic development. The offer does not include patents related to the company’s Invention Science Fund (ISF).
Harvest Bio won the bidding for the ISF licenses and patents in addition to bids for Pear’s assets related to schizophrenia, multiple sclerosis, and depression, as well as other pipeline projects. Harvest came away from the auction with Pear’s corporate trademarks, its PearConnect commercial platform, and the rights to the reSET and opioid-specific reSET-O programs. In all, Harvest offered a total of $2.03 million for these items.
Nox Health Group offered the largest bid of the auction — $3.9 million — to acquire the assets related to Pear’s FDA-cleared Somryst insomnia treatment. Welt, a digital health company, offered the company $50,000 for its migraine-focused program.
Pear is not the only PDT company facing hardship. Better Therapeutics, which develops cognitive behavioral therapy to patients with uncontrolled type 2 diabetes, announced in late March that it would be letting go 35% of its staff, in what Frank Karbe, CEO of Better Therapeutics, said were one of several actions taken to ensure the long-term success of the company, according to an SEC filing.
“Today was a painful day,” Karbe wrote in a letter to employees addressing layoffs, according to an excerpt from the letter in an SEC filling. “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.”
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