Biofourmis Cuts 120 Jobs Worldwide, Including 48 in US
26 Jul 2023
Biofourmis, an AI remote monitoring and digital therapeutics company, recently confirmed it has laid off 120 employees across multiple nations, including 48 employees in the United States. The company reported that most of the roles effected were operational and administrative.
Biofourmis said the layoff decision came down to a goal of reducing operational and administrative overhead expenses to invest in commercialization efforts and ongoing product development focused on the US market. The layoff’s themselves come a year after the company obtained $300 million in Series D funding, bring its value to $1.3 billion. A few months later, it also added another $20 million to the funding round.
Biofourmis also spent early-2023 announcing collaboration agreements. In January, it announced a multi-year agreement with Orlando Health, based in Florida, to support the hospitals Hospital-at-Home program through the company’s product offerings. One month later in February, the company announced a four-year collaboration with Augusta University Health, based in Georgia, to expand its Virtual Care at Home program.
The layoff news follows the late-2022 through 2023 trend of choppy waters in the digital therapeutics space.
In late March, Better Therapeutics, a prescription digital therapeutics (PDT) company focused on type 2 diabetes, announced it was laying off 35% of its staff in a bid to ensure long-term company success ahead of potential market authorization for BT-001, later known as AspyreRx.
“We are at a critical moment in our evolution as we look ahead to potential FDA marketing authorization and the transition from an R&D focused company to one that expects to have a commercial product in the market,” wrote in a letter at the time of the layoffs, according to an SEC filing.
Thankfully, the company saw its gamble pay off this month with the FDA authorization of AspyreRx. Of note, the company’s still in discussions with payers about reimbursement.
Reimbursement struggles were a large reason for another digital therapeutic company’s unfortunate downfall in early 2023.
PDT trailblazer Pear Therapeutics first began pruning its workforce in July 2022, letting go of about 25 employees, or 9% of the company’s full-time workforce. A few months later, Pear cut another 22% of its workforce in a round of layoffs that impacted about 59 employees. In March 2023, the company withdrew its financial forecasts and announced it would explore other strategic alternatives or a sale following steadily mounting costs and unsatisfactory revenue reports. It was only a few weeks later that Pear announced it had filed for Chapter 11.
After filing for bankruptcy, Pear CEO Corey McCann shared in a LinkedIn post that the company’s difficulties could be attributed to insurer’s reluctance to cover 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.”
The company’s assets were later split between four bidders in an auction totaling $6.05 million.
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