Welt Bio-Molecular Pharmaceutical

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.”

Assets of prescription digital therapeutics maker Pear Therapeutics have been broken up and sold at auction for $6.05 million after the company filed for bankruptcy in April. According to the court filing, Pear's assets were split between four bidders: Digital therapeutics company Click Therapeutics, Harvest BIO, sleep tech company Nox Health Group and health technology company Welt. The largest bid of the group came from Nox Health, who'll obtain Pear's assets related to Somryst, which uses cognitive behavioral therapy for insomnia to train the brain and body to sleep. Nox will pay $3.9 million for the assets. Harvest Bio was the successful bidder of Pear's Invention Science Fund (ISF) licenses and patents as well as its assets related to schizophrenia, multiple sclerosis and depression, major depressive disorder and other pipeline assets. Harvest also successfully purchased Pear's corporate trademarks, PearConnect, reSET and reSET-O assets. Harvest purchased Pear's assets for an aggregate purchase price of $2.03 million. Click Therapeutics bid $70,000 for all Pear's platform patents, excluding those related to the ISF assets, and Welt agreed to purchase Pear's migraine-related assets for $50,000. THE LARGER TREND The company hit the public markets in late 2021 through a merger with a special purpose acquisition company, then a popular method of public exit for digital health firms. But the company's stock price has generally declined since then. In March, Pear announced it was exploring "strategic alternatives," including a possible company sale, merger or acquisition. In a filing with the Securities and Exchange Commission, Pear withdrew its revenue and operating guidance for fiscal 2022 and 2023 and announced it wouldn't hold a fourth quarter and full-year earnings call. Last month, Pear filed for Chapter 11 bankruptcy and announced it was seeking a sale of its business or assets but would continue its scaled-down operations during Chapter 11 as it sought a sale, and Pear would use its available cash to fund its operations and costs post-petition. The Boston-based company's CEO Corey McCann referenced the filing on LinkedIn, stating, "Today is a difficult day for Pear Therapeutics. We announced that Pear voluntarily filed for Chapter 11 and will seek to sell assets through a sales process. We also announced a reduction in force, including me. This is certainly not the outcome I envisioned when I founded Pear in 2013."

Pear Therapeutics' once-high-flying assets were split between fellow digital therapeutics maker Click and three other buyers in Thursday’s auction, according to a court filing; their purchases still have to be approved in a hearing scheduled for Monday. Less than two years after Pear Therapeutics went public in a SPAC deal worth $1.6 billion—which in turn came after the digital therapeutics maker had raised more than $400 million in venture capital—its assets were sold in an auction this week for just over $6 million. In its decade-long lifetime, Pear had developed a range of apps that were designed to help treat addiction, insomnia, PTSD, chronic pain, irritable bowel syndrome and more. In 2017, its substance use disorder program, reSET, became the first-ever digital therapeutic to receive FDA clearance. Those once-high-flying assets were split between four bidders in Thursday’s auction, according to a court filing (PDF); their purchases still have to be approved in a hearing scheduled for Monday. Stat was first to report the news of Thursday’s auction. Click Therapeutics—itself a developer of apps to help treat migraine, smoking cessation, depression and more—offered $70,000 for the patents behind the Pear Platform for digital therapeutic development, sans those related to the company’s Invention Science Fund, or ISF. The ISF licenses and patents went to Harvest Bio, which also won the bids for Pear’s assets related to schizophrenia, multiple sclerosis, depression and other pipeline projects as well as its corporate trademarks, its PearConnect commercial platform and the rights to the reSET and opioid-specific reSET-O programs, all for a total of $2.03 million. Sleep-focused company Nox Health Group offered the largest bid of the group—$3.9 million—solely to acquire the assets related to Somryst, Pear’s FDA-cleared insomnia treatment, while digital health maker Welt doled out $50,000 for Pear’s migraine-focused program. Pear was set to be sliced up and put on the market after it filed for bankruptcy last month following a rocky tenure as a publicly traded company that included multiple waves of layoffs and steadily mounting costs. In 2021, Pear recorded expenses of nearly $110 million but revenues of only $4.2 million. Though it kicked off 2022 with dreams of quadrupling its revenues, by the time its third-quarter earnings report went live last fall, the company had slashed those forecasts almost in half and seen its yearly expenses already surpass the $100 million mark. Ultimately, according to its 2022 annual report, Pear raked in revenues of about $12.7 million while racking up total expenses of more than $136 million for the year. Despite its optimism in late 2022 that 2023 would bring revenues of more than $27 million, as its sales continued to underperform, in March of this year Pear withdrew its previous financial forecasts and announced that it would be exploring a sale or other “strategic alternative” to stanch the hemorrhaging funds. Just a month later, however, Pear filed for Chapter 11 bankruptcy. Along with making plans to auction off its assets, the company also laid off more than 90% of its remaining employees. In a LinkedIn post shared the day of the bankruptcy announcement, Pear CEO Corey McCann attributed the difficulties that many digital therapeutics makers are facing to insurers’ reluctance to cover the technology. “We’ve shown that clinicians will readily prescribe PDTs. 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,” he wrote. “But that isn’t enough. Payors have the ability to deny payment for therapies that are clinically necessary, effective and cost-saving,” McCann continued, adding that “market conditions over the last two years have challenged many growth-stage companies, including us.”