Better Therapeutics cuts 35% of staff while awaiting digital therapeutic approval

Digital therapeutics company Better Therapeutics announced on Thursday that it’s cutting 35% of its staff as it awaits FDA clearance for its first product.

The company, which launched eight years ago, is one of a growing group of companies seeking a digital alternative to traditional medicine. The space saw a record $7.5 billion in investments in 2021, according to Chris Dokomajilar at DealForma, with uses spanning ADHD, PTSD and other indications. However, private insurers have been slow to hop on board.

Better Therapeutics’ lead candidate BT-001 uses nutritional cognitive behavioral therapy to help type 2 diabetes patients control their blood sugar. In other words, patients use a prescription-based mobile application to complete therapy lessons and skill-building modules designed to shift their behavior around diet and exercise. Pear Therapeutics, which announced it was exploring a sale or other strategic alternative last week, similarly makes use of cognitive behavioral therapy in its prescription digital therapeutics for substance and opioid use disorders.

Better Therapeutics went public in a 2021 SPAC merger and, this past July, announced BT-001 showed statistically significant decreases in A1c levels when administered alongside standard of care blood sugar lowering medications compared to a control group also receiving standard of care. The company expects an FDA decision this summer, according to a spokesperson, and has initiated a real-world evidence program to evaluate the software’s long-term efficacy in type 2 diabetes.

“The study is expected to generate evidence supporting payer coverage and reimbursement,” Better Therapeutics wrote in its latest earnings report.

Frank Karbe

CEO Frank Karbe said in an email to employees on Thursday that the company is at a “critical moment in our evolution” as it awaits word from regulators on BT-001. But as the company navigates “volatility and uncertainty in the markets, it has become clear that we need to take action to preserve our cash runway,” he added, noting long-term plans for expanding into other cardiometabolic diseases “remains unchanged.”

The company expects to incur roughly $400,000 in cash-based expenses related to severance and benefits in Q2 2023, according to an SEC filing. As of the latest update, Better had 44 employees at the end of 2021. This marks the latest in a long list of biotech layoffs, including at least three dozen companies this year.

“We acknowledge this is difficult news for our people and we will support everyone through this transition,” Karbe said in a statement to Endpoints News.

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