Less than two years after joining the public markets to finance the commercialization of its FDA-cleared digital products, Pear Therapeutics is now joining the ranks of struggling companies exploring “strategic alternatives” that could involve a merger, licensing deal, or the sale of the business or its assets.
Pear said Friday that it has signed on with investment bank MTS Health Partners to serve as financial advisor in evaluating its various potential options. The company added that it does not expect to provide any updates about the process until the board of directors decides it is necessary to do so or it approves a definitive course of action.
Boston-based Pear has commercialized three prescription digital products, two for addiction disorders and one for treating chronic insomnia. The company began commercializing its addiction products just prior to the Covid-19 pandemic; its insomnia product launched in late 2020. These products depend on physicians to prescribe them to their patients. They also need insurance companies to cover them. While prescriptions and coverage have grown, “only a limited number of insurers have agreed to reimburse purchases of our products,” the company said in its third quarter 2022 financial report.
The commercialization struggles led Pear to implement a corporate restructuring last July, shaving headcount by 9% and saving about $28 million. Those cuts were not enough. Last November, Pear implemented another restructuring that cut 59 more employees, representing about 22% of its staff. In a November regulatory filingPear attributed the second round of cuts to “the worsening macroeconomic environment.” This restructuring was projected to lead to $10.7 million in annual savings in 2023.
Commercialization efforts are further hampered by the loss of a key employee. In late February, Chief Commercial Officer Julia Strandberg tendered her resignationeffective March 31. Last week, health tech company Royal Philips announced the appointment of Strandberg as the chief business leader of its connected care business.
At the time of Pear’s second restructuring announcement, the company said it expected 2023 revenue would be in the range of $27 million and $37 million and more details would be forthcoming when it discussed its full-year 2022 financial results in March. Those projections are no longer certain. In a Friday regulatory filingthe company said it has withdrawn its revenue and financial guidance for fiscal 2022 and 2023 and does not plan to hold a conference call to discuss its 2022 financial results.
Pear joined the public markets in 2021 in a SPAC merger. At that time, the company estimated that its revenue would grow to $125 million in 2023, a figure the company would achieve by increasing the number of covered lives for its products, Pear CEO Corey McCann told MedCity News. When Pear made its Nasdaq debut, its shares traded at around $9.30 apiece. Pear’s stock price closed Friday at 39 cents.