Illustration: Lindsey Bailey/Axios
Digital therapeutics company Pear Therapeutics was sold for parts to four companies for a combined $6.05 million in an auction last week.
Why it matters: Valued at $1.6 billion just two years ago, Pear's fall from grace points to a larger reimbursement challenge for digital therapeutics, Axios' Claire Rychlewski writes.
What's happening: Click Therapeutics, Welt Corp, Harvest Bio and Nox Health Group each acquired bits of the company.
- The price tag falls short of the $32 million in debt Pear carried. A hearing to approve the sale will be held on May 22.
- Pear filed for Chapter 11 bankruptcy last month.
Zoom in: Health and wellness apps developer Click Therapeutics offered $70,000 for the patents behind the Pear Platform for digital therapeutic development.
- Patents and licenses related to Pear's invention science fund, as well as Pear's assets related to schizophrenia, multiple sclerosis, depression, and rights to its opioid-specific program went to Harvest Bio for $2.03 million.
- Sleep therapy company Nox Health Group put down $3.9 million for assets related to Pear's FDA-cleared insomnia treatment Somryst.
- Digital health maker Welt paid $50,000 for Pear’s migraine-focused program.
Catch up quick: Pear, whose therapeutics are designed to address conditions including insomnia and substance use disorder (SUD), was the first to secure regulatory clearance for a prescription digital therapeutic.
- Pear merged with SPAC Thimble Point Acquisition Corp. at a valuation of $1.6 billion in 2021.
- In 2022, the company underwent two rounds of layoffs and, finding itself short on cash, paused work on its clinical pipeline.
- Pear said in a regulatory filing in March that it was exploring strategic options via MTS ahead of a formal restructuring.
How it worked: The company had three digital therapeutics on the market for insomnia, SUD and opioid use disorder (OUD).
- Through clinical trials, Pear succeeded in getting clearance from federal regulators to market its products.
- Yet the company struggled to secure reimbursement for its novel treatments, especially among commercial and government payers.