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35% Of Better Therapeutics’ Staff to be Cut to Extend the Company’s Runway
To cut costs going into the second quarter of this year, prescription digital therapeutics company Better Therapeutics announced that it plans to lay off 35% of its workforce. The substantial layoff comes after the company’s 2022 SEC filing indicated that it is accruing significant losses while developing software-based digital therapeutics targeting diseases like type 2 diabetes, hypertension, and non-alcoholic steatohepatitis.
A Word from the CEO
In addition to the news of the cut, Better Therapeutics’ CEO, Frank Karbe, posted an excerpt from an email to the company in an SEC filing. The company also plans to provide further updates during a conference call on March 30.
Karbe, who Better appointed as CEO in July last year, started off the email with the bare news of how many employees would be lost, followed by some condolences for the situation. With 44 employees at the company, the 35% cut would amount to about 15 people losing their jobs.
The CEO went on to praise the company’s efforts so far to develop a digital cognitive therapy to guide people with type 2 diabetes to lead healthier lifestyles. With that in mind, Karbe did not ignore the unknown landscape that a product like this faces in the industry.
Karbe said, “We discussed over the last few months the challenges the life sciences industry is facing. As we navigate volatility and uncertainty in the markets, it has become clear that we need to take action to preserve our cash runway.”
Providing one final ray of hope and motivation in the excerpt, Karbe finished, “Digital behavioral interventions like ours have the potential to transform the way healthcare is practiced and delivered by targeting the underlying causes of a disease, overcoming healthcare inequities and access hurdles, and providing personalized and effective treatments that are tailored to the specific needs of patients.
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A Mountain of Losses Piling Up
Better Therapeutics’ layoff announcement comes at a critical time for the company when it faces huge losses year over year as it develops its novel digital therapies. According to the company’s most recent SEC filing, Better racked up nearly $31 million in losses in the first nine months of 2022.
As of September 30 last year, Better accumulated nearly $103 million in net losses, a figure that the company only expects to grow in the coming years.
The filing said, “At this time, we cannot reasonably estimate the nature, timing or aggregate amount of costs for our development, potential commercialization, internal research and development programs and general and administrative activities.”
Unfortunately, Better Therapeutics’ future may remain uncertain for some time due to the nature of prescription digital therapeutics. The field is so new to the industry that many questions remain unanswered. Even though a product may demonstrate topline results in the clinic, problems like how to prescribe a digital application and pricing a model like that still need clarification.
Still, the technology is new and exciting, and even though the company plans on cutting a significant portion of its staff, the end goal may pay off in the coming years. That said, the company will have another $400,000 in expenses in the form of severance and benefits associated with the layoffs.
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