Better slashes staff in another digital health retreat

Frank Karbe
Better Therapeutics

Better Therapeutics has become the latest company in the digital health sector to announce big job cuts, saying it needs to conserve cash as it waits for FDA approval of its lead product.

The digital therapeutics company is reducing its headcount by 35% and making other cost-savings to eke out its finances ahead of the potential approval and launch of BT-001, a digital therapeutic (DTx) for type 2 diabetes.

In a letter to staff, filed with the US financial regulator, Better’s chief executive Frank Karbe said the decision was “painful”, but in light of “volatility and uncertainty in the market, it has become clear that we need to take action to preserve our cash runway.”

The move comes hard on the heels of a decision by Pear Therapeutics – which already has three FDA-approved DTx – to cut staff by 22% and look into a potential sale of the business in light of slow revenue growth.

That decision exposed the difficulties faced by digital heath players in building a commercially viable business, even after jumping through the regulatory hoops needed to claim FDA approval for a prescription DTx.

A key challenge facing developers is raising awareness of the availability and value of their therapies, and accessing reimbursement pathways so they don’t have to rely on business to consumer sales.

All that will still lie ahead for Better, even if the FDA delivers approval for BT-001, a cognitive behavioural therapy (CBT) designed to help patients with type 2 diabetes manage their blood sugar levels through better diet and exercise habits, which is due for an FDA verdict in the next four to five months.

In clinical results reported last year, Better said that BT-001 was able to significantly improve blood glucose control when used on top of standard drug therapy for type 2 diabetes, compared to a control group on drug therapy alone.

“My long-term outlook for the potential of our digital therapeutics platform, not just in type 2 diabetes, but potentially many other cardiometabolic diseases, remains unchanged,” said Karbe in the letter.

“I continue to believe that we will demonstrate the significant medical and commercial potential of our therapeutic approach, including the potential to significantly reduce the cost of care associated with chronic metabolic conditions,” he added.

He pointed out that more than 60% of adults in the US have at least one chronic condition, and 40% have two or more, while currently available drugs treat symptoms, but do not impact the root causes of disease.

“We know that most patients get worse over time, despite being on multiple prescription drugs,” wrote Karbe in the letter.

“Digital behavioural interventions like ours have the potential to transform the way healthcare is practiced and delivered by targeting the underlying causes of a disease, overcoming health care inequities and access hurdles, and providing personalised and effective treatments that are tailored to the specific needs of patients.”

The layoffs will cost Better around $40,000. The company made a loss of $11 million in the third quarter, and as of the end of last September had around $22 million in cash, having raised around $70 million through a merger with a blank cheque company in 2021. It is due to report fourth quarter results later this week.