Prescription digital therapeutics company Pear has announced it has filed for Chapter 11 bankruptcy. According to a filing with the U.S Securities and Exchange Commission, the company has terminated 170 employees, almost all of its workforce, retaining a team of about 15 employees to continue operations as the company sells off its assets. Corey McCann has stepped down as CEO and President, but will continue to serve as a board member and provide consulting services through the sales process.
The company has not been immune to the difficulties faced by the digital health sector in recent times. In 2022, Pear announced two rounds of lay-offs, cutting 9% of its staff in July and an additional 22% in November. Furthermore, the bankruptcy filing follows an announcement by Pear last month that the company was seeking “alternative strategies”, and were exploring the potential for an acquisition, sale, or merger of the company.
Pear has three prescription digital therapeutics on the market covering insomnia, opioid use disorder, and substance use disorder, however, insurance reimbursement for these products has been slow, resulting in the company reducing its revenue forecast in 2022.
"We've shown that clinicians will readily prescribe prescription digital therapeutics. We've shown that patients will engage with the products. We've shown that our products can improve clinical outcomes. We've shown that our products can save payors money," CEO Corey McCann wrote in an April 8 LinkedIn post. "Most importantly, we've shown that our products can truly help patients and their clinicians. But that isn't enough. Payors have the ability to deny payment for therapies that are clinically necessary, effective, and cost-saving. In addition, market conditions over the last two years have challenged many growth-stage companies, including us."
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