Business Overview
Better Therapeutics, Inc. (NASDAQ: BTTX) is a prescription digital therapeutics (PDT) company developing FDA-regulated cognitive behavioral therapy (CBT) delivered via a smartphone app to address the root causes of cardiometabolic diseases (CMDx). The company's mission is to advance human health through the power of behavior change.Better Therapeutics was founded in 2015 and is led by executives with extensive experience in developing and commercializing therapeutics and medical devices. The company's first commercial product, AspyreRx (formerly BT-001), was authorized by the FDA to treat Type 2 Diabetes (T2D) in July 2023 and launched commercially in October 2023. AspyreRx is the first FDA-authorized digital behavioral therapeutic delivering CBT for the treatment of a cardiometabolic disease.
The company's pipeline also includes programs for the treatment of hypertension, hyperlipidemia, Metabolic Dysfunction-Associated Steatotic Liver Disease (MASLD), Metabolic Dysfunction-Associated Steatohepatitis (MASH) and chronic kidney disease. Better Therapeutics has combined medical, behavioral and data sciences to develop a clinically validated software-based therapeutics platform targeting behavioral change at scale.
Financials
For the full year 2022, Better Therapeutics reported no revenue and a net loss of $39.76 million. The company's annual operating cash flow was -$28.93 million, and its annual free cash flow was -$30.11 million.In the first nine months of 2023, the company reported a net loss of $22.81 million, with no revenue generated. The company's operating cash flow for the first nine months of 2023 was -$19.75 million, and its free cash flow was -$20.70 million.
The company's balance sheet as of September 30, 2023 showed $6.60 million in cash and cash equivalents, with total assets of $10.72 million and total liabilities of $20.66 million. The company's current ratio was 0.57, and its debt-to-equity ratio was -1.44.
Regulatory Milestones and Product Pipeline
In July 2023, the FDA authorized AspyreRx for the treatment of T2D, making it the first FDA-authorized digital behavioral therapeutic delivering CBT for a cardiometabolic disease. The authorization was based on the results of a pivotal clinical trial that showed statistically significant and clinically meaningful improvements in HbA1c levels compared to the control group.Beyond AspyreRx, Better Therapeutics is advancing several other product candidates in its pipeline. In September 2023, the company completed enrollment in its real-world evidence studies to evaluate the long-term effectiveness and healthcare utilization changes associated with the use of AspyreRx for the treatment of T2D. Additionally, the company achieved positive top-line results in its LivVita study, a clinical study evaluating the feasibility of its digitally delivered CBT to reduce liver fat and improve liver disease biomarkers as a potential treatment for MASLD and MASH.
Given the significant unmet medical need for MASLD and MASH, which affect one in four Americans and cause approximately $100 billion in direct medical costs annually, the company plans to submit a request to the FDA for Breakthrough Device Designation for its investigational CBT-based treatment platform by the end of 2023.
Market Opportunity and Competitive Landscape
The treatment and other healthcare costs associated with T2D consume over $400 billion each year in the U.S., and that number is growing each year driven by rising prevalence of the disease, which is projected to grow from 37 million patients in 2019 to 55 million by 2030, as well as the introduction of expensive new drugs.Better Therapeutics believes AspyreRx has the potential to become part of the standard-of-care for the treatment of T2D, given the clinical evidence supporting its efficacy and safety, its broad label to treat all adult patients with T2D across the disease spectrum, its mechanism of action in-line with existing treatment guidelines, its broad accessibility to anyone with a smartphone and the potential cost savings the utilization of AspyreRx can generate for payers and health systems. The company projects that peak annual sales of AspyreRx may potentially exceed $1 billion per year.
The digital therapeutics market is competitive, with companies such as Pear Therapeutics, Akili Interactive, and Voluntis also developing PDTs. However, Better Therapeutics believes it is differentiated by its focus on large patient populations with significant unmet needs in cardiometabolic diseases, its clinical evidence, its broad FDA authorization for AspyreRx, and its experienced management team.
Commercialization Strategy and Partnerships
Better Therapeutics is pursuing a focused go-to-market strategy for AspyreRx, initially targeting high-prescribing providers identified as innovators and early adopters, as well as the top health systems and payer organizations that overlap, with the goal of generating early, meaningful, commercial traction. The company intends to expand its commercial footprint after establishing commercial traction in its initial target geographies.To ensure eligible patients have affordable access to AspyreRx regardless of insurance coverage while payer coverage is ramping up, the company is offering a cash-pay program for a limited time. The company expects to announce its first coverage decisions in Q4 2023 and further expand coverage through 2024.
Better Therapeutics is also engaging in business development efforts to maximize the value of AspyreRx and its platform in non-dilutive ways. The company is exploring opportunities to partner with pharmaceutical, medical technology and technology companies that have a strategic interest in digital health or the organizational infrastructure to support the successful commercialization of its products.
Risks and Challenges
As a newly commercial-stage company, Better Therapeutics faces several risks and challenges, including:- Achieving widespread market acceptance of AspyreRx and its other product candidates - Obtaining favorable reimbursement coverage and pricing for its products - Competing with other digital therapeutics and traditional pharmaceutical treatments - Continuing to develop its sales, marketing, and distribution capabilities - Maintaining compliance with complex regulatory requirements - Securing additional funding to support its operations and product development efforts
The company's ability to successfully navigate these challenges will be crucial to its long-term success and the realization of its ambitious goals.