Better Therapeutics, Inc. (BTTX) is a prescription digital therapeutics company that has developed a novel form of cognitive behavioral therapy (CBT) delivered via a digital platform to address the root causes of cardiometabolic diseases. Founded in 2015, the company has made significant strides in its mission to advance human health through the power of behavior change.
Business Overview and History
Better Therapeutics was established with the goal of revolutionizing the treatment of chronic conditions by leveraging the power of digital technologies. The company's innovative approach centers around its prescription digital therapeutic platform, which delivers personalized CBT programs designed to target the specific behaviors that contribute to the development and progression of cardiometabolic diseases.
In 2021, Better Therapeutics completed a business combination with Mountain Crest Acquisition Corp. II, becoming a publicly traded company. This strategic move provided the company with additional capital to advance its lead product, AspyreRx, formerly known as BT-1.
The following year, Better Therapeutics achieved a significant milestone by completing a pivotal clinical trial for AspyreRx, its lead product candidate for the treatment of Type 2 Diabetes (T2D). The trial demonstrated statistically significant and clinically meaningful improvements in both primary and secondary endpoints, paving the way for the company to submit a de novo classification request to the FDA for AspyreRx.
In July 2023, the company received FDA authorization for AspyreRx for the treatment of Type 2 diabetes (T2D) in patients 18 years and older. This marked a significant milestone for Better Therapeutics, as AspyreRx became the first FDA-authorized digital behavioral therapeutic for a cardiometabolic condition. The authorization was based on the positive results of the company's pivotal clinical trial, which demonstrated statistically significant and clinically meaningful improvements in glycemic control for patients using AspyreRx compared to the control group.
The clinical trial for AspyreRx achieved statistically significant and clinically meaningful changes in both the primary and secondary endpoints. The primary efficacy endpoint was the difference in mean change in A1c from baseline after 90 days of treatment, where AspyreRx met the endpoint showing a highly statistically significant improvement in A1c relative to the control group. AspyreRx also showed a sustained and statistically significant change relative to the control group on the secondary efficacy endpoint, which was the mean change in A1c from baseline at 180 days. Importantly, AspyreRx met the 180-day endpoint even though 1.5 times more standard of care patients increased blood sugar lowering medications relative to those in the AspyreRx arm prior to the 180-day A1c draw. The clinical trial also provided evidence of a clear dose-response between greater engagement in CBT and greater reductions in A1c, supporting CBT as a mechanism of action.
Following the FDA authorization, Better Therapeutics launched AspyreRx commercially in October 2023, targeting high-prescribing providers and the top health systems and payer organizations. The company's strategy is to drive adoption of AspyreRx by educating healthcare providers and payers on the clinical benefits, patient experience, and potential cost savings associated with the digital therapeutic.
The company 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 T2D patients across the disease spectrum, its mechanism of action in-line with existing treatment guidelines, its broad accessibility through smartphones, and the potential cost savings its utilization can generate for payers and health systems.
Alongside the commercialization of AspyreRx, Better Therapeutics is advancing its pipeline of digital therapeutic candidates for the treatment of other cardiometabolic conditions, including hypertension, hyperlipidemia, Metabolic Dysfunction-Associated Steatotic Liver Disease (MASLD), Metabolic Dysfunction-Associated Steatohepatitis (MASH), and chronic kidney disease. 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.
In October 2023, Better Therapeutics announced positive top-line results from its LivVita study, a first-ever 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. The single-arm interventional study met its primary endpoint, showing a statistically significant positive signal with an average relative reduction in Magnetic Resonance Imaging-Proton Density Fat Fraction of 16% in the intent-to-treat population. The company plans to submit a request for Breakthrough Device Designation from the FDA for its investigational CBT-based treatment platform by the end of 2023.
Financial Overview
Financials
Better Therapeutics' financial performance has been largely focused on research and development (R&D) and commercialization efforts, as the company has yet to generate significant revenue from product sales. For the fiscal year 2022, the company reported no revenue, a net loss of $39.76 million, operating cash flow (OCF) of -$28.93 million, and free cash flow (FCF) of -$30.11 million.
For the nine months ended September 30, 2023, the company reported a net loss of $22.81 million, with R&D expenses of $7.46 million and sales and marketing expenses of $5.20 million. The most recent quarter (Q3 2023) showed a net loss of $5.86 million, OCF of -$5.94 million, and FCF of -$5.95 million. Notably, there was a 49% decrease in net loss compared to the same quarter in the prior year, which was primarily driven by a 51% decrease in total operating expenses due to cost reduction initiatives.
As of September 30, 2023, the company had $6.60 million in cash and cash equivalents and an accumulated deficit of $134.3 million. Better Therapeutics currently only sells in the United States market.
Liquidity
The company's liquidity and capital resources have been a concern, as it has incurred significant losses since inception and faces challenges in securing additional funding to support its ongoing operations and future growth plans. As of September 30, 2023, Better Therapeutics reported the following key liquidity metrics:
- Debt/Equity ratio: -1.44 - Cash: $6.6 million - Current ratio: 0.57 - Quick ratio: 0.57
The company has a $50 million senior secured term loan facility, of which $14.3 million was outstanding as of September 30, 2023. The facility has a maturity date of August 1, 2025.
In April 2023, Better Therapeutics raised $6.50 million through a private placement, followed by additional capital raises of $2.10 million in a private placement and $2.20 million in a registered direct offering in July 2023. Additionally, the company has been actively utilizing an at-the-market (ATM) offering program, raising $5.20 million as of October 25, 2023.
Better Therapeutics believes it has sufficient capital to fund its operations into the first quarter of 2024, but has expressed substantial doubt about its ability to continue as a going concern without raising additional capital. The company is exploring various financing options, including the sale of equity or debt securities and other non-dilutive financing alternatives, to support the commercial launch of AspyreRx and the continued development of its pipeline.
Risks and Challenges
Better Therapeutics faces several risks and challenges as it continues to navigate the digital therapeutics landscape. The company's limited operating history and significant financial losses since inception raise substantial doubt about its ability to continue as a going concern. The company may require additional funding in the future to complete its product development and commercialization efforts, which may not be available on favorable terms or at all.
Furthermore, the successful commercialization of AspyreRx and the company's other product candidates is critical to its future success. If physicians are not willing to adopt the digital therapeutic or if it fails to achieve and maintain market acceptance, Better Therapeutics' business, financial condition, and results of operations could be materially and adversely affected.
The company also faces competition from other digital health solutions and traditional pharmaceutical treatments, which could reduce or eliminate the commercial opportunity for its products. Additionally, regulatory risks, such as the ability to obtain and maintain necessary regulatory authorizations, could impact the company's ability to bring its products to market.
Outlook and Conclusion
Despite the challenges, Better Therapeutics remains optimistic about its future prospects. The company's focus on addressing the root causes of cardiometabolic diseases through its novel digital therapeutic platform sets it apart in the rapidly evolving digital health landscape. The successful commercialization of AspyreRx and the advancement of its pipeline of digital therapeutic candidates for other conditions could position Better Therapeutics as a leader in the prescription digital therapeutics space.
The FDA's authorization of AspyreRx created a new class of diabetes digital behavioral therapeutic devices, which could pave the way for broader adoption of digital therapeutics in the treatment of cardiometabolic diseases. The company's ongoing real-world evidence studies and the positive results from its LivVita study for MASLD and MASH treatment further support the potential of its digital therapeutic platform.
As the company continues to navigate the complexities of the healthcare industry, its ability to secure additional funding, execute on its commercialization strategy, and demonstrate the long-term clinical and economic benefits of its digital therapeutics will be critical to its success. Investors will closely monitor the company's progress in establishing reimbursement coverage, expanding market access, and advancing its research and development efforts.
Overall, Better Therapeutics' unique approach to addressing cardiometabolic diseases through digital therapeutics holds promise, but the company must overcome significant challenges to realize its full potential and drive long-term shareholder value. The coming months will be crucial as the company ramps up commercialization efforts for AspyreRx and seeks to secure additional funding to support its ongoing operations and development pipeline.