Date: 07/11/2023
Author: Mr. X
It’s been an eventful few months for Better Therapeutics (BTTX). In late March, the company announced it was laying off an astonishing 35% of its workforce. It said this was part of a “cost reduction initiative to improve [the company’s] cash runway and focus on the long-term success of the company.” CEO Frank Karbe said the layoffs were “devastating.” “We built this company on the foundations of transparency and trust, so it is important I share the background for these decisions,” he said. “Above all, I am sorry it has come to this.”
However, he said that the long-term potential for success was still there.
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. To all our team members, while this is a setback in the journey that began eight years ago, our story is far from written. I am confident we will get through this.
In April, the picture improved when the company secured $6.5 million in a private placement. That was enough to spark a wave of positive articles upgrading the stock to a buy. Still, the cash situation appeared ruinous. In the fiscal year ending December 31, 2022, the company showed an increase in losses of over 25%, ending up with a loss of over $38 million. Total assets were down compared to 2021.
The stock began rallying in late June. It was at just $0.93 on June 29. By July 5, it was at $1.23. However, yesterday, it fell by more than 19% to just $0.90.
RIPPED STRAIGHT FROM THE HEADLINES… NOW MORE IMPORTANT THAN EVER
DON’T MISS THIS ABSOLUTELY CRITICAL PRESENTATION
That was during the trading day. In extended trading, it surged by more than 26% as a Type 2 diabetes treatment finally got FDA approval. AspyreRX ™, once called BT-001, is a prescription-only digital therapeutic (PDT) treatment indicated to provide cognitive behavioral therapy to patients 18 years or older with type 2 diabetes (T2D). It will launch relatively quickly, in the fourth quarter of this year. According to David Kerr at the Diabetes Technology Society, “The cornerstone of modern diabetes care is helping to improve self-efficacy and AspyreRx now provides a prescription tool for physicians that seamlessly integrates with existing disease management programs to help patients make and sustain meaningful changes to improve their overall health.”
Clinical data showed about half of subjects achieved a mean A1c reduction after 180 days. On average, subjects also experienced other benefits including improved fasting blood glucose, reduced systolic blood pressure, reduced weight, improved mood, improved quality of life scores, lower medication utilization and fewer diabetes related risks compared to subjects who did not use it.
There will be a call this morning that will update investors on what’s coming next, but look for BTTX to be among the most active stocks this morning. Biotech lives and dies by FDA approvals, and this is a desperately needed victory by a company that only a few months ago looked like it was on the brink.
Mr. X is an investment analyst working in the Washington DC area who specializes in the intersection of business and public policy. After fifteen years working in politics, he writes on a classified basis for RogueInvesting.com to bring you news on what those with power are debating, planning, and doing
