Better Therapeutics (Nasdaq:BTTX) announced that it commenced a workforce reduction of approximately 35% of its employees.
Per the digital therapeutic developer’s most recent annual report, it had 44 employees as of Dec. 31, 2021. The layoffs could affect as many as 15 employees if the headcount remains similar.
In an SEC filing, Better Therapeutics said the headcount cut comes as part of a cost reduction initiative. It aims to improve its cash runway and “focus on the long-term success of the company.” According to the filing, the company planned to complete the reduction on March 24 with about $400,000 in cash-based expenses related to severance and benefits in the second quarter of 2023.
Better Therapeutics is not the only digital therapeutic developer to enforce layoffs recently. Both Pear Therapeutics and Akili slashed their workforces. Here’s a list of recent layoffs around the medtech industry.
Shares of BTTX fell 4.7% to 85¢ apiece in mid-afternoon trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — rose 0.4%.
Better Therapeutics CEO pens letter to employees
CEO Frank Karbe sent an email to Better Therapeutics employees on March 23, announcing the workforce reduction. In it, Karbe wrote that the company is implementing cost-saving actions to further extend its financial runway ahead of “critical milestones.”
Those include, over the next few months, potential FDA marketing authorization and a subsequent launch for BT-001. BT-001 is a digital therapeutic for treating type 2 diabetes. The company submitted an FDA de novo request in September 2022 for the therapeutic.
“Layoffs are devastating for everyone,” Karbe wrote in the letter, which was included in the SEC filing. “As CEO, I take responsibility. While this does not ease the pain, I recognize today was an extremely difficult day.”
Karbe went on to say that the company reached a “critical moment” in its evolution ahead of potential regulatory nods. With challenges spanning the industry, Karbe and the company felt they had to enact the layoffs.
“As we navigate volatility and uncertainty in the markets, it has become clear that we need to take action to preserve our cash runway,” he wrote.