Pear Therapeutics

Pear Therapeutics, a digital therapeutics company founded in Boston in 2014, developed software-based prescription treatments for substance use disorder, opioid use disorder, and insomnia.¹⁸ The company went public via a SPAC merger in 2021 at a valuation of $1.6 billion, but struggled to gain payer reimbursement and filed for Chapter 11 bankruptcy on April 7, 2023.^134568910 Pear's assets were sold at auction for approximately $6 million to four buyers, including a bid from former CEO Corey McCann's new venture Harvest Bio.⁸⁹¹⁷

Timeline

Money raised

Pear Therapeutics raised $50 million in March 2018, bringing its total equity raised to $90 million.¹¹ By June 2021, Pear had raised $396 million.¹⁰ Pear went public via a SPAC merger in December 2021 at a valuation of $1.6 billion.¹⁸⁹¹⁰ Pear had raised more than $400 million in venture capital since being founded in 2013.⁸ Pear lost $418 million in raised capital, according to IdeaProof.² At the time of its Chapter 11 filing, Pear had $32 million in debt.⁸⁹ Pear's assets were sold at auction for a total of just over $6 million.⁸⁹¹⁷ Harvest Bio bid $2.03 million for certain assets including reSET and reSET-O.⁸⁹ Nox Health Group bid $3.9 million for Somryst.⁸⁹ Click Therapeutics paid $70,000 for certain patents, and WELT Corp. paid $50,000 for the migraine program.⁸⁹

Investors named in the sources: T.Rx Capital Fund⁸⁹.

What happened

Pear Therapeutics was founded in Boston in 2014 to develop software-based medicines, or digital therapeutics.¹ The company developed prescription digital therapeutics, including reSET for substance use disorder, reSET-O for opioid use disorder, and Somryst for insomnia.⁸⁹ Pear received FDA clearance for its products, becoming a pioneer in the digital therapeutics category.⁴⁷⁸ Pear raised venture capital funding, including $50 million in March 2018, bringing its total equity raised to $90 million.¹¹ By June 2021, Pear had raised $396 million.¹⁰

In December 2021, Pear went public via a SPAC merger at a valuation of $1.6 billion.¹⁸⁹¹⁰ Pear had raised more than $400 million in venture capital since being founded in 2013.⁸ In 2022, Pear began saying it would need to raise additional funds in 2023.¹ Pear went through two rounds of layoffs and paused development of its pipeline in 2022.¹ In March 2023, Pear announced it was exploring strategic options after failing to build a sustainable business for its digital treatments.¹

On April 7, 2023, Pear Therapeutics filed for Chapter 11 bankruptcy.^134561516 Pear announced it would terminate 170 employees, approximately 92% of its workforce, and continue to operate with 15 employees while seeking a buyer.¹ CEO Corey McCann stepped down from his role but continued to serve on the company's board and provide consulting services.¹ Pear's assets were sold at auction for approximately $6 million to four buyers.⁸⁹¹⁷ Harvest Bio, a company backed by former CEO Corey McCann, bid $2.03 million for assets including reSET, reSET-O, and the PearConnect platform.⁸⁹

Nox Health Group bid $3.9 million for Somryst.⁸⁹ Click Therapeutics paid $70,000 for certain patents, and WELT Corp. paid $50,000 for the migraine program.⁸⁹ The total sale price of just over $6 million was well below Pear's debt of $32 million.⁸⁹ The bankruptcy court held a hearing to finalize the approved bids on May 22, 2023.⁹ The Chapter 11 case was closed by final decree on May 23, 2024.¹⁵

Pear's failure was attributed to payer reimbursement challenges and insufficient prescriber and payer buy-in.²⁷ Pear tried to change not only how payers provide care, but also how payers reimburse for it.⁷ The reimbursement environment for digital health interventions and market conditions compromised Pear's ability to operate.⁸ Pear's bankruptcy was seen as emblematic of a larger problem in health tech.⁴ One lesson suggested is to be only slightly disruptive, disrupting one thing at a time.⁷

Pear's assets were sold to four companies: Harvest Bio, Click Therapeutics, Welt Corp, and Nox Health Group.⁸ Harvest Bio's bid included intellectual property, development-stage DTx for major depressive disorder, schizophrenia, multiple sclerosis, and other indications.⁸ Harvest Bio also acquired the PearConnect platform that allows healthcare providers to remotely monitor patients prescribed reSET and reSET-O.⁸ Nox Health Group acquired assets around Somryst, Pear's FDA-cleared insomnia treatment.⁸⁹ Click Therapeutics acquired certain patents Pear held on its DTx development platform.⁸⁹

Welt Corp acquired Pear's migraine programme.⁸⁹ The federal government expressed concerns that Harvest Bio may not be able to avoid the same fate as Pear.⁸ Harvest Bio was backed financially by investment company T.Rx Capital Fund.⁸⁹ Michael Langer, a former Pear executive, was listed as a principal of T.Rx Capital Fund.⁸⁹ Pear's former CEO Corey McCann was the signatory for Harvest Bio's purchase of over $2 million in assets.⁹

Pear's bankruptcy filing was made in the United States Bankruptcy Court for the District of Delaware.¹⁵ The meeting of creditors was held on May 17, 2023.¹⁵ Pear Therapeutics, Inc. and Pear Therapeutics (US), Inc. were the debtors in the Chapter 11 cases.¹⁵

Legal outcomes

• filedPear Therapeutics, Inc. and Pear Therapeutics (US), Inc. filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code on April 7, 2023.¹⁵
• filedThe bankruptcy cases were jointly administered under Case No. 23-10429 in the United States Bankruptcy Court for the District of Delaware.¹⁵
• dismissedThe Chapter 11 case was closed by final decree on May 23, 2024.¹⁵

Where the founders are now

Corey McCann stepped down as CEO of Pear Therapeutics but continued to serve on the company's board and provide consulting services.¹ Corey McCann was the signatory for Harvest Bio's purchase of over $2 million in assets from Pear.⁹ Harvest Bio was backed financially by investment company T.Rx Capital Fund, which lists former Pear executive Michael Langer as a principal.⁸⁹

Sources

1. Digital health pioneer Pear Therapeutics files for bankruptcy, STAT, 2023-04-07
2. Test Your Idea in 120s — Free AI Startup Validator | IdeaProof, IdeaProof.io
3. Pear Therapeutics Files for Bankruptcy, to Pursue Sale, wsj.com, Apr 7, 202
4. Pear Therapeutics's bankruptcy could be emblematic of a ..., healthcare-brew.com, May 10, 20
5. Pear Therapeutics files for Chapter 11 bankruptcy, biopharmadive.com
6. Maker of first FDA-approved prescription software files for ..., bizjournals.com, Apr 7, 202
7. Digital Medicines Sector Draws Lessons From Pear Therapeutics’ Demise - MedCity News, MedCity News, 2023-10-26
8. Can Pear bud again? Ex-CEO McCann bids for assets, pharmaphorum, May 24, 20
9. https://telecareaware.com/, telecareaware.com, May 24, 20
10. PJ SOLOMON, solomonpartners.com, Jun 24, 20
11. Digital health funding in Q1 2018, mobihealthnews.com, Mar 30, 20
15. Pear Therapeutics, Inc., et al., cases.stretto.com
16. Pear Therapeutics files for Chapter 11 bankruptcy, healthcaredive.com, Apr 10, 20
17. Pear Therapeutics apps sell for $6M in post-bankruptcy ..., fiercebiotech.com, May 19, 20

How this case file was put together

Every statement on this page carries a numbered note, and every note points to a court record, a regulatory filing or a named publication in the list of sources. Each statement was checked against the text of the sources it cites before it was published: a figure, a date or a name the cited source does not contain was cut rather than kept. Allegations are shown as allegations, with their status at the time of the source (filed, charged, convicted, pleaded, settled, dismissed or pending). Quoted lessons are the words of the person or publication named with them, copied from the cited source; nothing here is our own opinion of why the company failed.

If a fact on this page is wrong, use "Report an error" below and attach the record that shows the correct fact. Every report is reviewed by a person before anything changes, and a corrected page says when it was last corrected.

All case files2023digital health