Better Therapeutics goes public through SPAC, will put proceeds toward first digital therapeutic
Although the SPAC frenzy has slowed since the beginning of the year, several digital health startups are still merging with blank-check companies as a path to the public markets. One such deal, a merger between Better Therapeutics and Mountain Crest Acquisition Corp. II, recently closed.
The San Francisco-based company raised a total of $110 million in proceeds from the merger, and began trading Friday on Nasdaq under the ticker “BTTX.” It plans to use the funds to support a pivotal study of its digital therapeutic for Type 2 diabetes.
“We envision a future where digital therapeutics are often the first prescription written in order to address the root causes of disease caused by patient behaviors,” CEO Kevin Appelbaum said in a news release. “The completion of this transaction and the capital raised will be instrumental in helping our team lead the way in this transformation, beginning with cardiometabolic diseases.”
Better Therapeutics was founded in 2015. It doesn’t yet have any products on the market, but aims to treat conditions like Type 2 diabetes, high blood pressure and hyperlipidemia using app-based programs. It intends to do this by addressing cognitive patterns that drive eating and lifestyle behaviors, and for its apps to be prescribed by physicians.
The company is recruiting for a pivotal trial of its lead therapeutic, with the goal of enrolling more than 600 people, according to Clinicaltrials.gov.
SPAC mergers involve forming a shell company, which goes public with the purpose of finding an acquisition target. The group behind this deal, Mountain Crest, has formed three SPACs so far. The first took Playboy Enterprises public in February, and the second took Better Therapeutics public, while a target has yet to be announced for the third blank-check company.
Mountain Crest Acquisition Corp. II’s shareholders approved a merger with Better Therapeutics in an Oct. 27 meeting. The deal included $70 million in gross proceeds, including a private investment in public equity by Farallon Capital Management, RS Investments, Sectoral Asset Management, and Monashee Investment Management. It also included the first tranche of a credit facility from Hercules Capital.
Photo credit: aurielaki, Getty Images