The news: Digital therapeutics (DTx) firm Pear Therapeutics revealed it’s going public in a SPAC deal with Thimble Point Acquisition Corp at an estimated value of $1.6 billion. It expects to have $400 million in net cash once the deal closes.
How we got here: Pear’s news arrives after its $100 million Series D funding in March—cash it said it would use to get its substance abuse, opioid use disorder, and chronic insomnia DTx in more insurers' formularies to widen treatment access.
Why it could succeed: Pear will be one of the few DTx companies that are publicly traded.
What’s next? Some commercial insurers cover DTx, but convincing the CMS to reimburse digital therapies could help companies like Pear reach a far more sizable population.
For context, the CMS doesn’t currently cover most digital therapies under Medicare or Medicaid—but a temporary rule could begin to change this. In early January, the CMS issued a new rule that would automatically provide Medicare coverage for FDA breakthrough devices for a period of four years—but it’s since delayed enforcement of that rule to December 2021. This means DTx companies like Pear (which previously received FDA breakthrough designation status for its opioid use disorder treatment, for instance) will likely receive some Medicare coverage, but there’s no guarantee it’ll be a long-term rule.
Long-term coverage of digital therapies could be mutually beneficial for the CMS and DTx companies.