Better Therapeutics, a prescription digital therapeutics (PDT) company, announced plans to go public by merging with special purpose acquisition company Mountain Crest Acquisition Corp II.
The merger is expected to close this summer, subject to stockholder approval, and will raise $113 million for the combined company. The combined company will operate as Better Therapeutics and is expected to be listed on Nasdaq under the symbol BTTX.
According to the press announcement, the proceeds from the transaction will be used to advance Better Therapeutics’ product to treat type 2 diabetes and advance the pipeline of prescription digital therapeutics for a range of cardiometabolic diseases.
The merger transaction values Better Therapeutics at an enterprise value of approximately $187 million, with existing Better Therapeutics shareholders rolling over 100% of their equity into the equity of the combined company.
Better Therapeutics has created a proprietary platform for the development of FDA-regulated, software-based therapies for type 2 diabetes, heart disease, and other conditions. The platform is designed to help people with Type 2 diabetes improve their glycemic control by lowering their HbA1C levels.
“Today, 34 million people in the U.S. have been diagnosed with type 2 diabetes, and another 88 million are considered prediabetic. We believe we have an immense opportunity to fundamentally change the treatment paradigm for these individuals with our PDT platform,” said David Perry, co-founder and executive chairman of Better Therapeutics.
David Perry added: “Multiple studies published in peer-reviewed medical journals support our proposition that our digital therapeutics have the potential to improve blood glucose and HbA1c levels similar to drug therapies. We believe that by addressing the underlying causes of disease, our products have the potential to improve patient health while reducing treatment costs.”
As COVID-19 created uncertainty in public markets, 2020 saw a surge in the formation of SPACs corporations. SPACs are also set to outpace traditional digital health IPOs in 2021. In one such deal, Hims & Hers, an online direct-to-consumer telehealth company that uses remote consultation to prescribe cosmetic and sexual health products, completed its business combination with blank-check company Oaktree Acquisition Corp.