Better Therapeutics(US:BTTX)2022-11-14 22:25Company Overview - Better Therapeutics, Inc. is focused on developing prescription digital therapeutics to address cardiometabolic diseases, with the U.S. spending approximately $4.0 trillion annually on healthcare, 90% of which is for chronic diseases[88]. Clinical Trials and Product Development - The clinical trial for BT-001 involved 668 patients with type 2 diabetes, achieving a statistically significant A1c reduction of -0.4% at 90 days (p < 0.001) and -0.3% at 180 days (p <= 0.01) compared to the control group[91]. - The mean A1c reduction for BT-001 patients was 1.3%, with half of the patients achieving clinically meaningful improvements[91]. - The FDA accepted the de novo classification request for BT-001 in October 2022, which could lead to marketing authorization for treating type 2 diabetes[91]. - The company initiated real-world evidence studies to evaluate the long-term effectiveness of BT-001, with interim results expected in 2023[93]. - A clinical study for digitally delivered CBT to reduce liver fat and improve liver disease biomarkers is underway, with 22 patients enrolled[94]. Financial Performance - Research and development expenses for Q3 2022 were $5.5 million, down from $6.7 million in Q3 2021, primarily due to decreased clinical trial costs[111]. - Total operating expenses for Q3 2022 were $10.996 million, a 22% increase from $8.995 million in Q3 2021[110]. - The net loss for Q3 2022 was $11.405 million, an 8% decrease from $12.461 million in Q3 2021[110]. - Research and development expenses increased to $13.4 million for the nine months ended September 30, 2022, compared to $13.1 million for the same period in 2021, primarily due to a $4.9 million rise in personnel and consulting costs[112]. - Sales and marketing expenses rose to $5.3 million for the nine months ended September 30, 2022, from $1.2 million in the same period of 2021, driven by increased personnel, marketing, and consulting expenses for BT-001's potential launch[114]. - General and administrative expenses were $11.3 million for the nine months ended September 30, 2022, compared to $4.2 million for the same period in 2021, largely due to a $3.4 million increase in personnel and consulting costs[116]. - Interest expense, net was $1.1 million for the nine months ended September 30, 2022, compared to $3,000 for the same period in 2021, reflecting interest on a secured term loan with Hercules Capital[119]. - The company reported a net cash used in operating activities of $22.6 million for the nine months ended September 30, 2022, compared to $15.0 million for the same period in 2021[129]. - Cash provided by financing activities was $5.2 million for the nine months ended September 30, 2022, down from $18.7 million in the same period of 2021, primarily due to proceeds from long-term debt and stock options[132]. - As of September 30, 2022, the company had $22.3 million in cash and an accumulated deficit of $102.7 million, indicating significant cash burn and reliance on external funding[125]. - The company expects to incur substantial expenses for the development and potential commercialization of its product candidates, indicating a need for additional funding in the future[127]. Funding and Capital Structure - The company completed a merger with Mountain Crest Acquisition Corp. II, raising $59.0 million in funding upon completion[123]. - The secured term loan agreement with Hercules Capital allows for borrowing in tranches based on clinical milestones, with $10.0 million borrowed in October 2021 and $5.0 million in May 2022[124]. Accounting and Reporting - No impairment of long-lived assets was indicated during the nine months ended September 30, 2022[145]. - Equity-based compensation expense is recognized over the service period, with performance conditions only recognized if probable[146]. - The fair value of common stock is determined based on the closing price on the grant date[149]. - The expected term for equity-based awards is calculated using the simplified method, averaging the time-to-vesting and contractual life[150]. - Expected volatility for options was estimated using the average historic price volatility of industry peers due to limited trading history[151]. - The company is classified as an "emerging growth company" and intends to take advantage of certain exemptions from reporting requirements[159]. - The company will remain an emerging growth company until it meets specific revenue or market value thresholds[160]. - The company is also classified as a "smaller reporting company," allowing for reduced disclosure obligations[163]. - Deferred tax assets are assessed for recoverability based on future taxable income, with a valuation allowance established when necessary[156]. - Basic and diluted net loss per share attributable to common stock is equal due to all potentially dilutive securities being antidilutive[158].