Pear going public via SPAC: Take a bite out of that

The recent announcement that Pear Therapeutics will go public via SPAC is more than just another in a flurry of digital health exits. Valued at approximately $1.6B, the deal will result in a merger between Pear Therapeutics Inc. and Thimble Point Acquisition Corp. (THMA) to form Pear Holdings Corp. (PEAR) (love that ticker!). There’s a lot to unpack here, from what this means for SPACs’ impact on the digital health market to the opportunities for the soon-to-be public Pear’s trajectory.

What does this deal mean in the context of the digital health SPAC boom?

As we’ve written before, there is a potential supply-demand mismatch between SPAC sponsors and possible targets in digital health. This deal indicates that the mismatch may be growing.

Thimble Point’s announced area of focus was “high-growth software and technology-enabled companies that are disrupting large and established industries,” and digital health fits the bill. However, Thimble Point was not publicly focused on healthcare or digital health in its search for a SPAC target. As more non-healthcare-focused sponsors close deals with highly capitalized digital health companies like Pear, the SPACs still in a race to acquire in digital health face a shrinking pool of targets.

In regards to the company itself, Pear Therapeutics has long been a marquee organization in the world of digital health. From coining the term “prescription digital therapeutic” (PDT) to being the first to receive FDA clearance for a PDT with reSET®, Pear has been a pioneer.

What will going public—and the influx of funds that come with it—mean for this category-creator?

We’re keeping our eyes on the end-to-end platform Pear has built for bringing PDTs to market. This infusion of capital gives Pear the means to make an infrastructure play in the PDT segment—or even in digital therapeutics, more broadly. Their platform provides the technology backbone to support discovery, development, and commercialization of PDTs—even solving for the complexity of dispensing prescribed software. Corey McCann, M.D., Ph.D. President and CEO of Pear, indicated the company “is at a commercial inflection point, with potential for rapid expansion.” We see two different paths the company could take to achieve this rapid expansion.

Option one: use the new capital to expand into other therapeutic areas via a string of acquisitions, getting in on the platform wars. They could use their hallmark commercialization strategy to create a PDT platform. Notably, this wouldn’t be too far removed from Pear’s strategy to date, which has included licensing technology from academia, productizing, and commercializing it.

Option two: convert their current assets into the next-gen platform for PDT development, following another trend of supporting marketwide growth by providing critical digital health infrastructure. This could be enhanced by technology that Pear has recently licensed from other digital health startups such as Empatica, etectRx, KeyWise AI, and Winterlight Labs to serve as (in their words) “platform enhancements.”

For now Pear appears to be well positioned for either path. We’re curious to see how it plays out—and to get a glimpse under the hood of Pear’s unique business model—once the public market spotlight is turned in their direction.