Better Therapeutics,Inc. (NASDAQ: BTTX) is a prescription digital therapeutics with an aim of developing novel cognitive behavioral therapy to treat the root causes of cardiometabolic diseases such as heart attack, stroke, and diabetes. After releasing updates regarding the company’s ongoing studies for its flagship drug BT-001, BTTX stock has been trending among bullish investors. Given that clinical trials are ongoing, some investors are bullish on the long-term potential this stock presents as the company continues to release more updates.
BTTX Stock News
As is, almost $500 billion is spent every year to treat cardiometabolic diseases but the root behaviors causing them are often neglected. With this in mind, BTTX has been developing prescription software in an attempt to combat these diseases while fundamentally changing the way they are treated. Currently, BTTX is focused on launching BT-001, its first such product for the treatment of Type 2 diabetes, by 2023 as well as additional treatments for other cardiometabolic diseases.
There is already a market for BT-001 since 34 million people in the US have been diagnosed with Type 2 diabetes and another 88 million suffer from prediabetes. At the same time, medical costs for treating Type 2 diabetes in the US reached $237 billion in 2017 and is expected to rise to $472 billion by 2030. With this in mind, BT-001 could provide a more affordable alternative to traditional treatments.
As an FDA regulated Prescription Digital Therapeutic (PDT), BT-001 would provide patients with nutritional cognitive behavioral therapy digitally in an attempt to treat Type 2 diabetes by permanently changing patients’ behaviors. With 669 participants in the ongoing trial, BT-001 has already shown impressive results in reducing A1c – a blood sugar measure – as well as improvements in patients’ blood sugar management. Meanwhile, BTTX has expanded its BT-001 studies to include Mass General Brigham and Durham Veterans Administration Medical Center. If BT-001 receives FDA approval following its clinical trials, the treatment could be a major catalyst for the company given the treatment’s potential to address the root causes of Type 2 Diabetes.
The current trial will be completed in Q2 and BTTX intends to apply for a De Novo classification request with the FDA at the end of it. This classification provides “a marketing pathway to classify novel medical devices for which general controls alone, or general and special controls, provide reasonable assurance of safety and effectiveness for the intended use, but for which there is no legally marketed predicate device.” If accepted, the new device will be authorized to be marketed in compliance with regulatory controls.
As is, BTTX’s CEO and co-founder – Kevin Appelbaum – is bullish on what this treatment could mean for the company saying, “We created nutritional CBT delivered as a prescription digital therapeutic to fill a known gap in clinical care,” and the results of this study “suggests that we are not only on the right track for creating a safe and effective treatment for type 2 diabetes, but that nutritional CBT may offer potential across a broad range of cardiometabolic conditions.”
Its worth noting that Appelbaum purchased 2,500 shares on the open market in March and exercised a stock option to add another 235 thousand shares to his already significant investment. As of December 2021, BTTX’s Executive Chairman David Perry and Kevin Appelbaum own, collectively, approximately 56.4% of the company’s outstanding shares. All together, Better Therapeutics insiders own roughly 61% of the company’s shares and many have consistently bought well above the current BTTX stock price of $1.51 – including the company’s independent director Andrew Armanino who bought at $2.14 per share increasing his total holding by 40%.
While the heavy insider ownership is a bullish sign, many investors are optimistic thanks to Appelbaum’s 25 years of experience as an entrepreneur during which he became well-known for using digital technology to transform businesses. Also, during his tenure at BTTX, the company has received 4 FDA clearances in three indicators. With this history of success, many investors are bullish that BTTX will continue its growth under his leadership.
Moreover, BTTX is developing other products in its pipeline for the treatment of hypertension and hyperlipidemia. Both of these products are in pilot trials, but BTTX plans to advance them to pivotal trials after BT-001. As is, BTTX appears intent on exploring the possible applications of nutritional cognitive-behavioral therapy including for fatty liver disease which the company is exploring in collaboration with the Arizona Liver Health LivVita Study. If BTTX is able to apply its treatment to improve key biomarkers then BTTX could help the quarter of US adults suffering from non-alcoholic fatty liver disease – of which 70% are diabetes patients. Fatty liver disease has taken a toll on not only a human level, but across the healthcare system as well and BTTX is eager to meet the need created by a lack of effective, FDA-approved therapeutics.
If BTTX is able to emerge as a pioneer in the use of Prescription Digital Therapeutics for the treatment of cardiometabolic diseases, then BTTX could prove to be a worthwhile long-term investment. The competitive advantage established by BTTX’s four patent families covering treatment methods, medication management, as well as its platform’s systems and software, mean that BTTX will be at the forefront until its patents’ expiration in 2038. In light of this, BTTX has the potential for major growth as it explores these treatments.
However, financially BTTX has incurred some heavy expenses associated with its trials according it its latest annual report. Its research and development expenses alone increased to $19.4 million – up from $3.7 million in 2020. At the same time, BTTX increased its sales and marketing expenses to $2.3 million compared to $0.2 million in the previous year. Considering that BTTX is preparing to release BT-001 in 2023, its not surprising to see a ramp up in its expenses at this time.
Like most biotech stocks and pharma stocks, BTTX stock will likely move on binary events like FDA approval which some investors are bullish on considering the company’s updates and low float of 7.8 million. Furthermore, the global investment bank – Chardan Capital Markets – gave BTTX a buy rating with a price target of $17 during its IPO.
According to Chardan analyst Keay Naka:
“Better’s PDTs represent a new kind of cognitive behavioral therapy, they call nutritional-CBT, designed specifically to address the cognitive patterns and mental structures that drive dietary choices/habits and associated lifestyle behaviors, which are root causes of almost every cardiometabolic disease. The CBT sessions are delivered via a scalable and affordable mobile application used on smartphones and tablets. Better’s PDT’s are regulated by the FDA as medical devices, requiring FDA de novo authorization or 510(k) clearance (with a Class II predicate), which can be a quicker, less costly path to commercialization compared to a drug. We believe that lower regulatory risk is offset by higher commercial and reimbursement risk.”
Another catalyst worth mentioning for BTTX is the Access to Prescription Digital Therapeutics Act of 2022 which is a bipartisan piece of legislation intended to ensure that PDTs are covered by Medicare. This piece of legislation was introduced in the Senate where it remains with the Finance committee.
Media Sentiment
@Snatch_Trading notes that Chardan has raised its price target for BTTX stock
Technical Analysis
BTTX stock is currently trading at $1.57, having lost much of its momentum leading up to the fireside chat with BTTX’s CEO. It shows a support near 1.47 and resistance at 2.79. During the sell off on the 11th, BTTX became oversold but its RSI has recovered to 37. The MACD is bullish, but accumulation has taken a hit.
It appears that momentum died off during the Prescription Digital Therapeutics Half-Day Summit and BTTX fell back to its support level as a result. While this is a new low for BTTX which was listed as recently as late October 2021, BTTX stock could see a bounce back considering its low float and the potential for a De Novo classification in the future.
BTTX Stock Forecast
As the company continues the pivotal trials for its flagship PDT, BTTX could revolutionize the treatments for Type 2 Diabetes depending on the results. With other products in its pipeline as well, BTTX is well-positioned to explore the many uses for its nutritional-CBT treatment which may be easier to market than other treatments if given a De Novo classification. Given the demand for effective treatments for cardiometabolic diseases, BTTX stock may be one to watch for more updates and results as it works to launch BT-001 in 2023. Additionally, BTTX stock has heavy insider ownership which is a bullish indication of the company’s potential to become a profitable long-term hold.
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