Pear is looking to expand on its portfolio of digital
therapeutics with a treatment for postoperative pain. To date, all of Pear's
treatments have been based on smartphone-based modules, but its latest
candidate uses a VR headset.
"We think this is a large market opportunity that may
rapidly adopt an approved solution shown to reduce pain and opioid
reliance," the BTIG analysts wrote in Wednesday's research note.
The analysts added that the STeP designation was "an
important win" for Pear, and "in the right direction to expand its
platform beyond psychiatry into market adjacencies such as neurology."
Pear's stock rose nearly 8% on the news Wednesday, but was down
slightly in Thursday morning trading.
The company acquired two digital therapeutics intended to
treat acute and chronic pain from Firsthand Technology in 2020. The products
use a combination of distraction, physical engagement, mindfulness and biofeedback
using wearable sensors for pain relief.
Pear and Firsthand struck an agreement in which Pear will
pay a one-time milestone payment in the mid-six figures after the first
commercial sale of an FDA-cleared product, as well as a percentage of net sales
in the low-single digits in royalties, the BTIG analysts noted.
There's already a precedent in using virtual reality for
pain relief. Last year, the FDA granted de novo clearance to EaseVRx. The
VR-based software uses deep breathing and other cognitive-behavioral
therapy-based skills to treat chronic lower back pain.
After going public last year, Pear aims to increase its
revenue 30-fold by 2023, based on expectations that more insurers will cover
its products, and more physicians will write prescriptions. However, it remains
to be seen whether they will be able to achieve these goals, or sustain the
costs that come with developing a new class of treatments.