Digital therapeutic company Pear announced its plans to go public via a $1.6 billion special purpose acquisition company (SPAC) merger with Thimble Point Acquisition Corp.

The new combined company will be called Pear Holdings Corp and traded on Nasdaq. Pear leadership will continue to head up the new combined entity. According to the companies, the combined business includes up to $276 million in funds located in Thimble Point's trust account, as well as $125 million in private investment in public equity.

In 2017, Pear's substance abuse disorder prescription digital therapeutic (PDT) ReSET made headlines when it landed an FDA de novo. Since then the company has cleared two more PDTs, one for opioid abuse disorder and another for insomnia. The Boston-based company has several more therapeutics coming down the pipeline.

“In our view, Pear is at a commercial inflection point, with the potential for rapid expansion. We believe this transaction will allow us to drive widespread usage of PDTs to treat major medical conditions and overcome significant barriers to patient care," Dr. Corey McCann, president and CEO of Pear, said in a statement.

The expected to close the second half of 2021.

WHY IT MATTERS

Founded in 2013, Pear Therapeutics has been quickly gaining steam for its PDTs. The company closed a $100 million Series D funding round in March for helping the company secure reimbursements for its products.

According to Pear, this new SPAC deal will provide the financing to grow its commercialization efforts for its FDA-cleared products and help it continue to research new products.

In terms of new products, the company has been testing a new schizophrenia PDT. However, in January Novartis published results from a 112-person clinical trial that found no difference between the Pear app and a placebo app in any outcome measurements. At the time, McCann said that the study was "disappointing" and that there were "methodological issues" not mentioned in the study.

In April, Pear inked a slew of deals to integrate more digital biomarkers and a digital pill into its platform.

THE LARGER TREND

Over the last year, SPACs have become a popular exit option for digital health startups. According to a Rock Health report that came out in April, more than 80% of digital health companies announcing a public exit in 2021 did so through a SPAC merger.

Some of the notable SPACs of 2021 thus far include 23andMe, Hims & Hers, Valo, Babylon, Science 37, Better Therapeutics, Owlet, Clover and Butterfly Network.