Click Therapeutics Files for IPO Following $52M Series B to Advance Prescription Digital Therapeutics Platform

Less than a year after its last debt financing, digital therapeutics startup Click Therapeutics recently announced that it had raised $52 million in Series B funding.

This funding round was co-led by new investors H.I.G. BioHealth Partners and Accelmed Partners II, with participation from Health Catalyst Capital, Revelation Partners, and a top-tier biotechnology hedge fund, as well as existing investors Sanofi Ventures, K2 HealthVentures, Hikma Ventures, and Ridgetop Health.

David Benshoof Klein, CEO and Co-Founder of the company, described this round of financing as a “significant milestone” and revealed that the funds will be used to accelerate the development and commercialization of Click’s internal pipeline of prescription digital therapeutics, while enhancing its platform capabilities.

This New York-based startup, founded in April 2012, is dedicated to providing patients with digital prescription therapy solutions through the development and commercialization of software.

Click Therapeutics translates literally into Chinese as “Click Therapy.” The company’s name is highly evocative and aligns well with its product: patients and physicians interact via a mobile application, enabling the use of digital therapeutics to treat diseases.

Image source: Click Therapeutics official website

The company began by helping “smokers” quit smoking, and after launching its first product and achieving commercialization, it rapidly expanded its product capabilities into disease areas such as major depressive disorder, insomnia, and schizophrenia.

According to Click Therapeutics, these therapies can be prescribed as standalone products or used in combination with medications or other therapies.

When discussing the distinction between digital therapeutics and other health applications, CEO David B. Klein stated that while other health apps are akin to supplements such as vitamin C, clinically validated and regulatorily authorized digital therapeutics are comparable to prescription medications prescribed by physicians.

Progress of Click Therapeutics’ Product Pipeline. Image source: Click Therapeutics official website

The company’s most representative product is Clickotine, a one-stop digital smoking cessation program. It was Click Therapeutics’ first product and remains its most commercially successful offering to date.

Clickotine was co-developed by Click Therapeutics in partnership with PBM and Magellan Health, with support from physicians and data scientists. It digitally deploys smoking cessation strategies, such as teaching users breathing exercises to manage cravings, enabling them to log their smoking habits and emotions to foster honest self-reflection on their behaviors and inner states, and sending motivational messages, among other features.

In terms of operation, Clickotine is very simple to use. Users need to download the Clickotine app on their smartphones, enter the client ID code provided by doctors, enterprises, or other organizations, and truthfully complete a questionnaire focused on U.S. clinical practice guidelines based on their individual circumstances. Clickotine will then develop a personalized smoking cessation plan based on the information provided, initiating the journey to quit smoking.

During use, Clickotine monitors users’ progress in real time. The questionnaires previously completed reappear during the usage process to remind users of their goals and help them overcome nicotine cravings and feelings of apprehension through evidence-based strategies.

Image source: Clickotine product instructions

From a commercialization perspective, Clickotine collaborates with insurance companies, enterprises, and healthcare providers to help users improve their health outcomes and reduce medical costs. For instance, Magellan Health, a prominent U.S. behavioral health insurer, was among the first investors in Click Therapeutics and remains one of its largest partners. Additionally, corporate clients can calculate the return on investment (ROI) and cost savings associated with adopting the smoking cessation app, based on factors such as company size, employee participation rates, and key human resources metrics.

In addition, Click Therapeutics has jointly developed a digital therapeutic for depression with Otsuka Pharmaceutical and is conducting a pivotal trial. The two companies are recruiting 540 participants for a 12-week study to evaluate the safety and efficacy of the digital therapeutic in adults taking antidepressant medications.

In 2020, Click Therapeutics signed a collaboration agreement valued at over $500 million with Boehringer Ingelheim, a renowned century-old German pharmaceutical company, to jointly develop and commercialize digital therapeutics for schizophrenia. The therapy, designated CT-155, is based on human cognitive and neurobehavioral mechanisms, encouraging patients to modify their behaviors and mitigate cognitive deficits.

Meanwhile, Click Therapeutics is also conducting research on treatments for chronic pain, cardiometabolic disorders, and autoimmune diseases.

Click Therapeutics’ team is an experienced and diverse cross-functional team composed of engineers, designers, data scientists, product managers, clinicians, scientists, and privacy and regulatory experts.

Its core team includes CEO David Benshoof Klein, CFO Randall Stanicky, CTO Han Chiu, and CSO Austin C. Speier.

CEO David Benshoof Klein graduated from Brandeis University. He previously served as Managing Director at Opus Point Partners, an investment advisory firm specializing in healthcare and life sciences, where he provided strategic consulting to more than ten life sciences companies. He possesses extensive experience in corporate management and operations.

CFO Randall Stanicky holds a Bachelor of Science in Business from Columbia University and has over 20 years of extensive industry experience, having worked at RBC Capital Markets, Canaccord Genuity, and Goldman Sachs. He currently serves on the Board of Directors of the Children’s Cancer Foundation, where he is an officer and Chair of the Audit Committee.

CTO Han Chiu graduated from New York University with a Master’s degree in Computer Science. He has previously worked at WeWork, Namely, Shutterstock, and American Express, consistently remaining at the forefront of engineering development with extensive expertise in software development and product design.

CSO Austin C. Speier, a Harvard University graduate, previously established and implemented portfolio strategies for Click Therapeutics’ digital therapeutics pipeline and strategic support initiatives.

VCBeat has observed that digital therapeutics have gained increasing popularity among digital health and pharmaceutical companies in recent years.

In addition to Otsuka Pharmaceutical and Boehringer Ingelheim mentioned above, international pharmaceutical giants such as Novartis, Roche, Sanofi, and Merck & Co. have also joined hands with digital therapeutics companies.

Collaboration Map Between the World’s Top 10 Pharmaceutical Companies and Digital Therapeutics Firms/Institutions, Source: Health界 Research Institute

Why Are Pharmaceutical Companies “Favoring” Digital Therapeutics Firms? VCBeat Summarizes the Following Four Points:

1. The wave of intelligence is sweeping the globe.The widespread adoption and use of smartphones, tablets, and healthcare applications have laid the foundation for the development of digital therapeutics.

2. The Impact of the Global COVID-19 Pandemic.The changes brought about by the black swan event of the COVID-19 pandemic are undoubtedly immense at present, making digital therapeutics more important than ever before.

3. Market supply and demand.According to Insider Intelligence, the global digital therapeutics market is projected to reach $56 billion by 2025. No one can resist the temptation to get a share of the pie.

4. Pharmaceutical Companies Seek a Second Growth Curve.In the traditional healthcare industry, market conditions, regulatory oversight, and inter-company competition are becoming increasingly stringent. By partnering with digital therapeutics (DTx) companies, pharmaceutical firms can not only mitigate pressure from competing products by bundling DTx into their treatment regimens but also, for those with limited drug pipelines, use DTx as a product supplement to diversify away from the commercial risks associated with a narrow portfolio, thereby enhancing competitive advantage and enriching revenue models.

In summary, pharmaceutical companies’ enthusiastic embrace of digital therapeutics firms is not only an inevitable trend in the wave of digitalization but also a key strategy for unlocking their own second growth curve.

Having examined the international landscape, we now turn our attention back to China.

In November 2020, Shangyi Information Technology’s Shukang APP received marketing approval from the National Medical Products Administration (NMPA), becoming China’s first digital therapeutic and ushering in the era of digital therapeutics in China.

Leveraging China’s unique internet ecosystem, the era-specific dividends of its digital infrastructure, and policy support, the development of digital therapeutics in China has been “riding the wind with ease, soaring high in one leap.”

According to VCBeat’s “White Paper on Digital Therapeutics in China 2.0,” as of September 2021, there were 73 digital therapeutics companies in China, including those without medical device registration certificates, categorized into eight major types based on primary indications.

Panoramic Map of China's Digital Therapeutics Companies in 2021

Image source: VCBeat "China Digital Therapeutics White Paper 2.0"

Digital therapeutics in China began to gain attention in 2020. After nearly a year of development, 15 digital therapeutic products (including medical device software for visual function training and cognitive impairment training) have been approved by the NMPA for market launch as of now.

Image source: VCBeat, "White Paper on Digital Therapeutics in China 2.0"

To learn more about the development of digital therapeutics in China and their future evolution trends, please scan the QR code below.

References:

1. NICOLE ORAN<Magellan launches digital smoking cessation program>

2. ELISE REUTER<Click Therapeutics raises $52M, looks to advance digital therapeutics>

3. Dave Muoio<Boehringer Ingelheim, Click Therapeutics ink $500M+ digital therapeutics development, commercialization deal>

4. Andrea Park<With Sanofi still on board, Click Therapeutics closes $52M series B for digital therapeutics in depression, chronic pain and more>

5. <Clickotine, A Personalized Smartphone App for Smoking Cessation: Initial Evaluation>

6. businesswire<Click Therapeutics Awarded National Institutes of Health (NIH) Grant for Clickotine® Digital Therapeutic Study>

7. Hou Zhancai, “US-China Digital Health Watch: The Innovation Path of Established Digital Therapeutics Company Click Therapeutics”