Transaction values Better Therapeutics at a pro
forma fully diluted enterprise value of approximately $187 million
with existing Better Therapeutics shareholders rolling over 100% of
their equity into equity of the combined company
Transaction expected to provide up to $113
million of cash proceeds, including a fully committed $50 million
PIPE and up to $57.5 million of cash held in the Mountain Crest II
trust account assuming no redemptions
The PIPE was led by Farallon Capital
Management, RS Investments, Sectoral Asset
Management, and Monashee Investment Management, with
participation from other undisclosed investors
Better Therapeutics also received commitments
through a separate private placement of $6 million
Transaction is expected to close in the summer
of 2021, with the combined company expected to trade on the Nasdaq
Capital Market under the symbol “BTTX”
Better Therapeutics, Inc. a prescription digital therapeutics
company delivering cognitive behavioral therapy to address the root
causes of cardiometabolic diseases, will go public, raising up to
$113 million to advance its robust pipeline of products to treat
cardiometabolic diseases, conditions which cost the U.S. healthcare
system almost $500 billion each year. Better Therapeutics has
entered into a definitive merger agreement with Mountain Crest
Acquisition Corp II (Nasdaq: MCAD; “Mountain Crest II”), a publicly
traded special purpose acquisition corporation or SPAC. The
transaction values Better Therapeutics at a pro forma fully diluted
enterprise value of approximately $187 million with existing Better
Therapeutics shareholders rolling over 100% of their equity into
equity of the combined company. Upon completion of the transaction,
which is anticipated in the summer 2021, the combined company will
operate as Better Therapeutics and securities are expected to be
listed on Nasdaq under the symbol “BTTX.”
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The transaction includes a $50 million private investment in
public equity (PIPE) from leading healthcare investors and thought
leaders that are led by Farallon Capital Management, RS
Investments, Sectoral Asset Management, and Monashee Investment
Management, with participation from other undisclosed investors.
Better Therapeutics has also received commitments through a
separate private placement of $6 million.
The proceeds of the transaction will be used to advance Better
Therapeutics’ lead product for the treatment of type 2 diabetes,
BT-001, to marketing authorization by the U.S. Food and Drug
Administration and advance Better Therapeutics’ pipeline of
prescription digital therapeutics for a range of cardiometabolic
diseases.
Better Therapeutics Overview
Better Therapeutics has created a platform for the development
of prescription digital therapeutics (PDT) for the treatment of
diabetes, heart disease and other cardiometabolic conditions. The
Better Therapeutics platform blends clinical, behavioral and
psychological inputs into a series of therapy lessons and
skill-building modules designed to isolate and shift the underlying
thoughts and beliefs which guide diet and lifestyle behaviors that
are the root causes of a wide range of cardiometabolic diseases.
The delivery of behavioral therapy enables changes in neural
pathways of the brain and leads to behavioral change. These
therapies and the resulting changes hold the potential to lower
healthcare costs to treat these conditions and improve patient
health.
Better Therapeutics’ first PDT (BT-001) is being evaluated in a
pivotal trial as a treatment for type 2 diabetes used under
physician supervision. It is anticipated that following marketing
authorization, primary care providers will prescribe, and insurers
will reimburse Better Therapeutics’ PDTs much like they would a
traditional medication.
Management Comments
David Perry, Co-founder and Executive Chairman of Better
Therapeutics commented, “Today, 34 million people in the U.S. have
been diagnosed with type 2 diabetes and another 88 million are
considered prediabetic. We believe we have an immense opportunity
to fundamentally change the treatment paradigm for these
individuals with our PDT platform. Multiple studies published in
peer-reviewed medical journals support our proposition that our
digital therapeutics have the potential to improve blood glucose
and HbA1c levels similar to drug therapies. We believe that by
addressing the underlying causes of disease, our products have the
potential to improve patient health while reducing treatment
costs.”
Kevin Appelbaum, Co-founder and Chief Executive Officer of
Better Therapeutics, added, “This is a unique time to build a
company like Better Therapeutics. Patients, doctors and insurers
have grown increasingly comfortable with digitally delivered
solutions, including prescription digital therapeutics, and we are
uniquely positioned to change the way some of the most prevalent
and costly diseases are treated.”
“I am thrilled to take the second Mountain Crest SPAC to the
next phase of our deal process, and the founding team at Better
Therapeutics has a track record of creating successful companies by
focusing on large and disruptive market opportunities,” said Dr.
Suying Liu, Chairman and Chief Executive Officer of Mountain Crest
II. “We are excited to partner with them to accelerate the
development and commercialization of the Better Therapeutics
platform, which aims to deliver life changing outcomes to
patients,” Dr. Liu continued.
Key Transaction Terms
The transaction, which has been unanimously approved by the
Boards of Directors of Better Therapeutics and Mountain Crest II,
is subject to approval by the Better Therapeutics’ stockholders,
Mountain Crest II’s stockholders and other customary closing
conditions. The proposed business combination is expected to be
completed in the summer of 2021.
A more detailed description of the transaction terms and a copy
of the definitive merger agreement will be included in a Current
Report on Form 8-K to be filed by Mountain Crest II with the United
States Securities and Exchange Commission ("SEC"). Mountain Crest
II will file a registration statement (which will contain a joint
proxy statement/prospectus) with the SEC in connection with the
transaction.
Advisors
Cowen is acting as exclusive financial advisor and capital
markets advisor to Better Therapeutics. Lake Street is also serving
as a capital markets advisor. Goodwin Procter LLP is acting as
legal counsel to Better Therapeutics in the transaction. Chardan is
acting as exclusive M&A advisor and financial advisor to
Mountain Crest II. Loeb & Loeb LLP is acting as legal counsel
to Mountain Crest II. Cowen is acting as sole placement agent to
Mountain Crest II on the PIPE. Shearman & Sterling LLP is
acting as legal counsel to the placement.
Investor Presentation
A prerecorded presentation made by the management teams of both
Better Therapeutics and Mountain Crest II regarding the transaction
will be available on the website of Better Therapeutics at
www.BetterTx.com. Mountain Crest II will also file the presentation
with the SEC in a Current Report on Form 8-K, which will be
accessible at www.sec.gov.
About Better Therapeutics
Better Therapeutics is a prescription digital therapeutics (PDT)
company delivering a novel form of behavior-based therapy to
address the root causes of cardiometabolic diseases. Better
Therapeutics has developed a proprietary platform for the
development of FDA-regulated, software-based therapies for type 2
diabetes, heart disease and other conditions. The cognitive
behavioral therapy delivered by Better Therapeutics’ PDT enables
changes in neural pathways of the brain so lasting changes in
behavior become possible. Addressing the underlying causes of these
diseases has the potential to dramatically improve patient health
while lowering healthcare costs. Better Therapeutics’ PDTs are
intended to be prescribed by physicians and reimbursed like
traditional medicines. For more information, visit:
bettertx.com
About Mountain Crest Acquisition Corp. II
Mountain Crest Acquisition Corp. II is a blank check company
formed for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business
combination with one or more businesses. Mountain Crest II 's
efforts to identify a prospective target business will not be
limited to a particular industry or geographic region, although the
company intends to focus on operating businesses in North
America.
Important Information about the Proposed Business Combination
and Where to Find It
In connection with the proposed business combination, Mountain
Crest II will file a registration statement on Form S-4 containing
a proxy statement/prospectus (the “Form S-4”) with the Securities
and Exchange Commission (the “SEC”). The Form S-4 will include a
proxy statement to be distributed to holders of Mountain Crest II’s
common stock in connection with Mountain Crest II’s solicitation of
proxies for the vote by Mountain Crest II’s shareholders with
respect to the proposed transaction and other matters as described
in the Form S-4, as well as the prospectus relating to the offer of
securities to be issued to Better Therapeutics’ stockholders in
connection with the proposed business combination. After the Form
S-4 has been filed and declared effective, Mountain Crest II will
mail a definitive proxy statement, when available, to its
stockholders. Investors and security holders and other interested
parties are urged to read the Form S-4, any amendments thereto and
any other documents filed with the SEC carefully and in their
entirety when they become available because they will contain
important information about Mountain Crest II, Better Therapeutics
and the proposed business combination. Additionally, Mountain Crest
II will file other relevant materials with the SEC in connection
with the business combination. Copies of these documents may be
obtained free of charge at the SEC's web site at www.sec.gov.
Securityholders of Mountain Crest II are urged to read the Form S-4
and the other relevant materials when they become available before
making any voting decision with respect to the proposed business
combination because they will contain important information. The
information contained on, or that may be accessed through, the
website referenced in this press release is not incorporated by
reference into, and is not a part of, this press release.
Participants in the Solicitation
Mountain Crest and Better Therapeutics and their respective
directors and executive officers may be deemed participants in the
solicitation of proxies with respect to the proposed business
combination under the rules of the SEC. Securityholders may obtain
more detailed information regarding the names, affiliations, and
interests of certain of Mountain Crest’s executive officers and
directors in the solicitation by reading Mountain Crest’s Form S-4
and other relevant materials filed with the SEC in connection with
the proposed business combination when they become available.
Information about Mountain Crest II’s directors and executive
officers and their ownership of Mountain Crest II common stock is
set forth in Mountain Crest II’s annual report on Form 10-K for the
year ended December 31, 2020, dated March 30, 2021 , as modified or
supplemented by any Form 3 or Form 4 filed with the SEC since the
date of that filing. Other information regarding the interests of
Mountain Crest II’s participants in the proxy solicitation, which
in some cases, may be different than those of their stockholders
generally, will be set forth in the Form S-4 relating to the
proposed business combination when it becomes available. These
documents can be obtained free of charge at the SEC's web site at
www.sec.gov.
Better Therapeutics and its directors and executive officers may
also be deemed to be participants in the solicitation of proxies
from the stockholders of Mountain Crest II in connection with the
proposed business combination. A list of the names of such
directors and executive officers and information regarding their
interests in the proposed business combination will be included in
the Form S-4 for the proposed business combination.
Non-Solicitation
This press release shall not constitute a solicitation of a
proxy, consent, or authorization with respect to any securities or
in respect of the proposed business combination. This press release
shall also not constitute an offer to sell or the solicitation of
an offer to buy any securities, nor shall there be any sale of
securities in any states or jurisdictions in which such offer,
solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended, or an exemption therefrom.
Forward-Looking Statements
Certain statements made in this press release are
"forward-looking statements" within the meaning of the safe harbor
provisions under the United States Private Securities Litigation
Reform Act of 1995, including statements about the parties’ ability
to close the proposed business combination and related
transactions, the anticipated benefits of the proposed business
combination, and the financial condition, results of operations,
earnings outlook and prospects of Mountain Crest II and/or the
proposed business combination and related transactions and may
include statements for the period following the consummation of the
proposed business combination and related transactions. In
addition, any statements that refer to projections (including
EBITDA, adjusted EBITDA, EBITDA margin and revenue projections),
forecasts or other characterizations of future events or
circumstances, including any underlying assumptions, are
forward-looking statements. Forward-looking statements are
typically identified by words such as “plan,” “believe,” “expect,”
“anticipate,” “intend,” “outlook,” “estimate,” “forecast,”
“project,” “continue,” “could,” “may,” “might,” “possible,”
“potential,” “predict,” “should,” “would” and other similar words
and expressions, but the absence of these words does not mean that
a statement is not forward-looking.
The forward-looking statements are based on the current
expectations of the management of Mountain Crest II and Better
Therapeutics, as applicable, and are inherently subject to
uncertainties and changes in circumstances and their potential
effects and speak only as of the date of such statement. There can
be no assurance that future developments will be those that have
been anticipated. These forward-looking statements involve a number
of risks, uncertainties or other assumptions that may cause actual
results or performance to be materially different from those
expressed or implied by these forward-looking statements including:
risks related to Better Therapeutics’ strategies and its PDTs, such
as the willingness of the FDA to approve PDTs and insurance
companies to reimburse their use; the ability to complete the
proposed business combination due to the failure to obtain approval
from Mountain Crest II’s stockholders or satisfy other closing
conditions in the definitive merger agreement; the amount of any
redemptions by existing holders of Mountain Crest II’s common
stock; the ability to recognize the anticipated benefits of the
business combination; other risks and uncertainties included under
the header “Risk Factors” in the registration statement on Form S-4
to be filed by Mountain Crest II, in the final prospectus of
Mountain Crest II for its initial public offering dated January 7,
2021 and its annual report on Form 10-K for the year ended December
31, 2020; and in Mountain Crest II’s other filings with the
SEC.
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Heidi Chokeir, Ph.D. heidi.chokeir@canalecomm.com +1 619 203
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