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Ep14: Corey McCann, CEO Pear Therapeutics


0:03 Eugene Borukhovich  

Welcome to the Digital Therapeutics Edition of Digital Health Today. I’m your host, Eugene Borukhovich. 

In the last episode, I had the pleasure to speak with Chris Bergstrom, president of AmalgamRx. What intrigued me about AmalgamRx and our discussion is that a new breed of DTx may not be a DTx at all, and the word digital may just disappear from the vernacular. 

In this episode, I’m excited to speak with Corey McCann, CEO and founder of Pear Therapeutics. Pear, in their own words, “operates at the intersection of biology and software technology, where researchers and clinicians work side-by-side with software engineers and developers to create the next generation of therapeutics.” But before we dive in, I briefly met Corey at a JPMorgan conference a few years back and enjoyed listening to his presentation. He and the team set out to build the “Genentech of digital therapeutics,” and they’re well on their way. Now we jump to my conversation with Corey. 

I’m here with Corey McCann, CEO of Pear Therapeutics. Welcome to the show, Corey. First of all, I would love for our listeners to get to know you as a person, a little bit of your background, and what brought you to start Pear Therapeutics back in the day.

1:21 Corey McCann  

Eugene, first and foremost, thank you for having me here, and thank you for the work that you’re doing around the digital therapeutic space. It’s an absolute pleasure on my side. 

So by way of a super quick personal background, I have a little bit of a non-traditional background for a digital health company or a digital health entrepreneur. I was a physician scientist originally, so trained as an MD PhD, did a lot of work in cellular and molecular neurosciences. If you google the term brainbow, you’ll see all sorts of cool pictures of multicolored neurons in different brain regions, so that’s what I did in my formative years.

I took a bit of a non-traditional course from there. I went to McKinsey, worked in their healthcare practice out of their New York office, and then I moved over to the venture-buy side, as they say. After that, first I was with a smaller firm by the name of RiverVest Venture Partners, and then more recently, I was with one of the larger healthcare firms called MPM Capital. 

I didn’t start out looking for digital health companies, I started out looking for biotech companies. The genesis of Pear was thinking about where there are opportunities “drugify” cognitive experience. I know that’s sort of a hoity-toity way to describe what we’re doing, but at the end of the day, there was this observation that we’ve done just about everything around molecules, but we have a pretty good sense that lots of diseases are treated and the brain changes and grows at the interface of molecules and activity patterns. Can you take those activity patterns and industrialize them and turn them into a therapeutic modality? 

I guess the rest is history. And we can talk through that stuff too, but that’s the brief origin story.

3:04 Eugene Borukhovich  

Cool. So first of all, I’m going to look at brainbow because you got me really curious about that. I think the genesis was partly that you guys were looking to “drugify” some of the digital therapies– I guess it was already starting to be called that way back in 2014, 2015. I’m curious–  the name Pear. Was it completely random? I’m sure you get asked this question, but I don’t think I’ve ever read that anywhere.

3:32 Corey McCann  

So I guess for my own personal delight. You don’t get to name companies fun things in biotech. They’re all very serious Greek-sounding things. So the idea of getting to name your company after a fruit was personally interesting for me. I think where this makes a little bit more sense is as we were first looking at this space, we saw a tremendous opportunity for drug-software combinations. What I mean is, places where pieces of software directly collect data to directly inform drug dose, amount, frequency, timing, and then marry that with digital therapeutic content to create some sort of an efficacy effect…but really creating these blended products. If you start to think about that world, there’s frankly a pretty stupid play on words, which is that we’re “pairing” drugs and software. Bring that together with the personal desire to name a company after a fruit, and here we are.

4:30 Eugene Borukhovich  

I just thought maybe you were trying to be like an Apple for digital therapeutics or something. That was my guess.

4:38 Corey McCann  

It’s another way to explain the same questions.

4:40 Eugene Borukhovich  

Yeah, fair enough. So I think you know I spent a number of years in a big pharma company, and I was driving some of the digital health initiatives in the earlier days. A drug pipeline has a pipeline, right? You’re doing experiments and you’re betting on a number of things. So instead of doing “onesey-twosey” efforts, you need a pipeline of digital– services, businesses, etc. I think you were either quoted or said something that you wanted to be the Genentech of DTx. What was the reasoning behind it? Educate our listeners on what that actually meant to you.

5:23 Corey McCann  

When I think about this space, I think there is a tremendous amount of value in scale. I think this is obviously a new space, and because it’s a new space, it’s a place where there’s just a ton of infrastructure to be built. I think that’s a tough thing to do as a one-off company. So everything that we’ve thought about has been with scale in mind, from our commercial products, to our pipeline, through to our platform (which is an end-to-end platform that allows you to deliver digital therapeutics), but it’s also from our capabilities. So having an engine to be able to discover, develop, and commercialize these products again, and again, and again. 

I’m not sure that I would put too much stock in the Genentech of digital therapeutics comment, but if you look at their trajectory, in 1985, they commercialized recombinant growth hormone, and that signaled the beginning of this whole new therapeutic modality. If you fast forward to their 2009 Roche acquisition, none of their products were the products that they started with. I mean, they were Avastin, RITUXAN, Herceptin. But these were all products that had been built from the physical platform and developed and commercialized via the company’s capabilities. 

When we think about the metaphor, it’s really to say we think that this is something big. When we do the bottom-up build, we think there are hundreds of opportunities to modify standards of efficacy with pieces of software. I know that sounds quite hyperbolic, but again, we think this is a big opportunity. The way to get there is to build infrastructure that you just wouldn’t build if you were commercializing a single asset.

7:07 Eugene Borukhovich  

I’m also curious to step back to the very early days, as you were at MPM and then got the concept idea of Pear. So I think it 2015-ish when you got started officially. What were the fundraising efforts? If we track back– I don’t want to get into the details of when and who started the name [digital therapeutics]– those were early days. You said it yourself. What were those fundraising efforts like? To explain what the heck it is– what’s the possibility, what’s the TAM?

7:40 Corey McCann  

Actually, we were out even in the earlier days. When we started looking at the space it was like 2011, 2012. In 2013, we incorporated, and I agree, I think one of the least interesting questions in the space right now is who invented the term digital therapeutics. But suffice to say, it was not common parlance when we were out fundraising our initial capital. 

What we tried to do very deliberately was bring in investors that we knew and trusted, so many of the investors we had worked with before. Many people out there have seen the product of bad board members, bad investors; if you’re trying to build something big, that’s the death knell. So we were really selective about the people. We were also really selective in trying to bring together a cross-disciplinary set of investors. It’s not to say that we thought that you go out and get the traditional biotech mafia, or you go out and go down Sand Hill Road and knock on doors; it was really to try to pick out who would be best to breed in each of those respective disciplines. And then this can’t be an investor that’s looking for a quick flip, it has to be someone that really understands that you’re trying to build a whole new industry, that there are hundreds of products to be created, and that isn’t going to hold you hostage for your six-month trajectory. 

If you imagine selecting on the basis of those criteria, you go from a rather large set of investors to a rather small set of investors. I think all of the investors that we brought in were poised to want to develop large stories. I think to that end, we didn’t get into a lot of conversations where we were haggling about billions of dollars on the TAM. I think that that wasn’t so much the point. But with all that said, we did find that we made lots and lots of tech investors uncomfortable with regulation, and lots of healthcare investors uncomfortable with the iterative nature of software. I think you wash, rinse, repeat– you have lots of those conversations the wrong way, and you wind up with a syndicate that, to this day, we’re very proud of.

9:52 Eugene Borukhovich  

For the entrepreneurs that are listening in, I think you said it best; at those early stages, you want partners to build this with. That’s the absolute key. We’ve heard about [inaudible] and board members, and all these things that go awry in these early stages. Since we’re still talking about money here, I’d love to touch base on your initial hypothesis. Let’s talk about the DTx business and how it evolved over time, up until now.

10:20 Corey McCann  

It’s probably more of an interesting story if there was a pivot. I think essentially the business that we built today is the business that we went after from day zero. What we set out to do was to de-risk the development of this new therapeutic class. We did that in a very methodical way, which is to say, can you first demonstrate that software can create drug-like efficacy? Can you then get that drug-like efficacy on label? Can you turn that label into something that prescribers will find value in and patients will find value in? And can you then institutionalize that to the point where payers are paying for this product-based vector? That’s what we’ve been looking at from day zero. I don’t think that we’ve really diverged from that.

Maybe one Asterix that I would put on the sentence is that, again, as we started up, we were thinking let’s go all in on the hardest stuff possible– let’s be building these drug-software combinations where you’re collecting physiological data to inform PRN dosing with a therapeutic layer. I think we all acknowledge that there’s a tremendous opportunity for those products, and we continue to build toward them in our pipeline, but our initial set of products turned out to be things which were a bit more de-risked (i.e. more toward the neural behavioral interventions). Again, we didn’t set out to say we’re modality specific; I think it’s just that when you’re thinking about managing a portfolio of different investment opportunities, you need some low risk stuff in there. That’s how we got moving down this neural behavioral direction.

12:00 Eugene Borukhovich  

What a perfect segue, because your thesis (to my knowledge) and the pipeline is all around changing behaviors and that you can alter the course of a disease by behavior change. We all know that this is so hard. Maybe we can chat a little bit about that and how you’re doing it (obviously without the magic secret sauce, and all the studies and all that). But behavior change is hard.

12:24 Corey McCann  

I think behavior change is really hard, and I think the traditional means of building behavior change-based products has been even harder. What I mean is that when I think about the industry that we stepped into in 2011, 2012, 2013, it was predicated on this notion that you can push different pieces of software to large populations of healthy normals; you can learn lots of things, you can iterate really quickly, and you can extrapolate like crazy, and then this product will work in different disease populations. I think that there’s some merit to that. I think in mental health there’s probably a lot of similarities between dysthymia and healthy normals (or in metabolic disorders, lots of similarities between obesity or hyperlipidemia and healthy normals), but I think the notion that we’ve tried to push is that if you’re going to go after high-cost, and frankly, disease populations, you basically need to start in those populations. So we’ve been some of the first that have done the dedicated, in-the-weeds, user-understanding, clinician-understanding building of products, in collaboration with these different patient populations.

In creating products, they’re just very, very specific. What that means is that the rates of engagement and the behavior change that you’re able to drive are remarkably higher than what’s been seen before. It also means that you can’t just take what you’ve learned from indication number one, and apply it to indication number two, three, and four, willy-nilly. I think that’s one of the parts of the secret sauce. 

I think another part of the secret sauce is embedding these products into clinical standard of care. So when we look at patients for whom these products are most successful in the real world, they’re patients where the clinician understands the value proposition, the clinician has prescribed [it] multiple times for multiple patients, and has a sense for how the product works in their workflow and in their practice. Then it’s patients where there’s this virtuous cycle where the clinician mentions to the patient that they will be monitoring their progress on the dashboard. They monitor their progress on the dashboard, there are conversations, and the patient is subsequently incented to engage even further. There’s something that’s magical about this prescription path, and I don’t think that you get full integration into a traditional medical paradigm without the degree of medical validation that comes with that path.

15:05 Eugene Borukhovich  

Part of this podcast is also to demystify what the heck is digital therapeutics, and what does that actually look like from an end-user/consumer/patient perspective. Maybe we can pick Somryst. Insomnia, I’m sure, is at the top of [people’s minds], so I think it’d be a great example to talk through.

15:26 Corey McCann  

Yeah, sure. Our Somryst product is the first product that we’ve launched via our remote care platform. Essentially what that means is that if I’m a patient with chronic insomnia, I can self identify, and I can engage with rich media. So think about it as being Facebook ads, banner ads, all of the things that you would expect to see as a consumer of a healthcare product or any other sort of product. There’s a click to learn more, and then an experience that looks very much like what you’d expect to see for any piece of consumer technology. There’s the opportunity to go to a telehealth visit. In that telehealth visit, the patient is screened (and there’s a whole set of pre-screening criteria, like what you would expect to see for a Hims or a Hers), but then there’s a live remote clinician encounter, where the clinician evaluates the patient, and then writes the prescription for the Somryst product. That starts a cascade where the patient is in touch with our Pear Connect facility, and ultimately, there is a dispensation of this prescription digital therapeutic or PDT product. Once the patient is on the product, Somryst is a nine-week prescription. 

Roughly speaking, there are two big therapeutic modalities at play here: one is something that’s called algorithmically-driven sleep restriction. There, the patient is walked through a whole bunch of recommendations on when to sleep and when not to sleep. It’s a little bit paradoxical in the insomnia space, but in many cases, sleeping less equates to sleeping more downstream. That’s the initial part of the product, and that’s all algorithmically driven. 

There’s a little bit of a transition in weeks two, three, and four to more traditional CBTI content, which is about helping the patient to understand their motives for treating their insomnia and some of the behaviors around bedtime, for example. 

The last phase is essentially the consolidation phase. So take all of the behaviors that we’ve worked on in weeks zero through six and turn them into something which is long lasting. I think it’s actually that last phase of the product that drives some of the crazy long-term efficacy data that we’ve seen. On label, there’s a six-month follow up after the nine-week script; that’s now been extended out to an 18-month follow up after the nine week script, which shows pretty significant impact on insomnia behavior in ways that you just wouldn’t expect to see for pharmacotherapies like benzodiazepines or like zolpidem.

18:14 Eugene Borukhovich  

You touched on the telemedicine visit, and obviously you are a PDT (or prescription digital therapeutic). Where do you see the role of doctors, nurses, and health coaches? Just like with a pill– the listeners will hear I hate the term of adherence–but there’s a level of adherence even to a digital therapy, right? Are you going to use it? Is that changing a behavior?

18:40 Corey McCann  

In the PDT model, the healthcare practitioner starts the cascade. They’re ultimately the prescriber. Again, because we’re dealing with what are (generally speaking) higher acuity patients, there is a human in the loop who is doing things like checking in to the dashboard in order to provide a backstop– and in many cases, have a [inaudible] clinical encounter. 

I think a good example would be for our reSET and reSET-O products. There you can find a human behavior counselor who will see the patient once a week, or once every two weeks, once every four weeks. If you imagine a 30- to 60-minute check in, most of that time is going to be about pets, and the weather, and sports, and just general small talk. Being able to dive right in and say, “I see that on Friday evening, you regularly experience increases in your cravings and triggers, and you seem to have issues with the module entitled ‘Dealing with Situations Involving Use'”– I think that’s the kind of leverage that we’re looking to bring to the clinician. 

I don’t see these things as being mutually exclusive. I think they certainly all work together. That said, when I think about my personal definition of this space, it is “software to treat human disease.” The distinctions that I would make are these are things that treat diseases and don’t address traditional health and wellness conditions. These are things where software is the curative agent, as opposed to a human counseling on top of a digital layer. I think once you start to think about that framework, you probably see some of these leverage tele-based businesses be very successful, PDTs be very successful, and I think you see consumer health and wellness apps also be very successful. But I think they are distinct verticals with distinct advantages.

20:41 Eugene Borukhovich  

I love it, because I always ask the same question: where’s the guest’s head on prescription digital therapeutic and the blending line of disease management 2.0? To a certain extent you already answered it, but I just want to get two more cents on it from you.

20:59 Corey McCann  

For better and for worse, there’s a lot of unmet need in this world. I’m confident that there’s enough unmet need that all of these business models will be highly successful. When I look three, four, or five years into the future, I think that what you’re going to see is all of these business models deployed at the very same time. I think COVID has shown us that in spades. I think you’re going to see patients who see a telemedicine clinician, and they see that telemedicine clinician once a quarter– maybe once a month. But I don’t think that capacity is going to change fundamentally in the next three to five years. Then there’s some sort of glue that sits in between those traditional telemedicine encounters, and I see that as the PDT. So when we look at the engagement, we see patients engaging every day with some of our products. It is that day-on-day engagement where I think you’ll be able to see safety and efficacy demonstrated in the real world, in what is a fully virtual context. Then you layer all of the virtual pharmacies on top of that, and you’re not leaving your home to be able to receive your medications as well.

22:09 Eugene Borukhovich  

Love that vision. If you think about what you described before as the consumer experience, you know the consumer and you know how they behave; you’re actually helping them with behavior change. In that future world, does a DTx company like yourself “swallow a pill inside” if needed, to augment the digital therapy? Or once you guys grow enough, will a pharma company in the same space potentially acquire you and swallow you? There’s no right or wrong answer, as always, but I’m just curious where your thoughts are on it.

22:51 Corey McCann  

Ironically– and this is something I would have never seen– there’s been a whole cottage industry that sprung up around speculating upon this very question. I’ll be very humble and say I don’t know. 

What we’re trying to build is a fundamental pillar of healthcare. When I think about digital therapeutics, I think about them on par in import with things like medical devices or pharmaceutical products. Whether it is digital therapeutics that drive the pharma industry, or the pharma industry that drives digital therapeutics, insofar as patients are impacted, I think those are both fine outcomes. 

If we think about what we’re seeing today, I think that pharma is coming to understand that drugs need a digital layer. It’s a little bit silly to think that a product as sophisticated as a gene therapy would not collect real time data about its end user. That’s just absurd. And it’s even more absurd when you think about the price of some of these products. So whether pharma wants to do it for the patient or not, they’ll be doing it for the payer very soon. I think you’re starting to see that degree of convergence. 

I think you’re also starting to see pharma think differently about the value of digital monotherapies in their pipeline. We’re still in the part of the industry where it’s better to be a consultant than anything else, because all of these pharma companies get a new strategy every quarter. It’s very much TBD. You hear some pharma companies come out and say, “we’ve got a new strategy,” or in monotherapies, “we’re really interested,” and then the strategy is different in a quarter. I think that’s a trend which is going to take a little bit more time.

24:29 Eugene Borukhovich  

I know for probably a nanosecond you put your old McKinsey hat back on. We touched on pharma, and I don’t want to dwell on what happened with Sandoz, but as an entrepreneur-to-entrepreneur discussion, [what are some] key lessons learned for the next breed of trailblazers in this space?

24:56 Corey McCann  

First and foremost, we’ve had and we continue to have a strong relationship with Novartis. They were investors in the company long before the Sandoz partnership, and they remain investors in the company. 

As we just discussed, I think there’s a tremendous opportunity for pharma to bring value to the DTx business, and in that context, there was a time when Sandoz was very aggressively moving away from being a traditional small molecule generics player. It made a lot of sense for Bayer and Sandoz to think about a partnership. It was a really, really interesting experience to be able to see parallel teams work on the same problems. People in tech love to AB test; this is almost organizational AB testing. It was a period of time for Pear where we learned incredibly quickly from seeing what worked, and in many cases, what didn’t work. 

If I try to crystallize all of that learning into something which is vaguely interesting for a podcast, it’s all about speed of turns. When you think about a tech business, they make product changes so quickly that humans (in many cases) are taken out of the loop, and it’s basically all a computational exercise. When you look at the pharma business, in many cases, they develop products once every 20 years. The PDT business is going to live somewhere in between, but it’s going to be closer to the tech side of the spectrum than the traditional biotech side. 

So thinking about how you create an organization that makes a breakfast mistake, a lunch mistake, and a dinner mistake– none of which are terminal mistakes, but all of which helped to move the organization forward in the next day– that’s what’s going to make companies in our space succeed or fail. That is very, very different from the way that pharma operates. 

If you want to think about one painfully obvious example, in the pharma commercial world, there’s this thing called MRC, or material review committee. What MRC does is it thinks about all of the communication materials you can use around your commercial products. A traditional pharma MRC may meet quarterly (everybody says they meet more than quarterly, but a lot of those meetings get cancelled) and it’s not a living, breathing process. These are regulated products. So you got to run through an MRC, but that MRC almost has to run daily. If you can think about the organizational change that it would take for a little company to come in and say, “you guys are going to run MRC every day,” you can imagine that there’s a little bit of conflict inherent in those positions.

27:34 Eugene Borukhovich  

Absolutely. Well, it’s time for a question from my journalistic partner on this podcast, Brian Dolan, who is the founder of Exits & Outcomes, and as I like to call him, the digital health detective. Let’s see what question Brian has for our guest today.

28:00 Brian Dolan  

Okay, here’s my question. In this one, I’m going to ask you to look ahead. So in five years’ time, what do you predict reimbursement will look like for prescription digital therapeutics? And if you had to pick, what’s the most important thing that has to happen between now and then, for that prediction to come true?

28:20 Corey McCann  

Thanks, Brian, that’s a great question and not surprisingly, one that we think about a lot at Pear. In five years, I think you’ll have PDT products across a whole host of indications. In many of those indications, these products will be standard of care, and I think you’ll have those products propped up by robust platforms that address things like prescribing, data collection, and many of the workflow issues that we see today. If you think about that industry, and that view of the five-year future, this is a place where payers will demand prescription digital therapeutic products, because many of these products will be priced lower than the medical value that they create. Not providing access for these products is going to be leaving money on the table.

I’m very bullish on the future state of the org. I think that shouldn’t be terribly surprising. I think if you want to get down into the weeds on the tactics of how we get from where we are to steady state reimbursement, there’s a whole question around benefit designation. I think five years from now, you will continue to see these products reimbursed as a hybrid pharmacy and/or medical benefit, and that’s very much like what the drug world looks like as well. There are lots of drug products that get paid for as medical benefits, so I don’t think there’s anything wrong or surprising about that, but I do you think that you’ll see a good deal of hybrid benefit types. 

I think you’ll also see different PBMs play differently. You’ve seen it already. You’ve seen some of the PBMs go very much toward the health and wellness market, and you will continue to see some of the PBMs move more into the PDT direction. So I think unlike drugs, there’s going to be a little bit more PBM specialization. 

But everybody is going to want to be pulling these products through a value-based agreement, and I think VBAs are (and this is from someone who’s in the trenches) a little bit difficult to implement. People don’t like to implement them as much as they’d like to talk about them. I really see PDTs as a product that creates enough data that it makes VBAs user-friendly. So I’m very, very bullish on VBAs in the space. 

This has turned into a little bit of a long-winded answer, but you asked what’s the killer item. We’re in a place where we need a federal benefit type for prescription digital therapeutics, and there’s a whole conversation around specifically how would fee-for-service Medicaid pay for the products. There’s a straight shot on Medicaid, there’s a straight shot on some Medicare, but fee-for-service Medicare is currently boxed out, so in the near term, that’s where we’ve been pushing legislation. I think that’s the binary moment that allows these products to flourish, from a reimbursement perspective.

31:16 Eugene Borukhovich  

I always rely on Brian’s tough questions. And I think he took it easy on you, because that was more of the future looking, which like you said, there’s a little bit of a cottage industry there. We started with you, and part of this podcast is actually getting to know the people behind the brand name (in your case, Pear). I would love to end this with what is your why, and what gets you up in the morning?

31:41 Corey McCann  

I love to solve problems, I love to build things, and I love to do it with amazing people. That’s my Shangri La. I think about the ability to create a new product class of software to treat human disease, which is on one hand, incredibly out there and so science fiction-y that lots of people don’t even know what you’re talking about. Yet, on the other hand, it is incredibly deeply rooted in the blocking and tackling of healthcare, like reimbursement mechanisms. That’s just fun to me. I think if I wasn’t doing this, I’d probably be doing something very much like it. This is just a really cool experience for me.

32:22 Eugene Borukhovich  

Awesome. Well, listen, it was a pleasure having you on this podcast, and thank you for spending the time and educating all of us.

32:29 Corey McCann  

Thank you for including me, really appreciate it.

32:33 Eugene Borukhovich  

Thanks so much for tuning into the Digital Therapeutics Edition of Digital Health Today, a production of Mission Based Media. Be sure to hit that subscribe button to this podcast on your favorite podcast player, so you’re then automatically notified when we post our upcoming episodes, where I speak with dozens of leaders and trailblazers who are forging the path for digital therapeutics. If you’d like to learn more about YourCoach Health or Brian Dolan’s Exits & Outcomes, you can always find the links to this and more in the show notes for this episode. You can connect with me personally on Twitter @HealthEugene, or follow my journey of writing my first book, Hard Pill to Swallow at [email protected].

I’m Eugene Borukhovich, catch you next time.


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