Better Therapeutics, Inc.

across the different PDT players are, in many cases, quite different. And I'll take this opportunity to underscore key points of differentiation for better therapeutics, which we believe will drive our ability to gain traction with payers, providers, and patients over the long term. The first and perhaps most important point of differentiation is our therapeutic area of focus. Our current development candidates are intended to treat cardiometabolic diseases, including type 2 diabetes, hypertension, hyperlipidemia, non-alcoholic fatty liver disease, or NAFLD, non-alcoholic fatty hepatitis, or NASH, and chronic kidney disease. We deliberately chose cardiometabolic diseases as our initial target because they, A, share the same lifestyle behaviors as a common root cause, B, rank among the most prevalent and costly chronic diseases that are largely reversible and preventable, presenting opportunities for transformative impact. And C, represent areas of significant unmet clinical need because currently available drugs are often expensive and predominantly treat symptoms, typically resulting in disease progression and more costly healthcare interventions over time. Second is the treatment landscape. Our focus on cardiometabolic diseases, and in particular diabetes, offers access to very large patient populations with high cost of care burdens driving an urgency to act on the side of health systems and payers. In talking with payers for more than a year now, and also validated by numerous third-party research studies, diabetes is a top priority as disease prevalence continues to grow and costs are escalating. Meanwhile, we're not seeing significant improvements in patient outcomes. Furthermore, current diabetes treatment guidelines already call for behavior change as the foundation of treatment, even stating in recent updates that digital health interventions may be useful as an adjunct to standard care to improve diabetes management. We believe this will help with provider adoption as we don't need to change ideas about treatment or the way that it is delivered. Moreover, most drugs are indicated to be used in conjunction with behavior change. And we believe this allows for a more natural and seamless introduction and further adoption of PDTs in the diabetes indication. Third is the significance of the clinical endpoint used in our pivotal trial. not only is the reduction of hemoglobin a1c a universally accepted clinical endpoint for type 2 diabetes by providers and payers alike it is also widely accepted as a proxy for future events in diabetic patients as you know the same endpoint is also used in drug trials and our exploratory endpoints collected data across a broad range of additional health outcome measures providing further clinical evidence for the health impact of our PDT. The initial health economic data shows promising potential cost offsets derived from the utilization of our therapy. And finally, our PDT platform as currently developed is designed to have broad utility and enable rapid expansion across multiple related disease states. This potential for rapid expansion stems from the fact that the underlying root cause behaviors are largely the same for most cardiometabolic conditions. And hence, the behavioral health interventions delivered by our platform to treat these conditions are also largely the same. This is fundamentally different from a traditional pharmaceutical drug approach, where the products to treat different diseases are usually distinct with unique mechanisms of action. I will now recap our accomplishments in the first quarter of this year. We took a number of actions in Q1 to enhance our financial position and ensure the long-term success of the company. This included, among others, a reduction in force, coupled with other cost-saving measures, as well as a 6.5 million private placement in April. Combined, these measures were targeted to extend our cash runway till the end of September, allowing us to potentially reach several important milestones that we expect will further substantially enhance our financial position. These include potential FDA authorization for BD001, as well as a potential BD partnership and or a royalty monetization transaction. Throughout the first quarter of this year, we had multiple rounds of interactions with the FDA regarding our de novo submissions. We highlighted on our last earnings call the request for additional information received as a typical part of the de novo process, and guided that we expected to respond to the FDA by mid-April. We're happy to report that we submitted our response on April 17th, and the agency confirmed the review is progressing. We believe we are on track to receive the FDA's decision by the middle of this year. We also made substantial progress in our preparations for the potential commercialization of BT.001. Specifically, in the last quarter, we filled key leadership positions, including the hiring of a head of marketing and head of medical affairs, both bringing considerable cardiometabolic expertise to the team. Found a contract for hub and distribution services, and building on the growing body of evidence, we had our abstract from the Cardiometabolic Health Congress published in Postgraduate Medicine, highlighting our primary endpoint results. And during the Academy of Managed Care Pharmacy, or AMCP, meeting at the end of March, we had good interactions with payers and have commenced formal preauthorization information exchange meetings. Despite the reduction in force and resulting slowdown of enrollment in our real-world evidence study, We're pleased to report we have enrolled almost 75% of the target participants and expect to complete enrollment by the end of Q3 this year. We then expect to share the first data set in Q4 of this year. And lastly, we expect the submission to the FDA for a breakthrough device designation for the treatment of liver disease to be completed in Q3 of this year. We recently submitted an abstract describing our LiftVita study results for presentation at the European Association for the Study of the Liver, or ESIL, annual congress. ESIL is a leading professional society, and their clinical practice guidelines inform the standard of care for NAFLD and NASH around the world. Our abstract was accepted for poster presentation at the event in June in Vienna, and Dr. Alkhoury, the PI for the study, will be presenting the poster. Over the past few months, we made in part difficult but necessary changes to our business. As a result, I believe we are extremely capital efficient while maintaining the ability to advance with laser focus the potential commercialization of BT.001, which we anticipate commencing within a few months of receiving a decision from the FDA. Diane will now share more detail on our progress. Diane?

Thanks, Frank. I am thrilled to add to our growing commercial organization with two key leaders in marketing and medical affairs who together bring a combined 40-plus years of cardiometabolic disease and nutrition experience. Our market access work continues, and we're pleased to have consolidated our payer messaging, payer research and health economic modeling, and value-based agreement work streams to complete our Pre-Authorization Information Exchange, or PIE, value story that we have now begun to use in our first payer meetings, as Frank mentioned. From panel discussions and conversations with payers at the recent AMCP meeting, I would like to share the following key takeaways. One, payers are beginning to differentiate PDPs from other digital therapeutics. In other words, those that are FDA authorized versus those that are not. Two, payers see the potential for Medicare coverage through the Access to Prescription Digital Therapeutics Act of 2023 bill as a signal to get ready to cover PDT. And finally, payers are beginning to define pathways and processes for reviewing prescription digital therapeutics. And since the AMCP, we have had several meetings confirmed with payers on our targeted list and are encouraged by the early discussions as we progress towards potential FDA authorization. Veterans Affairs, or the VA, are an important part of our targeted launch strategy. As a matter of fact, one VA site is currently enrolling patients into our real-world evidence programs. We've recently completed a research study to understand more about the patient population and the engagement model. The VA is organized into 18 Veterans Integrated Services Networks, or VISNs, and insights from interviews suggest we take a dual strategy approach, navigating with champions at the national level while also driving local VISN-level advocacy. Key summary points from the study are as follows. The concept of a cognitive behavioral therapy or CBT-based treatment app for diabetes was well received. Pharmacy decision makers responded positively to BT-001's strong safety profile when considering adverse events of a behavioral digital therapy in comparison to those associated with pharmacotherapy. They also perceived no negative impact on the pharmacy budget. Pharmacy leaders agreed BT-001 could be used at any stage of diabetes progression throughout a patient's journey, but felt it would be used as early as possible. They agreed that BT-001 would fit in the current VA clinical practice guidelines as an individualized diabetes self-management education treatment tailored to a patient's preferences, learning needs, and abilities. And finally, a decrease in HbA1c and outpatient visits were cited most in terms of measures for a successful diabetes treatment. We look forward to taking these valuable insights as we move into meetings with key supporters at the national level while developing our VISN-level coverage approach. As we refine our plans for market entry, the first phase in our launch will be focused on continuing efforts to expand coverage amongst payers. Covered lives will be a key metric and determinant of success for us. We anticipate follow-up meetings with payers upon FDA authorization, and we will prioritize the hiring of our field payer team in this effort. We know it is critical to also have provider demand and clinical champions in the marketplace. Health system characterization continues as we further refine our list of 50 health systems mapped from patient claims analyses we conducted in the fourth quarter of last year. Our goal is to identify those health systems that are innovative and more likely to adopt BT-001. Indicators include the ability to influence provider networks, engaging in value-based contracts, and focusing on population health studies or initiatives in diabetes or other large population diseases. As we create awareness and to accelerate our target payer's willingness to review for coverage via PI meetings, we will prioritize health systems mapped to these payers. Our plan is to initiate the build-out of field teams in specific geographies where we see positive momentum with payers and providers for a focused regional market entry. And this represents a thoughtful approach to our ramp-up, responsibly and efficiently managing our resources. With regards to provider engagement, in the first quarter, we also onboarded key opinion leader advisors who are serving to guide our marketing efforts. Early insights gathered will inform our broader research. I'm delighted to hear from practicing clinical experts who have not had prior exposure to or experienced with VT001 about their enthusiasm for this novel therapeutic and the clinical data that supports it. Advisors value a clinical endpoint that matches what they expect in drug trials, the reduction in HbA1c. They're encouraged by the health economic data where VT001 may offset costs of expensive pharmacotherapy. They recognize the exciting innovation here as a shift to behavioral therapy, which may increase the chance for patient change beyond what monitoring alone can do to increase awareness of blood glucose impact from food choice. And, like medication, it's critical to have BT-001 prescribable in their e-prescribing workflows. Finally, we're pleased to report that we have engaged our distribution partner, Phil, leveraging its PhilRx patient access platform to improve access to prescriptions, simplify the patient experience with their prescription, and manage both pharmacy and medical benefits processes. Phil's technology solution offers the capabilities companies like ours in the PDT space need, and it has already been implemented with a number of prescription digital therapeutics commercially available today. Mark Heinen, our Chief Financial Officer, will now review our first quarter 2023 financial results. Mark?

Thank you, Diane. I'll begin by discussing our operating expenses for the first quarter of 2023. Research and development expenses were $3.4 million for the quarter ended March 31st, 2023, compared to $3.7 million for the same period in 2022. The decrease was primarily due to an increase in capitalized software development costs, offset by a decrease in clinical study costs. Sales and marketing expenses for the quarter ended March 31, 2023, were 2.1 million, compared to 2 million for the same period last year. The increase was primarily related to higher personnel-related costs associated with our commercial readiness activities, partially offset by lower real-world evidence-related expenses. General and administrative expenses for the quarter ended March 31, 2023 were $3.4 million, compared to $3.6 million for the same period in 2022. The decrease was primarily related to lower business insurance costs, offset somewhat by an increase in personnel and related costs. Interest expense for the quarter ended March 31, 2023 was $400,000, compared to $300,000 for the same period last year. The increase was primarily the result of an additional $5 million borrowed under the company's secure term loan agreement with Hercules Capital in the second quarter of 2022. Net loss for the quarter ended March 31, 2023 was $9.4 million compared to $9.7 million for the same period last year. On a per share basis, net loss was $0.39 compared to $0.41 last year. The decline in loss per share is related to an increase in weighted average shares outstanding and a decline in net loss. Moving to our balance sheet, cash and cash equivalents were 6.1 million on March 31st, 2023, compared to 15.7 million on December 31st, 2022. In April 2023, we completed a private placement for gross proceeds of 6.5 million. On a pro forma basis, taking into account the private placement, Cash and cash equivalents was $12.6 million at the end of the first quarter. Our cash burn in the first quarter included a number of one-time expenses totaling approximately $1.6 million, including fees related to our recent financing, a principal payment under our Hercules Debt Facility, and others. However, as a result of the restructuring and other cost savings initiatives, our cash burn has now been meaningfully reduced. These initiatives include amending the term loan agreement with Hercules, which among other things provides for a delay in principal payments for up to six months. The cost savings initiatives, delay in principal payments, and proceeds from private placement are expected to extend our cash rate runway toward the end of Q3, allowing us to potentially meet several key milestones, including FDA authorization, a business development transaction, and or a royalty monetization transaction. With that, I'll turn the call back over to Frank for some closing comments. Frank?