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19 Dec

Medly Files for Bankruptcy, Reports More Than $110 Million

Digital pharmacy start-up Medly Health Inc., which launched in 2017, has voluntarily filed for a Chapter 11 bankruptcy in Delaware, following two large layoffs in August. The corporate reported greater than $110 million in secured debt. 

The corporate gained popularity in the course of the COVID-19 pandemic as a substitute choice to pharmacies, offering free same-day prescription delivery, and was presupposed to be the fastest-growing digital pharmacy. 

The brand secured $100 million in Series B funding in July 2020 with plans to proceed scaling the business. 

In June 2021, Medly acquired Pharmaca, a primarily online wellness store that sells an array of brands like Jane Iredale, Juice Beauty, Vital Proteins and Olly. When this acquisition was revealed, it was said that Pharmaca had 28 brick-and-mortar stores, and Medly planned to expand the brand to just about 30 markets. 

The bankruptcy declaration, signed by Medly chief executive officer Richard Willis, cites a “lack of anticipated financing and the invention of certain accounting irregularities,” as sources for the corporate’s financial struggles. Medly was set to receive a $100 million loan in August 2022, however the deal was not accomplished. Without the loan, the corporate was unable to buy drugs and fulfill prescriptions and was reportedly forced to shut greater than 20 stores.  

The corporate reported a net income of negative $9 million to negative $11 million between Jan. 1, 2022 and Sept. 30, 2022 and negative $15 million in money operations as of Sept. 30, 2022. 

With the bankruptcy filing, the medical company intends to shut Medly’s 4 full-service digital pharmacies upon approval of sale, selling the prescription lists in order that patients may transfer to a different pharmacy, in addition to sell the 22 Pharmaca pharmacies.

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