The once-hot digital pharmacy Medley gained popularity during the pandemic, fueled by $100 million raised in 2020 to disrupt pharmacy giants like CVS and Walgreens. Crushing losses forced the business to file for Chapter 11 bankruptcy.

WHO: Founded in 2017, Brooklyn-based Medly described itself as the nation's fastest-growing digital pharmacy. With a mission to democratize pharmacy access, the company is a full-service pharmacy that provides on-demand, same-day prescription delivery, validates and files insurance claims, and works directly with patients to manage adherence to medication and refills. The company operates four full-service digital pharmacies, 21 brick-and-mortar, full-service specialty pharmacies serving 20 markets across nine states, and one health and wellness store in Seattle. Medly Health also operates an e-commerce business through Pharmaca.com.

Insider reported that by June 2022, Medly was serving 32,000 patients in 51 stores across the US, reaching nearly $270 million with plans to roll out 100 locations in three years, citing a company presentation.

IN THEIR OWN WORDS: "After suffering a severe liquidity crisis this summer and fall, precipitated by a loss of anticipated financing and the discovery of certain accounting irregularities, the debtors, under new management, have commenced these Chapter 11 cases to preserve and maximize value for all stakeholders through one or more asset sales," Medly CEO Richard Willis declared in court documents.

The company also wants to sell off Pharmaca, which includes 22 stores. "The debtors have identified a buyer to act as a stalking horse in such sale. The debtors believe pursuing both sales in these Chapter 11 cases is the best path forward and is in the best interests of their estates and creditors," Willis declared.

DETAILS:

• Medly Health filed in the US Bankruptcy Court in Delaware. The filing requests that bankruptcy petitions for Medly Health and 31 of its affiliates, including Pharmaca, be jointly administered in the petition.
• The company has estimated assets and liabilities of $100 million to $500 million.
• In August, the business laid off over half its employees and closed 24 stores.
• Company founder Marg Patel stepped down as CEO in early September.
• Medly posted losses of $35 million in the first half of the year before accounting for expenses like interest and taxes and reported more than $110 million in secured debt. 
• MedPharmaca Holdings Inc. has agreed to place a starting $18.5 million bid at a bankruptcy auction of most of Medly's assets, including the Pharmaca stores.
• The company lists debts, including $81 million to affiliates of TriplePoint Capital and $20 million to Silicon Valley Bank.
• In July 2021, Medly Pharmacy acquired Boulder-based Pharmaca Integrative Pharmacy.
• Medly raised $100 million in Series B funding in July 2020 from investors Volition Capital, Greycroft, Horsley Bridge, and Lerer Hippeau.