Talkspace CEO on Plans to Grow B2B, ‘Significantly Decrease the Cash Burn’

After facing headwinds in the public market, Dr. Jon Cohen inherits a number of challenges as the new CEO of Talkspace Inc. (Nasdaq: TALK).

But coming in, his plan to navigate the stormy waters is to stay the course laid by Chairman Doug Braunstein while he was interim CEO — drive top-line growth by growing the B2B division and stem the flood of expenses at the company.

Talkspace searched for a new CEO for just one week shy of a year. The board of directors terminated co-founder and CEO Oren Frank and Roni Frank, co-founder and head of clinical services, without cause, effective Nov. 15, 2021, according to an annual disclosure for shareholders.


The company announced the removal of the Franks just ahead of the 2021 third-quarter earnings results. A year later, Talkspace announced Cohen’s appointment just before 2022 third-quarter earnings results.

Cohen was already associated with Talkspace before his appointment to CEO on Nov. 8. He was elected to the board of directors in September.

Prior to joining the board, he resigned from his role as CEO and executive chairman of BioReference in August. BioReference is one of the largest full-service laboratories in the nation and is a division of the international biopharma and diagnostics company OPKO Health Inc. (Nasdaq: OPK).


Just 10 days after his appointment as CEO, the Nasdaq Stock Market served Talkspace with notice that it was at risk of being delisted for not maintaining the market’s minimum share price of $1.

Talkspace said in a public filing it’s entertaining available options. It specifically highlighted a reverse stock split. It added this would require stockholder approval at a special meeting. It held its annual meeting on September 15.

That problem might be solved by being acquired by Amwell, officially known as American Well Corp. (NYSE: AMWL) for $239 million, according to market chatter.

Behavioral Health Business interviewed Cohen before the Nasdaq served Talkspace with notice and news of a potential Amwell deal broke. The following Q&A will not include those topics. It has also been edited for length, clarity and style:

BHB: How did you become a member of the board?

Cohen: I knew the chairman [Doug Braunstein]. And in my experience at BioReference, I had built a very large digital health solution called Scarlet Health, which is a digital home [blood] draw solution with 80 million covered lives. So, we knew each other and after multiple discussions, he asked me if I was interested in joining the board of Talkspace.

Why did you become a member of the board?

I’ve had a significant interest in, first, mobile health and then digital health over the last 10-plus years.

I thought that the mental health space, which obviously has a huge need, is growing rapidly. If you put that on top of the telehealth acceleration post-COVID, I just thought it was — given the 10-year history of Talkspace and its brand — a really interesting opportunity to be involved in something that was the future.

Did you seek the CEO role or were you invited to participate in the search process?

It was just really a discussion they had. Doug had been interim CEO for close to a year. He and the team did a huge amount of work in the last 12 months to get it to where it is now, today. At that time, the board was just beginning to make a decision about what they were going to do about the CEO. They had, quite honestly, put off making a decision. I’ll call it fortuitous. I had left BioRefernce back in August. I was quite unsure of what I was going to do next. I had a really terrific run there through COVID. And I really wasn’t sure. It just came up with a discussion about whether or not I would have any interest. And that’s how it started.

When did the selection process start?

It was the beginning of October.

Where do you see Talkspace, big picture, in terms of its development?

It’s been around for a while. It has a very strong brand in the market. It originally grew out of a B2C platform. It started off as asynchronous, meaning texting, then voice which then moved, in addition, into video. All of that evolved because technology evolved. Remember, 10 years ago, video was not as successful as it is today.

If you layer that on top of the strategic changes [to more B2B], that’s a significant change strategically for the company.

[Talkspace] went through a lot of changes in the last year. It’s in a place now where there are two big, important initiatives.

One is to drive the company to profitability. That’s a very, very important issue for me and the company, to get us to break even and to be profitable.

At the same time, you need to continue to take costs out where you can and, in addition, significantly grow the top line by adding covered lives — we have 86 million covered lives now for the payers — and then add on more and more employers.

What are your immediate to-dos?

There are a bunch of things you always do when you take on a leadership role.

First, do you have the right people? Do you have the right team? Is that team aligned? Are the objectives the same?

The second part of that is setting the goals for the next year and two years. Then, that requires developing a commercial marketing plan that, and adding in a financial plan, gets to those goals.

The company relies heavily on contract therapists. Will that change in the near future?

I think the answer to that is probably no. I would say that we are going to rely on both the people that we have that are full-time employees and certainly the people that are in the network that we’ve built out there of part-timers. I would say it’s a combination.

From a capital perspective, what are the company’s needs? And do you think anything’s going to change in that realm?

We’re well-capitalized. The biggest movement is going to be to significantly decrease the cash burn to get breakeven and profitability so we can retain the capital we have or other investments in the future. But I don’t know what they will be right now.

Will you continue to position Talkspace to serve public health plan members, i.e., those on Medicare, Medicaid and receiving care from the VA?

We’re evaluating that now.

One of the many reasons other behavioral health providers want to work with people in these populations is the need in terms of population and severity of conditions. Another is that Medicare, Medicaid and the VA are major payers. Do those two factors apply for Talkspace?

I think that’s right. We have to make sure that the reimbursement is enough to support the needs of the network. That’s part of it.

Medicare, for instance, as far as I can tell, does not pay for asynchronous mental health services, meaning they don’t pay for conversation texting. The usual Medicare population only gets reimbursed for video consults. That’s another thing that has to go into the hopper on this decision on the business side.

What other changes in technology at Talkspace have you excited?

We’ve made a lot of improvements in the matching of therapists to members. We continue to really move toward improving the matching process even better.

Now that you’re CEO, how do you see Talkspace changing or growing?

Adding a significant number of payer lives and adding a significant number of employers in addition to people using the services. You can have an EAP program. But hopefully, you have the employers promote the program so that the employees get the benefit.

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