Digital pharmacy startup Medly is closing its doors at the end of February, two employees confirmed.
A U. S. Bankruptcy Court judge in Delaware on Monday approved the sale of Medly’s pharmacy assets, including its patient data, pharmacy records and prescription drug inventory to Walgreens for $19.35 million. The sale did not include its retail assets, such as over-the-counter drugs sold through its app and in physical locations.
Medly filed for Chapter 11 bankruptcy protection in December 2022, listing $11.4 million in assets and $105.6 million in liabilities.
Business Insider on Tuesday reported Medly sent an email to employees Tuesday saying it’s shutting down operations and closing its remaining 22 stores will close by the end of the month. Two employees contacted at the company on Thursday said the company would shut down by the end of February.
Medly laid off 1,110 workers, more than half of its workforce, in August. It cut another 173 jobs in December when it filed for bankruptcy protection. In September, former employees filed a lawsuit seeking class-action status that alleges Medly did not give proper written notice of the layoffs, in violation of the Worker Adjustment and Retraining Act. The suit was stayed due to Medly’s bankruptcy proceedings.
The bankruptcy is a fall from grace for Medly, which received $100 million in July 2020 from venture firms Greycroft and Volition Capital to grow its digital, same-day delivery business. The company bought health and wellness pharmacy company Pharmaca in June 2021. CEO and co-founder Dr. Marg Patel left the company in August.
The demise of Medly comes as digital health companies are struggling to adapt to broader economic challenges. Dozens of startups have laid off employees since June of 2022.