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Akili was one of a few companies that sought to develop prescription apps, called digital therapeutics, that have received the FDA’s blessing and would be covered by insurers. Boston-based Akili achieved the first milestone when it received de novo clearance for its game for children to improve ADHD symptoms, called EndeavorRx. However, it struggled to find payers willing to cover the product.
Akili went public through a merger with a special-purpose acquisition company in 2022. It received a delisting notice from Nasdaq in October, and its shares have traded below $1 since the start of 2024.
The company cut nearly a third of its staff in January 2023 and went through another round of layoffs later that year. In September, Akili announced it would restructure its business to no longer focus on prescriptions. Akili started selling an over-the-counter version of its ADHD treatment for adults, thanks to pandemic flexibilities on certain digital health products, and planned to seek FDA clearance to sell both the adult and pediatric versions over the counter.
The over-the-counter product brought more money to Akili than the prescription version, but the company’s expenses still surpassed its earnings.
In 2023, the company brought in $1.7 million in revenue, with $1.2 million from EndeavorOTC and $523,000 from EndeavorRx. Akili reported a $59.5 million net loss last year.
In April, Akili cut 46% of its workforce, including axing its marketing and medical affairs teams, and began looking into strategic alternatives. It also struck an agreement with Japanese pharmaceutical company Shionogi to forgive a $5 million debt obligation and pay $10.5 million upfront for a version of EndeavorRx sold in Japan in exchange for eliminating future royalty and milestone payments.
Virtual Therapeutics will make a cash tender offer of 43 cents per share to buy Akili. The Kirkland, Washington-based company makes virtual reality products for mental wellness in the workplace.
The acquisition is expected to close in the third quarter, subject to certain conditions. Virtual Therapeutics is required to commence the offer no later than June 3. The deal was approved by both companies’ boards.