Akili cut 46% of staff and weighed strategic options as reimbursement lagged

Nasdaq-listed digital therapeutics company behind EndeavorRx, an FDA-cleared prescription video game treating inattention in ADHD

Shrinking by almost half and exploring strategic alternatives, including a possible sale, is the way to survive weak insurer coverage for digital therapeutics

Akili went public in late 2022 by merging with Chamath Palihapitiya's Social Capital Suvretta Holdings SPAC. Its EndeavorRx was the first FDA-approved commercial product targeting cognitive treatment of inattentiveness in ADHD.

In 2023 Akili cut 40% of its workforce and pivoted from a prescription model to over-the-counter, amid persistent difficulty securing reliable reimbursement. On 2024-05-01 it said it would lay off 46% of staff, and that its board and external advisors would weigh a range of potential strategic alternatives with no assurance of a transaction. It also reworked its Japan distribution partnership: Shionogi will forgive a $5 million long-term debt obligation and pay Akili $10.5 million to eliminate future royalty payments on SDT-001, the Japanese version of EndeavorRx.

Insurers were reluctant to reimburse digital therapeutics, so Akili could not secure reliable payments

Insurers cited a lack of long-term data on effectiveness and cost concerns

An earlier 40% layoff and shift to over-the-counter in 2023 had not stabilised the business

Shionogi's debt forgiveness and $10.5M payment gave some cash in exchange for future royalties

A first-of-its-kind regulated product still needs a payer; Akili's second large layoff in a year shows that clearance without reimbursement does not sustain a company.

As of 2024-05-01, Akili had cut 46% of staff, was reviewing strategic alternatives with no assurance of a transaction, and planned to release Q1 earnings on May 14 without a conference call.