Akili slashes 40% of staff, shifts to OTC sales for digital therapies

Akili Interactive, digital therapeutics, Over-The-Counter, ADHD, layoff

In response to the challenges faced by prescription digital therapeutics companies, Akili is taking a new approach to navigate the hurdles. The company, which specializes in digital therapeutics for attention-deficit/hyperactivity disorder (ADHD) in both children and adults, is shifting towards a nonprescription model for its products. This strategic move is aimed at reducing operating costs, improving profit margins, and enhancing accessibility for users without relying heavily on skeptical insurers.

To achieve these goals, Akili plans to trim its workforce by approximately 40%, mainly by eliminating its field sales force and market access team. By streamlining the commercialization process, the company anticipates cost savings. Akili’s primary digital therapeutic, Endeavor, is designed as an interactive video game that stimulates the senses and challenges motor skills while adapting to users’ needs through built-in algorithms.

In 2020, Akili received FDA clearance for its prescription-only version of the game, EndeavorRx, designed to improve attention in children aged 8 to 12 with ADHD. In June of this year, the company introduced EndeavorOTC, an over-the-counter edition for adults with ADHD. This version can be downloaded from the Apple App Store without a prescription, with a monthly subscription cost starting at approximately $10.

With the planned transition to a completely nonprescription model, Akili intends to submit data to the FDA next year to convert the pediatric version of its software from prescription to over-the-counter labeling. Additionally, it plans to submit data later this year to support the formal over-the-counter authorization of the adult-focused software.

Both EndeavorRx and EndeavorOTC will continue to be available as is while Akili pursues these formal FDA authorizations. The company believes that this shift to a nonprescription model will provide more control over its growth and result in a lasting and sustainable business.

“We have the unique ability to offer consumers the same clinically proven technology as the world’s only FDA-approved prescription video game treatment, with the ease of access and convenience of a consumer tech product. A non-prescription model removes reliance on intermediaries, which we believe will give us more control over our growth and enable us to build a lasting, sustainable business.” 

– CEO Eddie Martucci, Ph.D

Akili expects a significant reduction in total annual operating expenses, with a decrease of about 20% between this year and the next, from an estimated $55 million to $60 million in 2023 to between $42 million and $47 million in 2024. This strategic shift is also expected to extend Akili’s cash runway at least into the second half of 2025, with a targeted gross margin of at least 60% by that time.

Eddie Martucci, Ph.D., CEO of Akili, highlighted the success of the nonprescription model with EndeavorOTC, citing strong consumer demand, engagement, and retention in its first three months on the market. During this period, EndeavorOTC attracted over 4,100 active subscribers, generating around $341,000 in revenue with an average revenue of nearly $82 per user.

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