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Akili Interactive, a digital medicine company that created the first FDA-authorized prescription video game designed to treat ADHD in kids, is ditching its current business model to directly sell its product to consumers, the company announced on Wednesday.
Akili has struggled to find success with its prescription model, reporting just $114,000 in revenue and $15.3 million in expenses in its August Q2 2023 earnings report. The company said in a statement that the new business model will reduce its reliance on payers “that stand in the way of patients trying to access treatment.”
The company has had trouble convincing payers to cover its product, EndeavorRx, which is the same issue that led Pear Therapeutics to declare bankruptcy earlier this year. Marissa Moore, an early-stage tech investor at Omers Ventures, told Healthcare Brew at the time of the filing that Pear’s situation was “emblematic of a lot of challenges that other digital therapeutics companies are gonna face.”
Eddie Martucci, Akili’s co-founder and CEO, said in a statement that “a nonprescription 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.”
Akili, which went public in 2022 and opened with an initial public offering of $36 and a $448.6 million valuation, will also lay off about 40% of its staff. The Boston-based company plans to use those savings to invest in “activities to drive consumer awareness” of the new business model. “Akili believes that this nonprescription model will enable the company to increase consumer access and generate revenues that will support gross margins between 60%–70% by late 2025,” the company said in a statement.
Akili plans to submit data to the FDA for approval to sell EndeavorRx over the counter in 2024, and will continue to offer it via prescription until then, according to the announcement.
In June, the company introduced EndeavorOTC, an over-the-counter product marketed toward adults who have attention-deficit/hyperactivity disorder. In the first three months of being on the market, “consumer demand, engagement, and retention all surpassed our expectations,” Martucci said in a statement.
“We believe that our shift to a consumer-led model across our business will maximize our reach in the ADHD patient community and allow us to potentially expand into other large markets without many of the high cost centers of a prescription model,” he continued.