A digital therapeutics pioneer is merging with another digital health company as the field, once flush with venture cash, struggles to find its place.
Akili Interactive, a public company that develops video games to treat ADHD, will be sold to the private digital health company Virtual Therapeutics for an undisclosed amount, they announced on Wednesday. The move comes a month after Akili announced a restructuring that would reduce its staff by 46%.
Akili’s EndeavorRx became the first video game to win FDA authorization as a prescription mental health treatment in 2020. But insurers were slow to cover EndeavorRx and other digital therapeutics. Pear Therapeutics, the first startup to get FDA clearance for a prescription digital therapeutic, filed for bankruptcy last April and sold its software after struggling to get insurers on board.
Last year, Akili laid out plans to retool with an over-the-counter focus.
Matt Franklin“We want payers and we want providers to support us, but we don’t want to have to depend on their support for our success as a business,” CEO Matt Franklin said in March at the TD Cowen Health Care Conference, according to an AlphaSense transcript.
Upon closing its deal, Akili will become a subsidiary of Virtual Therapeutics, and will no longer be listed on a public stock exchange. A Virtual Therapeutics spokesperson declined to comment on the financial terms of the deal. The companies said that shareholders will receive about $0.43 per share of common stock, a 4% premium to Akili’s closing stock price on Tuesday.
The deal is expected to close in the third quarter of this year.
Virtual Therapeutics is developing virtual reality technology for meditation and “mental fitness training,” according to its website.
“Combining our proven track record developing and deploying rigorously validated mobile digital therapeutics with Virtual Therapeutics’ robust portfolio of VR-based mental health solutions and gaming expertise, we aim to create a compelling platform to address mental health needs across several high-impact indications,” Franklin said in a news release on Wednesday.