Akili plans to transition to a non-prescription model, reduce headcount by 40%

Akili announced its strategic plan to transition from a prescription to a non-prescription business model. The company plans to pursue regulatory approval for over-the-counter labeling of its products. The company said, “Akili’s focus on a consumer-led subscription model will reduce reliance on payers and enable the company to grow the business in line with the increasing demand for non-drug cognitive treatments. Akili believes that this non-prescription model will enable the company to increase consumer access and generate revenues that will support gross margins between 60 and 70 percent by late 2025. The non-prescription model allows Akili to give consumers access to differentiated and clinically-validated technology, while removing the reliance on payers that stand in the way of patients trying to access treatment. The decision to re-align the business around this new model is based on the strong demand and rapid and cost-efficient growth potential observed with EndeavorOTC in the adult market since its release.” Akili plans to pursue regulatory approval for over-the-counter labeling of its treatment products. The company is on track to submit its adult clinical trial data later this year to the FDA for OTC authorization of EndeavorOTC, and is planning to submit data to the FDA to convert its pediatric prescription product, EndeavorRx, to OTC in 2024. Akili expects that both EndeavorOTC and EndeavorRx will remain on the market as the company pursues these plans. Akili plans to restructure the organization around executing this new business model to reflect expected lower costs to operate a non-prescription model. In connection with the restructuring, Akili will reduce staff and resources focused on its pediatric prescription business, while enabling continued support for existing pediatric customers. The company’s workforce will be reduced by approximately 40%, including an elimination of the company’s field sales force and market access team which accounts for approximately two-thirds of the reduction. The company plans to invest a portion of the savings in activities to drive consumer awareness and capital-efficient expansion of the business.