Akili, the company behind video game-like prescription and over-the-counter digital therapeutics for individuals with ADHD, has signed a definitive merger agreement with mental health and fitness company Virtual Therapeutics in a deal reportedly worth $34 million.
Under the agreement, which is slated to close in the third quarter of 2024, Akili shareholders will receive $0.4340 per share of common stock in cash, representing a 4% premium to the company’s closing stock price on May 28.
Upon finalization of the deal, the combined companies will operate under the Virtual Therapeutics brand, and Akili will no longer be a publicly traded company.
“Akili ran a thorough strategic process and we believe that this transaction represents Akili’s commitment to delivering value to the Akili stockholder,” Matt Franklin, CEO of Akili, said in a statement.
“Virtual Therapeutics has been built by a team with decades of success in the gaming industry and elected to focus their expertise to help solve the growing mental health crisis. 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.”
THE LARGER TREND
The announcement came just one month after Akili relayed that it was seeking strategic alternatives to “maximize shareholder value.” The company’s board approved a revised operating plan and budget for the remainder of the year.
It also approved restructuring of the company to lower operating costs, including a 46% reduction of its workforce, which included its medical affairs and marketing teams.
It also reduced promotional activity for its EndeavorRx and EndeavorOTC products, though it said it continued to seek FDA clearance for its EndeavorOTC product.
Akili, which went public through a SPAC in 2022, reported its first-quarter earnings earlier this month, noting total revenue of $383,000 in Q1 2024 compared to $749,000 for the fourth quarter of 2023 and GAAP net loss of $9.8 million in the first quarter compared to $11.1 million in the fourth quarter of last year.
The company reported total operating expenses of $11.1 million in the first quarter of the year compared to $12.1 million in Q4 2023, and cash and cash equivalents of $63.2 million as of the end of March 2024 compared to $75.2 million as of the end of December 2023.