The digital medicine company has unveiled its strategic plan to shift from a prescription-based business model, to a non-prescription business model. As part of this transition, Akili plans to seek regulatory approval for over-the-counter labelling of its products. 

Why it’s notable:

• Available by prescription only, EndeavorRx is the first-and-only U.S Food and Drug Administration (FDA)-authorised treatment delivered through a video game experience. It is recommended for enhancing attention function, in children aged 8 to 12 years with predominantly inattentive or combined-type ADHD. The non-prescription model, EndeavorOTC was released in June, as a treatment for adults with ADHD. During the initial three months on the market, EndeavorOTC has surpassed expectations in relation to consumer demand, engagement and retention, according to Akili CEO and co-founder. The strong demand and growth of EndeavorOTC, have formed the backbone of the decision to re-align the business around the OTC model. 

• As part of the restructure Akili intends to reorganise its operations to align with its newly adopted business model, which anticipates reduced operational costs for a non-prescription approach. Therefore Akili will scale down its workforce and resource allocation directed towards its paediatric prescription business while ensuring the ongoing provision of support to existing paediatric customers. The company anticipates a reduction of approximately 40% in its workforce, a move which follows a workforce reduction of 30% in January this year. A significant portion of the current reduction will affect the company's field sales force and market access team, representing around two-thirds of the total reduction. Akili plans to reinvest a portion of the cost savings into initiatives aimed at enhancing consumer awareness and efficiently expanding its business operations.

Industry Implications: 

• The changes reflect challenges digital therapeutics companies face in winning over payer coverage for their products. By focusing on a consumer-led subscription model, Akili aims to diminish its dependance on payers and enable the business to expand to meet the rising demand for non-pharmaceutical cognitive treatments. The company is confident that this business model will enhance consumer accessibility and yield revenue, facilitating the attainment of gross margins between 60 and 70 percent by late 2025.

• Akili plans to pursue regulatory approval for over-the-counter labelling of its treatment products. The company is progressing as planned to submit adult clinical trial data to the FDA to obtain OTC authorisation for EndeavorOTC. Additionally, the company has intentions to submit data for the conversion of its paediatric prescription product, EndeavorRx, into an OTC product in 2024. Throughout the transition, Akili expects that both EndeavorOTC and EndeavorRx will remain on the market. 

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