EndeavorRx®, the world’s first FDA-authorized
video game treatment, saw quarter over quarter growth in number of
prescribers and volume of prescriptions; Initiated commercial
launch in Q3
Raised more than $164 million in gross proceeds
with business combination; Akili, Inc. now trading as Nasdaq:
AKLI
Akili, Inc. (Nasdaq: AKLI), a leading digital medicine company,
today reported its financial results for the quarter ended
September 30, 2022, and provided an update on business
progress.
“We achieved two important milestones this quarter on our path
to bring digital treatments to mainstream medicine - we began
trading on Nasdaq and raised funds to support our first product
launch and advance our pipeline, and we transitioned from
pre-launch to launch of EndeavorRx,” said Eddie Martucci, chief
executive officer of Akili. “With a solid foundation and
experienced team in place, Akili is well-positioned to advance our
vision of EndeavorRx becoming part of routine medical care for
children with ADHD.” (See below for EndeavorRx full indication and
safety information.)
“Prescriptions for EndeavorRx have been written across all 50
states, and market uptake continues to grow,” said Matt Franklin,
president and chief operating officer of Akili. “We have now
executed the first phase of our commercial launch of EndeavorRx,
hiring, training and deploying our initial sales force into
priority territories to help us accelerate adoption.”
Recent Business Updates
- Akili deployed the first wave of its EndeavorRx go-to-market
sales force in the third quarter of 2022 in 14 priority territories
across the U.S. with a focus on Integrated Behavioral Health
Centers and pediatric providers. Akili plans to scale to additional
territories over the next 18 months.
- More than 1,300 prescriptions for EndeavorRx were written in
the third quarter, representing a 71% increase over the second
quarter of 2022 and a 146% increase over the third quarter of 2021.
In the third quarter of 2022, 789 physicians prescribed EndeavorRx,
including more than 500 new prescribers, representing a 91% gain in
new prescribers over the second quarter of 2022 and a 110% increase
over the third quarter of 2021. From FDA authorization through the
third quarter of 2022, over 2,000 physicians prescribed EndeavorRx
to patients, with prescriptions now written in every state in the
U.S.
- Akili launched the EndeavorRx Expedition product registry to
obtain feedback from patients receiving the digital therapeutic,
and their caregivers. This fully remote, direct-to-patient registry
is open to any patient who has been prescribed EndeavorRx and is
designed to provide insights into patient characteristics, usage
patterns, and collection of real-world evidence. The company plans
to use the data to expand the real-world evidence base for
physicians, payers, and caregivers.
- A phase 3 randomized, controlled study of Akili’s SDT-001
product candidate (the same core technology behind EndeavorRx,
localized for Japanese language and culture for distribution in
Japan) designed to improve measures of attention in children with
ADHD was initiated in Japan. The study is being conducted by
Akili’s partner, the global pharmaceutical company Shionogi &
Co., Ltd.
- In August, Akili completed its business combination with Social
Capital Suvretta Holdings Corp. I and began trading on The Nasdaq
Capital Market (“Nasdaq”) under the new ticker symbol “AKLI.” Akili
raised more than $164 million from the transaction, before
deducting transaction expenses and advisory fees, and established
its new public company board of directors.
Third Quarter 2022 Financial Highlights
- Cash position: As of September 30, 2022, Akili had
$156.4 million in cash, cash equivalents, and short-term
investments, compared to $45.6 million at June 30, 2022. The cash
position is expected to be sufficient to fund current and planned
operations until mid-2024.
- Revenues: EndeavorRx revenues for the third quarter 2022
were $82 thousand compared to $64 thousand for the quarter ended
June 30, 2022.
- Total Operating Expenses: GAAP total operating expenses
were $24.5 million for the third quarter, compared to $22.3 million
for the quarter ended June 30, 2022. The increase was driven by
transaction related costs allocated to earnout shares and
stock-based compensation related expenses, partially offset by the
timing of discretionary marketing expenditures associated with the
commercialization of EndeavorRx. Non-GAAP total operating expenses
were $18.3 million for the third quarter, compared to $20.3 million
for the quarter ended June 30, 2022. The decrease was primarily due
to lower clinical trials related expenses and timing of
discretionary marketing expenditures associated with the
commercialization of EndeavorRx.
- R&D Expenses: GAAP research and development expenses
were $7.6 million for the third quarter, compared to $7.4 million
for the quarter ended June 30, 2022. The increase was primarily due
to stock-based compensation related expenses. Non-GAAP research and
development expenses were $6.2 million for the third quarter,
compared to $6.5 million for the quarter ended June 30, 2022. The
decrease was primarily due to lower clinical trials related
expenses.
- SG&A Expenses: GAAP selling, general, and
administrative expenses were $16.9 million for the third quarter,
compared to $14.9 million for the quarter ended June 30, 2022. The
increase was driven by transaction related costs allocated to
earnout shares and stock-based compensation related expenses,
partially offset by the timing of discretionary marketing
expenditures associated with the commercialization of EndeavorRx.
Non-GAAP selling, general, and administrative expenses were $12.0
million for the third quarter, compared to $13.8 million for the
quarter ended June 30, 2022. The decrease was driven primarily by
the timing of discretionary marketing expenditures associated with
the commercialization of EndeavorRx.
- Net income (loss): GAAP net income was $53.2 million in
the third quarter compared to a net loss of $22.5 million for the
quarter ended June 30, 2022. The change in profitability was
primarily due to the reduction of liabilities relating to the
company’s earnout shares. Non-GAAP net loss was $18.5 million in
the third quarter compared to a net loss of $20.5 million for the
quarter ended June 30, 2022.
For additional information, please see the tables below, which
include a reconciliation of the non-GAAP financial measures to GAAP
financial measures.
Webcast and Conference Call
Akili will host a conference call and webcast today, Thursday,
November 10, 2022, at 4:30 p.m. ET. A live audio webcast of the
conference call and presentation will be available at
www.akiliinteractive.com under Investor Relations, Events &
Presentations. An archived version of the webcast will be available
on the company’s website following the event.
To access the call, dial 877-405-1224 (toll-free) or
201-389-0848 (international) and reference “Akili Q3 Results.”
International toll-free numbers are available here.
Non-GAAP Financial Measures
In addition to financial information prepared and presented in
accordance with generally accepted accounting principles in the
United States (GAAP), this press release includes the following
non-GAAP financial measures: non-GAAP total operating expenses on a
historical basis, non-GAAP R&D expenses on a historical basis,
non-GAAP SG&A expenses on a historical basis, and non-GAAP net
loss on a historical basis. Akili derives these non-GAAP financial
measures by excluding certain expenses and other items from the
respective GAAP financial measure that is most directly comparable
to each non-GAAP financial measure. Specifically, the non-GAAP
total operating expenses, non-GAAP R&D expenses, and non-GAAP
SG&A expenses exclude stock-based compensation expense and
transaction costs allocated to earnout shares, and non-GAAP net
loss excludes stock-based compensation expense, transaction costs
allocated to earnout shares, and the change in estimated fair value
of earn-out liabilities. Akili’s management believes that these
non-GAAP financial measures are useful to both management and
investors in analyzing its ongoing business and operating
performance. Management does not intend the presentation of these
non-GAAP financial measures to be considered in isolation or as a
substitute for results prepared in accordance with GAAP, but as a
complement to provide greater transparency. In addition, these
non-GAAP financial measures may differ from similarly named
measures used by other companies. A reconciliation of the non-GAAP
financial measures to GAAP financial measures is included in the
attached financial tables.
EndeavorRx Indication and Overview
EndeavorRx is the first-and-only FDA-authorized treatment
delivered through a video game experience. EndeavorRx is indicated
to improve attention function as measured by computer-based testing
in children ages 8 to 12 years old with primarily inattentive or
combined-type ADHD, who have a demonstrated attention issue.
Patients who engage with EndeavorRx demonstrate improvements in a
digitally assessed measure Test of Variables of Attention (TOVA®)
of sustained and selective attention and may not display benefits
in typical behavioral symptoms, such as hyperactivity. EndeavorRx
should be considered for use as part of a therapeutic program that
may include clinician-directed therapy, medication, and/or
educational programs, which further address symptoms of the
disorder. EndeavorRx is available by prescription only. It is not
intended to be used as a stand-alone therapeutic and is not a
substitution for a child’s medication. The most common side effect
observed in children in EndeavorRx’s clinical trials was a feeling
of frustration, as the game can be quite challenging at times. No
serious adverse events were associated with its use. EndeavorRx is
recommended to be used for approximately 25 minutes a day, 5 days a
week, over initially at least 4 consecutive weeks, or as
recommended by your child’s health care provider. To learn more
about EndeavorRx, please visit EndeavorRx.com.
About Akili
Akili is pioneering the development of cognitive treatments
through game-changing technologies. Akili’s approach of leveraging
technologies designed to directly target the brain establishes a
new category of medicine – medicine that is validated through
clinical trials like a drug or medical device but experienced like
entertainment. Akili’s platform is powered by proprietary
therapeutic engines designed to target cognitive impairment at its
source in the brain, informed by decades of research and validated
through rigorous clinical programs. Driven by Akili’s belief that
effective medicine can also be fun and engaging, Akili’s products
are delivered through captivating action video game experiences.
For more information, please visit www.akiliinteractive.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, as amended. These forward-looking statements generally are
identified by the words “believe,” “project,” “expect,”
“anticipate,” “estimate,” “intend,” “strategy,” “future,”
“opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,”
“will continue,” “will likely result,” and similar expressions.
Forward-looking statements are predictions, projections and other
statements about future events that are based on current
expectations and assumptions and, as a result, are subject to risks
and uncertainties.
These forward-looking statements include, without limitation,
statements in this press release related to: our vision for
EndeavorRx; the commercial launch of EndeavorRx and our plans to
scale our commercialization efforts and personnel; the anticipated
acceleration of market uptake and insurance coverage of EndeavorRx;
the development and advancement of our pipeline of digital
therapeutics product candidates for other patient populations; our
plans to use data from patients and caregivers to expand the
real-world evidence base; and our expectation that our existing
cash, cash equivalents, and short-term investments will be
sufficient to fund our current and planned operations until
mid-2024. Any forward-looking statements in this press release are
based on management’s current expectations and beliefs and are
subject to a number of risks, uncertainties and important factors
that may cause actual events or results to differ materially from
those expressed or implied by any forward-looking statements
contained in this press release, including, without limitation,
risks and uncertainties related to: our ability to successfully
commercialize EndeavorRx; our ability to successfully create, and
navigate, a new category of medicine and to achieve broad adoption
of digital therapeutics among healthcare providers, caregivers, and
patients; our ability to obtain and maintain adequate coverage and
reimbursement for our digital therapeutics; our ability to continue
to advance our clinical development pipeline; our ability to defend
our intellectual property and satisfy various FDA and other
regulatory requirements in and outside of the United States; the
impact of the COVID-19 pandemic on our business; the risk of
downturns and a changing regulatory landscape in the highly
competitive industry in which we operate; the timing and results
expected from our and our partners' clinical trials and our
reliance on third parties for certain aspects of our business; our
ability to accurately estimate expenses, capital requirements, and
needs for additional financing; and other risks identified in our
current filings and any subsequent filings made with the Securities
and Exchange Commission (SEC). We caution you not to place undue
reliance on any forward-looking statements, which speak only as of
the date hereof and should not be relied upon as representing the
company’s views as of any subsequent date. We disclaim any
obligation to publicly update or revise any such statements to
reflect any change in expectations or in events, conditions or
circumstances on which any such statements may be based, or that
may affect the likelihood that actual results will differ from
those set forth in the forward-looking statements.
Akili, Inc. Unaudited Condensed Consolidated
Balance Sheets September 30, June 30,
December 31,
2022
2022
2021
Assets Current assets: Cash and cash equivalents
$
89,661
$
40,638
$
76,899
Restricted cash
305
305
305
Short-term investments
66,696
4,987
-
Accounts receivable
30
17
29
Prepaid expenses and other current assets
4,586
5,328
2,500
Total current assets
161,278
51,275
79,733
Property and equipment, net
996
1,054
1,193
Operating lease right-of-use asset
2,760
2,686
-
Prepaid expenses and other long-term assets
-
-
11
Total assets
$
165,034
$
55,015
$
80,937
Liabilities, redeemable convertible preferred stock and
stockholders’ equity (deficit) Current liabilities: Accounts
payable
3,486
4,309
2,345
Accrued expenses and other current liabilities
6,240
5,044
5,477
Deferred revenue
109
109
96
Deferred rent, short term
2
9
123
Operating lease liability
803
625
-
Note payable, short term
2,500
625
-
Total current liabilities
13,140
10,721
8,041
Note payable, long term
12,436
14,213
4,784
Operating lease liability, net of current portion
2,701
2,832
-
Corporate bond, net of bond discount
1,785
1,735
1,638
Earn-out liabilities
11,100
-
-
Deferred rent, long term
-
-
712
Total liabilities
41,162
29,501
15,175
Commitments and contingencies Redeemable convertible preferred
stock
-
300,554
291,876
Stockholders' equity (deficit) Common stock
8
-
-
Additional paid-in capital
347,330
-
-
Accumulated deficit
(223,473
)
(275,033
)
(226,114
)
Accumulated other comprehensive gain (loss)
7
(7
)
-
Total stockholders' equity (deficit)
123,872
(275,040
)
(226,114
)
Total liabilities, redeemable convertible preferred stock and
stockholders’ equity (deficit)
$
165,034
$
55,015
$
80,937
Akili, Inc. Unaudited Condensed Consolidated
Statements of Operations Three Months EndedSeptember
30, Nine Months EndedSeptember 30, Three Months
EndedJune 30,
2022
2021
2022
2021
2022
Revenues
$
82
$
155
$
212
$
377
$
64
Cost of revenues
123
83
316
243
97
Gross profit (loss)
(41
)
72
(104
)
134
(33
)
Operating expenses: Research and development
7,554
4,756
21,216
12,739
7,358
Selling, general and administrative
16,911
13,292
47,250
28,675
14,948
Total operating expenses
24,465
18,048
68,466
41,414
22,306
Operating loss
(24,506
)
(17,976
)
(68,570
)
(41,280
)
(22,339
)
Other income (expense), net
77,742
(161
)
77,421
(457
)
(154
)
Net income (loss)
$
53,236
$
(18,137
)
$
8,851
$
(41,737
)
$
(22,493
)
Akili, Inc. GAAP to Non-GAAP Reconciliation
Three Months EndedSeptember 30, Nine Months
EndedSeptember 30, Three Months EndedJune 30
2022
2021
2022
2021
2022
R&D Expenses
$
7,554
$
4,756
$
21,216
$
12,739
$
7,358
Less Stock-Based Compensation
(1,312
)
(408
)
(2,762
)
(920
)
(845
)
Non-GAAP R&D Expenses
6,242
4,348
18,454
11,819
6,513
SG&A Expenses
16,911
13,292
47,250
28,675
14,948
Less Transaction costs allocated to earnout shares
(3,046
)
-
(3,046
)
-
-
Less Stock-Based Compensation
(1,841
)
(1,340
)
(4,430
)
(2,628
)
(1,124
)
Non-GAAP SG&A Expenses
12,024
11,952
39,774
26,047
13,824
Total Operating Expenses
24,465
18,048
68,466
41,414
22,306
Less Transaction costs allocated to earnout shares
(3,046
)
-
(3,046
)
-
-
Less Stock-Based Compensation
(3,153
)
(1,748
)
(7,192
)
(3,548
)
(1,969
)
Total Non-GAAP Operating Expenses
18,266
16,300
58,228
37,866
20,337
Operating Loss
(24,506
)
(17,976
)
(68,570
)
(41,280
)
(22,339
)
Less Transaction costs allocated to earnout shares
3,046
-
3,046
-
-
Less Stock-Based Compensation
3,153
1,748
7,192
3,548
1,969
Non-GAAP Operating Loss
(18,307
)
(16,228
)
(58,332
)
(37,732
)
(20,370
)
Other income (expense), net
77,742
(161
)
77,421
(457
)
(154
)
Less Change in estimated fair value for earn-out liabilities
(77,892
)
-
(77,892
)
-
-
Non-GAAP Other income (expense), net
(150
)
(161
)
(471
)
(457
)
(154
)
Net Income (Loss)
53,236
(18,137
)
8,851
(41,737
)
(22,493
)
Less Transaction costs allocated to earnout shares
3,046
-
3,046
-
-
Less Stock-Based Compensation
3,153
1,748
7,192
3,548
1,969
Less Change in estimated fair value for earn-out liabilities
(77,892
)
-
(77,892
)
-
-
Non-GAAP Net Loss
$
(18,457
)
$
(16,389
)
$
(58,803
)
$
(38,189
)
$
(20,524
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221110005821/en/
Investor Contact:
Joshua Young VP, Investor Relations
jyoung@akiliinteractive.com
Media Contact: Julie DiCarlo SVP, Communications
julie@akiliinteractive.com
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