EndeavorRxⓇ prescriptions in pediatric ADHD
market grew 27% in Q2 2023 over Q1 2023
Company is preparing FDA submission for
EndeavorOTCTM as over-the-counter treatment, following its June
2023 product release in the adult ADHD market
Company reaffirms FY 2023 expense guidance of
$55M - $60M of non-GAAP total operating expenses and cash runway
into Q1 2025
Akili, Inc. (Nasdaq: AKLI), a leading digital medicine company,
today reported its financial results for the quarter ended June 30,
2023, and provided an update on business progress.
“We’re seeing continued adoption of EndeavorRx in our initial
pediatric market, and we are excited to have entered the sizable
adult market with the introduction of EndeavorOTC,” said Eddie
Martucci, chief executive officer of Akili. “Early data shows
consumer interest and demand in the adult market. Based on our
learnings from the June release of EndeavorOTC, we are pursuing FDA
authorization as an over-the-counter treatment in the adult market,
while we continue to optimize the model, enhance the product, and
drive growth. If approved, FDA authorization as an over-the-counter
treatment expands access to our safe and effective treatment for
millions of adults struggling with attention issues and ADHD.”
Business Update
- Akili continues to see steady uptake of EndeavorRx in
mainstream medical practice, with growth across key adoption
metrics.
- Prescriptions for EndeavorRx increased 27% in the second
quarter of 2023 over the first quarter of 2023 and grew by 291%
over the second quarter of 2022.
- Prescriptions for EndeavorRx were written by 1,102 unique
prescribers in the second quarter of 2023, a 20% increase over the
first quarter of 2023 and 130% growth over the second quarter of
2022.
- In the second quarter of 2023, the number of new prescribers
grew by 16% over the first quarter of 2023, and the number of
repeat prescribers grew by 23% over the first quarter of 2023.
- The company’s EndeavorRx label expansion filing is under review
by FDA. If approved, the proposed label would expand the current
8-12 year old age range to include adolescents aged 13-17.
- On June 7, 2023, Akili announced the release of EndeavorOTC,
testing a new non-prescription model in the adult market following
the successful STARS-ADHD-Adult clinical trial in adults with ADHD.
- The product is currently available for purchase by adults on
the Apple App StoreⓇ.
- Akili is preparing to submit its adult clinical trial data to
FDA in the second half of 2023 to pursue marketing authorization
for EndeavorOTC as an over-the-counter treatment for adults with
ADHD.
Second Quarter 2023 Financial Highlights
- Cash position: Cash, cash equivalents, and short-term
investments as of June 30, 2023 were $105.8 million.
- Revenues: Total revenues for the second quarter of 2023
were $114 thousand compared to $113 thousand for the first quarter
of 2023.
- Billings: Total billings, a non-GAAP financial measure
defined as revenue plus the change in deferred revenue, during the
period were $170 thousand for the second quarter of 2023, compared
to $127 thousand for the first quarter of 2023.
- Total Operating Expenses: GAAP total operating expenses
were $15.3 million for the second quarter of 2023, compared to
$19.1 million for the first quarter of 2023, driven by reduced
stock-based compensation expenses and the impact of expenses
related to the workforce reduction in the first quarter of 2023.
Non-GAAP total operating expenses were $13.1 million for the second
quarter of 2023, compared to $14.0 million for the first quarter of
2023, driven by reduced general and administrative expenses, and
the wind-down of clinical trials.
- Net income (loss): GAAP net loss was $11.8 million for
the second quarter of 2023, compared to a net loss of $20.7 million
for the first quarter of 2023. Non-GAAP net loss was $12.6 million
for the second quarter of 2023, compared to a net loss of $13.6
million for the first quarter of 2023.
Reiterating Financial Guidance
2023 Non-GAAP Total Operating Expenses: Expected to be
between $55.0 million and $60.0 million, which excludes stock-based
compensation expense, an impairment loss on certain assets
associated with our sublease, and severance and termination-related
costs associated with the workforce reduction announced in January
2023.
Cash Runway: The Company’s cash, cash equivalents, and
short-term investments as of June 30, 2023, are expected to be
sufficient to fund current and planned operations into the first
quarter of 2025.
For additional information, please see the tables below, which
include a reconciliation of the historical non-GAAP financial
measures to GAAP financial measures.
Webcast and Conference Call
Akili will host a conference call and webcast today, Thursday,
August 10, 2023, 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, along with slides that may be referenced during the
call. An archived version of the webcast will be available on the
Company’s website following the event.
To access the call, dial 888-886-7786 (toll-free) or +1
416-764-8658 (international) and reference “Akili Second Quarter
2023 Earnings.”
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: total billings on a historical basis,
non-GAAP total operating expenses on a historical basis, non-GAAP
net loss on a historical basis and non-GAAP total operating
expenses on a projected 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, total
billings is defined as revenue plus the change in deferred revenue
during the period; the non-GAAP total operating expenses, and
non-GAAP total operating expenses on a projected basis, exclude
stock-based compensation expense, an impairment loss on certain
assets associated with our sublease and severance and
termination-related costs associated with the workforce reduction
announced in January 2023; and non-GAAP net loss excludes
stock-based compensation expense, an impairment loss on certain
assets associated with our sublease, severance and
termination-related costs associated with the workforce reduction
announced in January 2023, 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
historical non-GAAP financial measures to GAAP financial measures
is included in the attached financial tables. However, a
quantitative reconciliation of projected non-GAAP total operating
expenses to projected GAAP operating expenses is not available, nor
is the probable significance of such reconciling information, due
to Akili’s inability to predict with reasonable certainty the
amount of future stock-based compensation expense at this time.
EndeavorOTC Indication and Overview
EndeavorOTC is a digital therapeutic indicated to improve
attention function, ADHD symptoms and quality of life in adults 18
years of age and older with primarily inattentive or combined-type
ADHD. EndeavorOTC utilizes the same proprietary technology
underlying EndeavorRx, a prescription digital therapeutic indicated
to improve attention function in children ages 8-12. EndeavorOTC is
available under the U.S. Food and Drug Administration’s current
Enforcement Policy for Digital Health Devices for Treating
Psychiatric Disorders During the Coronavirus Disease 2019
(COVID-19) Public Health Emergency. EndeavorOTC has not been
cleared or authorized by the U.S. Food and Drug Administration for
its indications. It is recommended that patients speak to their
health care provider before starting EndeavorOTC treatment. No
serious adverse events have been reported in any of our clinical
studies. To learn more, visit EndeavorOTC.com.
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,” “prepare,” “pursue,” “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 plans to use the
STARS-ADHD-Adult study data in a regulatory submission with FDA to
obtain regulatory clearance for our over-the-counter product,
EndeavorOTC; our expectation regarding our ability to use
EndeavorOTC to directly and efficiently engage with adults
struggling with attention issues and ADHD; our expectation
regarding continued adoption of EndeavorRx, particularly with
mainstream medical practices; our expectation regarding the
potential label expansion for EndeavorRx to include adolescents
ages 13-17 with ADHD; our expectation that our regulatory
submissions to FDA for our EndeavorRx adolescent label expansion
and for our EndeavorOTC product for adults with ADHD, if
successful, will significantly increase the size of our ADHD market
opportunity; our expectation regarding our FY 2023 non-GAAP total
operating expenses; and our expectation that our existing cash,
cash equivalents, and short-term investments will be sufficient to
fund our current and planned operations into the first quarter of
2025. 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
further commercialize EndeavorRx and to obtain regulatory clearance
from FDA for a label expansion for EndeavorRx; our ability to
obtain over-the-counter FDA authorization and to successfully
commercialize EndeavorOTC; 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
risk of adverse macroeconomic or political changes 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 our 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
June 30,
March 31,
December 31,
2023
2023
2022
Assets Current assets: Cash and cash equivalents
$
56,266
$
87,869
$
54,097
Restricted cash
305
305
305
Short-term investments
49,576
29,571
82,034
Accounts receivable
84
49
41
Prepaid expenses and other current assets
2,493
3,531
4,565
Total current assets
108,724
121,325
141,042
Property and equipment, net
715
844
919
Operating lease right-of-use asset
1,929
2,427
2,596
Prepaid expenses and other long-term assets
95
1
—
Total assets
$
111,463
$
124,597
$
144,557
Liabilities and stockholders’ equity Current liabilities:
Accounts payable
$
1,457
$
1,413
$
2,681
Accrued expenses and other current liabilities
3,227
2,828
5,616
Deferred revenue
176
120
106
Operating lease liability
791
809
826
Note payable, short term
7,500
6,250
4,375
Total current liabilities
13,151
11,420
13,604
Note payable, long term
6,965
8,706
10,442
Operating lease liability, net of current portion
2,122
2,307
2,485
Corporate bond, net of bond discount
1,943
1,888
1,834
Earn-out liabilities
4,297
7,836
5,513
Other long-term liabilities
22
-
-
Total liabilities
28,500
32,157
33,878
Commitments and contingencies Stockholders' equity Common stock
8
8
8
Additional paid-in capital
355,738
353,429
350,980
Accumulated deficit
(272,758
)
(260,999
)
(240,288
)
Accumulated other comprehensive income (loss)
(25
)
2
(21
)
Total stockholders' equity
82,963
92,440
110,679
Total liabilities and stockholders’ equity
$
111,463
$
124,597
$
144,557
Akili, Inc. Unaudited Condensed Consolidated
Statements of Operations Three Months EndedJune
30, Six Months EndedJune 30, Three Months EndedMarch
31,
2023
2022
2023
2022
2023
Revenues
$
114
$
64
$
227
$
130
$
113
Cost of revenues
150
97
287
193
137
Gross loss
(36
)
(33
)
(60
)
(63
)
(24
)
Operating expenses: Research and development
4,633
7,358
10,717
13,662
6,084
Selling, general and administrative
10,648
14,948
23,659
30,339
13,011
Total operating expenses
15,281
22,306
34,376
44,001
19,095
Operating loss
(15,317
)
(22,339
)
(34,436
)
(44,064
)
(19,119
)
Other income (expense), net
3,558
(154
)
1,966
(321
)
(1,592
)
Net loss
$
(11,759
)
$
(22,493
)
$
(32,470
)
$
(44,385
)
$
(20,711
)
Akili, Inc. GAAP to Non-GAAP Reconciliation
Three Months EndedJune 30, Six Months EndedJune
30, Three Months EndedMarch 31,
2023
2022
2023
2022
2023
GAAP Total Operating Expenses
$
15,281
$
22,306
$
34,376
$
44,001
$
19,095
Stock-based compensation
(1,837
)
(1,969
)
(4,596
)
(4,039
)
(2,759
)
Impairment loss on sublease
(384
)
-
(384
)
-
-
Expenses related to workforce reduction
-
-
(2,329
)
-
(2,329
)
Non-GAAP Total Operating Expenses
$
13,060
$
20,337
$
27,067
$
39,962
$
14,007
GAAP Net Loss
$
(11,759
)
$
(22,493
)
$
(32,470
)
$
(44,385
)
$
(20,711
)
Stock-based compensation
1,837
1,969
4,596
4,039
2,759
Impairment loss on sublease
384
-
384
-
-
Expenses related to workforce reduction
-
-
2,329
-
2,329
Change in estimated fair value for earnout liabilities
(3,067
)
-
(1,054
)
-
2,013
Non-GAAP Net Loss
$
(12,605
)
$
(20,524
)
$
(26,215
)
$
(40,346
)
$
(13,610
)
Total Revenues
$
114
$
64
$
227
$
130
$
113
Deferred revenue, end of period
176
109
176
109
120
Deferred revenue, beginning of period
(120
)
(123
)
(106
)
(96
)
(106
)
Total Billings
$
170
$
50
$
297
$
143
$
127
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230810859819/en/
Investor: Santosh Shanbhag Chief Financial Officer
InvestorRelations@akiliinteractive.com
Media: Julie DiCarlo SVP, Communications
PR@akiliinteractive.com
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