Akili Inc., a Boston-based leader in digital therapeutics, is undergoing a major transformation. The company announced that it will lay off 40% of its staff as part of a strategic shift away from its long-standing prescription model. This change comes as Akili pivots toward a non-prescription, consumer-led approach for its digital therapeutics products, marking a significant shift in its business model. These changes are expected to help Akili regain greater control over its growth while continuing to offer innovative digital health solutions.
For years, Akili has been at the forefront of digital therapeutics, particularly with its FDA-cleared product, EndeavorRx, which was designed to treat children aged 8 to 12 with inattentive or combined-type ADHD. Akili had previously advocated for its digital therapeutics to be covered under health plans, relying on healthcare professionals to prescribe access. However, in a strategic pivot, the company is now opting to move away from this prescription-based model in favor of a direct-to-consumer subscription approach, which will simplify access to digital therapeutics and reduce reliance on intermediaries like physicians and insurers.
Eddie Martucci, Akili’s CEO and co-founder, explained that this shift to a non-prescription model would give the company more control over its growth, reducing its dependence on payers to cover its products. With digital therapeutics being a rapidly growing sector in healthcare, Martucci believes this approach will allow Akili to build a more sustainable, long-term business model, enabling them to reach a broader audience with less operational complexity.
The decision to lay off 40% of the workforce, particularly within the field sales force and market access teams, is a direct result of this change in strategy. These two teams, which represent two-thirds of the workforce reduction, were originally essential for navigating the prescription model and engaging with healthcare providers and insurance companies. By shifting to a consumer-focused model, Akili no longer needs to maintain such a large sales force, allowing the company to redirect resources and streamline operations.
A key driver behind this strategic shift is the early success of Akili’s non-prescription product, EndeavorOTC. This version of EndeavorRx, which was introduced as a non-FDA-approved digital therapeutic for adults, has shown promising results. In its first three months on the Apple App Store, EndeavorOTC attracted 126,000 first-time downloads, with 4,200 active users. The app generated an average of $81.88 per user and made $341,000 in total revenue. Additionally, the product boasted a strong two-month retention rate of 67%, indicating high engagement and satisfaction with the digital therapeutics offering.
Akili’s shift to a non-prescription model aims to streamline access to ADHD treatments and potentially expand into new markets, such as anxiety, depression, and other mental health conditions. This pivot also removes many of the barriers traditionally associated with prescription treatments, such as the need for insurance approval or physician referrals. The company hopes that by making digital therapeutics more easily accessible, it can serve a larger, underserved population and improve outcomes for individuals with ADHD.
As part of this strategic overhaul, Akili is also working to secure FDA approval for EndeavorOTC to be sold over-the-counter. The company plans to present new clinical data to the FDA in hopes of receiving regulatory clearance, which would allow Akili to sell EndeavorOTC without a prescription. Additionally, the company plans to seek over-the-counter approval for EndeavorRx in 2024, further expanding the availability of their digital therapeutics products.
This change in strategy marks the second round of layoffs for Akili in 2023, with the company previously reducing its workforce by 30% earlier in the year to extend its financial runway. With these recent changes, Akili projects that its cash runway will now extend through the second half of 2025, providing the company with ample time to execute its new strategy and ensure the long-term success of its digital therapeutics offerings.
While the digital therapeutics space has faced significant challenges in recent years, Akili is confident that its new direction will lead to greater financial stability and growth. The company joins other digital health innovators who are shifting focus to direct-to-consumer models in order to avoid the high costs and regulatory hurdles associated with prescription models. With the success of EndeavorOTC and a clear path forward, Akili believes its digital therapeutics solutions will continue to make a meaningful impact on the lives of individuals with ADHD and beyond.
In the evolving landscape of digital therapeutics, Akili’s shift toward a consumer-driven, non-prescription model represents a bold step toward greater accessibility and control in the digital health space. With this new approach, the company aims to broaden its reach, optimize its revenue streams, and ultimately provide more individuals with the opportunity to benefit from innovative digital health solutions.
