Akili Interactive’s decision to launch a non-prescription version of its digital therapeutic (DTx) for attention-deficit hyperactivity disorder (ADHD) is credited with an increase in revenues, although it still has a long road to profitability ahead.
The new EndeavorOTC app – which launched in the summer and is targeted at adults with ADHD – helped Akili to a rise in revenues to $702,000 in the third quarter from $114,000 in the prior three-month period.
Gross margins also firmed up to around 60% from 32% in the second quarter, but operating expenses swelled to $18.8 million from $15.3 million, an increase largely attributed to costs associated with the EndeavorOTC rollout. Akili ended the period with cash reserves of around $86 million.
Akili is trying to build a revenue stream for the digital therapeutic that doesn’t depend on the need for reimbursement approval, a well-recognised challenge for developers of prescription digital therapeutics (DTx) products, and also greatly expands the eligible patient population.
It is still selling the EndeavorRx version of the software for ADHD in children and recently filed for approval to extend the age range for the DTx to include adolescents aged 13 to 17, with a decision on that expected in 2024. Ultimately however the plan is to file with the FDA to switch the paediatric version of the DTx from prescription to OTC status.
The company formally filed for approval of EndeavorOTC last month, but has been making the app available without a prescription in the meantime and made $553,000 in revenues from that version in the third quarter. It generated 176,559 first-time app downloads in the period and currently has 7,535 users with a paid subscription.
The app – which costs a little under $11 per month for a subscription – revolves around gameplay that challenges users to tap targets and navigate obstacles to boost attention and focus.
“We are pleased with early results of our previously-announced strategic shift from a prescription to a non-prescription business model focused on EndeavorOTC,” commented Matt Franklin, Akili’s chief executive.
“It’s clear that there is strong demand from individuals struggling with ADHD, and that they are actively seeking new treatment options,” he said. “Our direct-to-consumer strategy removes accessibility barriers to this clinically-validated treatment.”
The digital health company estimates that around seven million adults in the US are living with ADHD, so there is potential for revenue to climb quickly if it can tap into that population, particularly among those unable or unwilling to use ADHD drugs.
There is considerable attention being paid to Akili’s ability to build a succesful direct-to-consumer business to avoid the fate of other companies in the DTx category, notably Pear Therapeutics, which went bankrupt despite bringing three products to market.
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