Akili to merge with Virtual Therapeutics in $34M deal

Akili, known for its digital therapeutics for ADHD, has agreed to merge with Virtual Therapeutics in a $34 million deal set to close in the third quarter of 2024. Akili shareholders will receive $0.4340 per share in cash, a 4% premium over the closing stock price on May 28. Post-merger, the combined entity will operate under the Virtual Therapeutics brand, and Akili will no longer be publicly traded. The merger aims to leverage Akili's expertise in digital therapeutics with Virtual Therapeutics' VR-based mental health solutions to create a comprehensive mental health platform.

This merger follows Akili's recent efforts to find strategic alternatives to enhance shareholder value. The company announced a significant restructuring plan, including a 46% workforce reduction and cuts to its promotional activities for EndeavorRx and EndeavorOTC products. Despite these reductions, Akili continues to seek FDA clearance for its EndeavorOTC product. The company's board has approved a revised operating plan and budget for the rest of the year to support these changes.

Financially, Akili reported first-quarter 2024 revenue of $383,000, down from $749,000 in the fourth quarter of 2023, and a GAAP net loss of $9.8 million. Operating expenses were reduced to $11.1 million from $12.1 million in the previous quarter, and cash reserves stood at $63.2 million at the end of March 2024, down from $75.2 million at the end of December 2023.