BOSTON - Akili, Inc. (NASDAQ: AKLI), a digital medicine company, announced a series of corporate changes, including an amendment to its agreement with Shionogi & Co., Ltd., a global pharmaceutical company. The amendment includes the cancellation of a $5.0 million debt and upfront payments to Akili totaling $10.5 million, with additional potential payments tied to development services and regulatory milestones.
The Boston-based company disclosed that it would receive at least $1.5 million upfront for development and support services, with the possibility of an additional $3.0 million contingent on regulatory achievements related to its digital treatment, SDT-001, which is under review in Japan for children and adolescents with ADHD.
In a strategic pivot, Akili's board of directors has initiated an evaluation of potential strategic alternatives to enhance shareholder value, with no guaranteed outcome or timeline. The company will also undergo a restructuring that includes a workforce reduction of approximately 46%, targeting a decrease in operating expenses. This reduction will eliminate Akili's marketing and medical affairs teams.
Despite the cutbacks, Akili will maintain support for current users of its products, including EndeavorRx and EndeavorOTC, and will continue to seek marketing authorization from the FDA for EndeavorOTC, which is still under review.
Akili is set to release its first quarter financial results for 2024 on May 14, after the market closes, but will not host an earnings conference call.
The news comes as Akili continues to navigate the digital therapeutics field, with its EndeavorRx prescription treatment designed to improve attention function in children with ADHD. EndeavorOTC, which has not received FDA clearance or authorization, targets similar outcomes in adults.
The company's decision to explore strategic alternatives and restructure its operations is based on information contained in a press release statement. Akili's future plans, including the success of its digital treatments and the outcome of its strategic review process, remain uncertain and are subject to various risks and regulatory considerations.
InvestingPro Insights
Akili, Inc. (NASDAQ: AKLI) is undergoing significant corporate restructuring, aiming to streamline operations and enhance shareholder value. As investors consider the implications of these changes, certain financial metrics and analyst insights from InvestingPro stand out.
Akili's market capitalization is currently at $18.46 million, reflecting the market's valuation of the company. Despite a staggering revenue growth of 419.5% over the last twelve months as of Q1 2023, the company's operating income margin during the same period was deeply negative at -3842.97%, highlighting the challenges it faces in translating top-line growth into bottom-line profitability.
InvestingPro Tips suggest that while Akili holds more cash than debt, which is a positive sign for financial stability, the company is quickly burning through cash, which could raise concerns about its long-term sustainability.
Moreover, analysts do not anticipate the company will be profitable this year, which aligns with the reported operating income margin. Additionally, the stock has experienced significant price volatility, with the price having fallen by 77.84% over the last year, signaling a tough period for investors.
For those considering an investment in Akili, these insights may help in assessing the company's financial health and future prospects. It's also worth noting that there are 13 additional InvestingPro Tips available for Akili, which can provide further depth to your analysis. To explore these tips and gain a comprehensive understanding of Akili's financials and market performance, you can visit https://www.investing.com/pro/AKLI and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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