digital therapeutics
Akili dumps old biz model, will lay off 40% of staff
Akili Interactive, maker of an FDA-cleared video game that's designed to improve ADHD symptoms in children, announced on Wednesday that it would pivot from selling its app by prescription only to an over the counter business model.
Akili was part of a vanguard of so-called prescription digital therapeutics companies, but its move away from a prescription business model is not surprising. It has proven very difficult to convince insurers to pay for prescription apps, and at least one PDT company already auctioned off its assets in bankruptcy earlier this year.
Though Akili still had money in the bank, it was bleeding cash on very light revenue, and it began experimenting with an over-the-counter model for its new adult version of its app. With reasonable traction — $341,000 in revenue in three months — the company decided to give up on prescriptions. It plans to submit data to convert its pediatric product to over the counter next year.
As part of the strategy change, Akili will lay off 40% of staff. The company now estimates its cash will last into the second half of 2025.
Of course, selling directly to consumers has not proven to be a reliable path to success for digital health companies. At least now Akili has slightly more time to figure it out.
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Gatekeepers
Up close with General Catalyst's hospital whisperer
Venture capital giant General Catalyst has big plans for how it can transform the health care system by trying to strike deep partnerships with the health systems that must embrace startups with big ideas. Daryl Tol is in charge of greasing the wheels. GC last year announced a $670 million health fund and put Tol in charge of the firm's "health assurance ecosystem," a network of more than a dozen partners, including Jefferson Health, Intermountain Healthcare, and UC Davis Health, and which will soon expand to include insurance companies as well.
Tol, a former executive at AdventHealth, has been on the receiving end of many bad pitches. And colleagues told STAT's Mohana Ravindranath that he's got a knack for helping startups shape their messages and for penetrating hulking bureaucracies to get founders in front of the right executive to make a deal.
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Fundraising
Generative AI deals in health care
Pitchbook
Have you heard enough about generative AI's potential in health care yet? These are the companies that want to make sure you keep hearing about it over and over again. Pitchbook's roundup of Healthcare IT dealmaking from the first half of 2023, highlights notable companies that managed to ride the hype to funding — even as dealmaking across the board remains in a lull. The sector picked up over $250 million in funding in the first half, according to Pitchbook. (Be sure to check out STAT's Generative AI Tracker, where we're keeping tabs of the experimentation that's happening with generative AI in health care.)
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