Akili Co-Founder and CEO Eddie Martucci joins Yahoo Finance Live to discuss the digital medicine company's listing via a SPAC deal, its EndeavorRx treatment for ADHD through video games, and the ability to negotiate prices with insurers and families.
Video Transcript
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- Digital medicine company Akili started trading on the NASDAQ today under the ticker A-K-L-I. This comes after completing its SPAC merger with one of Chamath Palihapitiya's blank check companies. Joining us now is Eddie Martucci. He's the co-founder and CEO of Akili.
Eddie, it's great to see you. Certainly a tough day here, first trading day for your company although clearly wide losses across the board. My question for you is why do this via SPAC. We certainly have seen SPACs fall out of favor. I'm sure you've gotten this question a number of times over the last couple of months, so why did it make sense for you?
EDDIE MARTUCCI: Sure and it's a good question. No, we have a pretty bold vision. We are developing a brand new type of medicine modality that we're trying to take to millions of patients, and we're looking to start scaling that up. So to do that it takes capital, and it takes flexibility of growth. The SPAC deal here brings two things. It brings an amount of capital that I believe is hard to access outside of that vehicle and so to bring in over $160 million of operating capital is huge in a market like this right now.
And secondly, it brings partnership. And I thank our partners at Social Capital Suvretta. They are expert at bringing in companies that are early or new commercial models and disruptive models and growing those into big businesses. So really that made it for us the ideal transaction, and this is a growth vision for us. We're looking to grow this company over the next few years and institute this new type of medicine. We're not worried about an individual day in the market.
- And so then with that in mind then, how did you end up deciding that this would be what you would do in terms of differentiating yourselves from what's already out there.
EDDIE MARTUCCI: Yeah, so there's a lot in digital health. Digital health has become a kind of buzzword. There's a lot of companies out there that are taking human practices like behavioral therapy or they're taking medication reminders and they're putting those into an app and scaling those, and that's fine. What we have is pretty unique and pretty different. We have software that directly targets the areas of the brain that control cognitive and mental functioning.
And we have a vision that this type of product can actually be engaging like a consumer product and therefore allow it to scale like a drug, meaning ubiquitously in every household where people need it. For that, it's a pretty bold growth vision. This is not a niche play. This is not selling to employers. This is really to make this a household treatment for anyone who needs it. And so the product is differentiated, the vision is differentiated, and so I think our path to market here follows.
- Eddie, I have three kids, and most of us believe that video games are negatively impacting our kids, ADHD, and in fact, "The Journal of American Medical Association" said that teens who are heavy users of digital devices are twice as likely to show ADHD symptoms. How much convincing do you have to do for doctors, parents, and insurers that your video game helps in that capacity.
EDDIE MARTUCCI: Yeah, I agree with that by the way. I have three boys myself, and I'm very careful with digital technology. I think social media and digital technology creates a lot of problems in society and a lot of problems neurologically. That's why we took the last decade to clinically validate our product exactly like you would a medicine, a drug.
So we've run in ADHD alone five clinical trials, over 600 patients nationwide clinical trials, and went down an FDA path for FDA clearance. So this is the first and only prescription video game platform that's a treatment in the world. We also have a CE mark in Europe for the same use. So we've done I think the hard work up front to show it's clinically valid. We're now talking with doctors, and our goal here is to have docs and patients feel very comfortable and trust the company.
We've now seen pre-launch prescriptions come from doctors in every single state in the country, so we think that this investment is working. We think that the trust that we've spent a lot of time investing in is bearing itself out, and we're excited to scale this to as many doctors and patients who believe it would be useful.
- Doctors are one thing. Parents also pull their hair out with insurers. What has been the response from them about using a video game as medicine?
EDDIE MARTUCCI: Yeah, frankly, if this were a drug based on the clinical data we have, the FDA clearance, the fact docs are prescribing it, we believe this would be covered today. It is not yet widely covered, and that's the mission we're on. We have a full team now, a market access team that is working to educate and partner with insurers to make sure that they're aware of EndeavorRx, to make sure that they understand the differentiation of this product and the fact that it is available.
I think we've done that work, and my goal here is to see insurance cover this exactly like they would a medication. I think it's the right thing to do for patients. Insurers don't have to cover digital technologies in the same way they do drugs, but I think they should.
And so it will take some work. It will take some time. We're seeing some coverages start today, some less than 10%, but some patients are actually getting coverage from their insurers today. My goal is to have that number scaled dramatically over the next few years.
- Eddie, what's the cost of it for those who their insurance is not covering the cost of the game? What should they be expecting to pay out of pocket?
EDDIE MARTUCCI: Yeah, great question-- so we-- while insurance is not yet broadly covering, we ourselves will discount to allow patients to have access to this when they're paying out of pocket. And so that's around just under $100 a month out of pocket for families for this novel medical treatment. And we do also have a patient assistance program for people that are at low means where we do have full discounting to 0 for families that are at or near the poverty line. So we're going to keep doing that work to make sure this is affordable while insurers come on board.
- Really innovative stuff. Great having you on. Eddie Martucci there of Akili. Thank you so much.