USA – Akili Interactive, a digital therapeutic platform, intends to go public through a merger with Social Capital Suvretta Holdings via a special purpose acquisition corporation (SPAC).

The transaction is expected to generate up to US$412 million in gross cash proceeds for the digital therapeutics startup, valuing the combined company at around US$1 billion.

The transaction includes a US$162 million private investment in public equity (PIPE) raise, with Social Capital contributing US$100 million and the remainder coming from new and existing investors.

The transaction is expected to close in the middle of the year, according to the companies. Akili will then trade under the ticker symbol “AKLI” on the Nasdaq.

This transaction is seen as a stepping stone for bigger ventures in the space of digital medicine.

This transaction represents the next step in our journey to become the world’s leading digital medicine company directly targeting neurological function,” Akili CEO Eddie Martucci said.

Akili said it will use the proceeds from the merger to support the commercial launch of its FDA-cleared EndeavorRx digital therapeutic in the second half of 2022 and expand its pipeline of products to treat other cognitive disorders, including autism spectrum disorder, major depressive disorder and multiple sclerosis.

The company is also attempting to get the product approved for pediatric ADHD in Japan.

Chamath Palihapitiya, founder and CEO of Social Capital and chairman and CEO of SCS, said, “Beyond ADHD, there is a potential for long-term growth as each patient uses their product and the product suite grows, potentially creating a household brand that is known for cognitive improvement across ages and conditions.”

In May, Akili received US$110 million in Series D funding, as well as another US$50 million in debt financing.

The funds would be used to broaden the company’s scope of care and to conduct research on how to treat other cognitive disorders, according to the company.

EndeavorRx received FDA De Novo clearance in June 2020, making it the agency’s first game-based therapeutic approved for any condition.

Due to the pandemic, the FDA relaxed requirements for digital health devices treating psychiatric disorders in April 2020, allowing the product to be launched for a limited time.

SPACs have become a popular way for digital health companies to enter public markets. SPAC mergers were completed last year by digital prescription therapeutic company Pear Therapeutics, baby tech company Owlet, teletherapy company Talkspace, and digital health chatbot Babylon.

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