2022/01/26

Akili to Become Publicly Traded Through Combination with Social Capital Suvretta Holdings Corp. I

Akili’s leading digital therapeutic platform combines science and technology to address cognitive impairments in patients, reimagining how central nervous system medicines are designed, developed, and delivered

Transaction will support commercial launch of EndeavorRx®, a first-of-its-kind, FDA-cleared and CE-marked prescription digital therapeutic for pediatric ADHD, as well as advance clinical development pipeline across multiple neuropsychiatric diseases, including expanded ADHD populations, multiple sclerosis, autism, and depression

Transaction values the combined company at an equity value post-money of up to approximately $1 billion and is expected to provide up to $412 million in gross cash proceeds

Fully committed PIPE of $162 million led by $100 million from Social Capital with remaining $62 million from new and existing investors including: Suvretta Capital Management’s Averill strategy, Apeiron Investment Group, Temasek, co-founder PureTech Health, Polaris Partners, Evidity Health Capital, JAZZ Venture Partners and Omidyar Technology Ventures

Chamath Palihapitiya expected to become Chair of Akili’s Board of Directors upon transaction close

BOSTON, Mass. and PALO ALTO, Calif. – January 26, 2022 – Akili Interactive (“Akili” or the “Company”), a leading digital medicine company developing cognitive treatments through game-changing technologies, has entered into a definitive agreement to become publicly traded via a merger with Social Capital Suvretta Holdings Corp. I (“SCS”) (Nasdaq: DNAA), a special purpose acquisition company. The transaction is expected to close in mid-2022, after which Akili will be listed on the Nasdaq stock market under the new ticker symbol “AKLI.” As a public company with world-class backing and strong financial flexibility, Akili will be positioned to pioneer a new class of digital medicines for millions of people living with cognitive impairment.

New Digital Approach to Cognitive Medicine

The Akili software platform was built on the belief that directly engaging brain function is the next frontier of science and medicine. Cognitive impairments – including poor concentration, memory loss, difficulties learning new skills, and difficulties with decision making – are in aggregate among the largest unmet medical needs, and are increasingly recognized as contributing to or associated with dozens of chronic diseases and acute illnesses, including attention-deficit/hyperactivity disorder (ADHD), major depressive disorder (MDD), multiple sclerosis (MS), and autism spectrum disorder (ASD), as well as postoperative cognitive dysfunction and COVID-19 “brain fog.”

Despite the rapidly growing prevalence of these conditions, the acute exacerbation of these issues by the pandemic’s impact, and the chronic, escalating cognitive overload from the proliferation of on-demand attention-capturing technology, there has been limited innovation of novel treatment options. Specifically, current treatment options are designed to focus on symptoms and coping strategies instead of directly targeting cognitive functioning. These therapeutic shortfalls are especially concerning for younger populations who are potentially facing a lifetime of managing these conditions.

Akili’s First-of-Its-Kind, Clinically Validated Therapeutic

By harnessing advances in cognitive neuroscience and consumer technology, Akili is changing the neuropsychiatric treatment paradigm. Akili’s patented and clinically validated technology platform represents a new category of software-based medicine: advanced and proprietary digital therapeutics that are designed to directly target neural physiology to better serve the needs of patients and their families.

Akili’s core therapeutic engine, the Selective Stimulus Management Engine (SSME™), is specifically designed to target and activate neural systems involved in attentional control. This core platform has the potential to be applied across a diverse set of indications within psychiatry and neurology. Backed by robust clinical research, Akili’s treatments are delivered to patients through engaging interactive mobile games, personalized to each individual and built to feel like high-end entertainment products.

The SSME™ technology has already demonstrated proof-of-concept in controlled trials targeting attention and cognitive dysfunction in ADHD, ASD, MS, and MDD. Built on the SSME™ technology, Akili developed EndeavorRx®, the first-ever FDA-cleared prescription video game and the first-ever FDA-cleared commercial product indicated to improve attention function in children between the ages of 8 to 12 years with primarily inattentive or combined-type ADHD (see full indication below).

Key Investment Highlights:

Patented and clinically validated technology platform. Developed with the collaboration of cognitive neuroscientists and mobile game developers, Akili’s proprietary technology is designed to target key neural systems underlying specific cognitive functions through adaptable, personalized closed-loop algorithms. The technology is clinically validated, using recognized endpoints, and delivered through smartphones or other mobile devices.

First-and-only FDA-cleared video game-based digital therapeutic. Anticipated to launch in the second half of 2022, EndeavorRx® is the first and only prescription video game treatment with FDA clearance and a CE mark (designating it has met European health, safety, performance, and environmental requirements) in pediatric ADHD. EndeavorRx® has been validated through multiple clinical trials, including large randomized, controlled trials demonstrating improved patient outcomes.

Large and growing market opportunity. Tens of millions of people worldwide live with cognitive health issues, and many are actively searching for better solutions. With EndeavorRx®, Akili is initially targeting the approximately $10 billion U.S. ADHD market. EndeavorRx® will first launch for the FDA-cleared 8 to 12-year-old pediatric population. Akili is also seeking to expand into other U.S. ADHD populations, including younger children (3 to 7 years old), teens, and adults, while simultaneously working with a partner to gain approval as a treatment for pediatric ADHD in Japan.

Strong clinical rigor. Akili has completed 20 clinical trials across 2,900 patients and nine disease populations. In addition, Akili’s clinical studies and data have been published in 16 leading peer-reviewed journals.

Robust research and clinical pipeline. Akili has a strong development pipeline, initially focused on treatments for cognitive impairments across nine patient populations. In addition, Akili is progressing early discovery for two new platform technologies to address additional cognitive impairments and facilitate broader reach across disease spectrums. Akili is poised to begin pivotal studies in multiple indications where proof-of-concept has been achieved, including additional ADHD populations, ASD, MS, and MDD.

Management Comments

Eddie Martucci, Chief Executive Officer of Akili, said: “This transaction represents the next step in our journey to become the world’s leading digital medicine company directly targeting neurological function. Over the past 10 years, we have created a platform representing a new era of cognitive medicine, driven by our fundamental focus on patients, advanced science and proprietary technology, and the mission-driven hard work of our entire team. We believe medicine now can be both effective and engaging. Social Capital Suvretta shares our vision for the future, and we look forward to applying our combined experience as we drive the commercialization of our platform and advance our deep pipeline of prescription digital therapeutics to help people living with cognitive impairments across the globe.”

Chamath Palihapitiya, Founder and CEO of Social Capital and Chairman and CEO of SCS, commented: “Akili is taking a new approach to cognitive science – using software to target our underlying cognitive function and creating an entirely new class of medicine as a byproduct. With its first-ever, clinically validated digital therapeutic (EndeavorRx®), Akili has the unique opportunity to change how we treat pediatric ADHD. They have also laid the groundwork to treat a wide range of other cognitive issues affecting tens of millions of people around the world.”

Kishen Mehta, Portfolio Manager of the Averill strategy at Suvretta Capital Management and President of SCS, said: “Akili has created a unique disease-agnostic technology platform with an advanced pipeline of product candidates across multiple indications where proof-of-concept has already been achieved. The Company is leading the advancement of digital cognitive therapies with an FDA-cleared product already on the market, and we believe Akili has only just scratched the surface of this new and exciting field of medicine. We look forward to working with Akili to accelerate the Company’s growth and allow it to continue developing treatment options for the hundreds of millions of people living with cognitive impairments.”

Transaction Overview
The transaction implies a post-money equity value of the combined company of up to approximately $1 billion and is expected to deliver up to $412 million in gross cash proceeds to the Company, including the contribution of up to $250 million of cash held in SCS’s trust account and $162 million from PIPE investors at $10 per share. All references to available cash from the trust account and retained transaction proceeds are subject to any redemptions by the public shareholders of SCS and payment of transaction expenses. Akili plans to use the net proceeds to help fund the Company’s go-to-market strategy, to further advance its pipeline of prescription digital therapeutics targeting a range of chronic and acute cognitive disorders, and for other general corporate purposes.

Existing Akili shareholders will roll 100% of their equity into the combined company and will be eligible to receive additional SCS shares pursuant to an earnout based on the combined company’s future stock performance.

Chamath Palihapitiya is expected to join Akili’s board of directors as chair, upon the close of the transaction.

The proposed business combination, which has been unanimously approved by the boards of directors of both Akili and SCS, is expected to close in mid-2022, subject to approval by SCS’s and Akili’s shareholders, regulatory approvals, and other customary closing conditions.

Advisors
Morgan Stanley & Co. LLC (“Morgan Stanley”) and Cowen and Company, LLC (“Cowen”) are serving as financial advisors to Akili. Morgan Stanley, Credit Suisse, and Cowen are serving as co-placement agents to SCS with respect to the portion of the PIPE financing raised from non-insider qualified institutional buyers and institutional accredited investors. Morgan Stanley, Credit Suisse, and Cowen are not acting as agents or participating in any role with respect to, and will not earn any fees from, the portion of the PIPE financing raised from insiders and individual investors. Credit Suisse and Cowen are serving as capital markets advisors to Akili. BofA Securities, Inc. is acting as capital markets advisor to SCS.

Goodwin Procter LLP is serving as legal counsel to Akili. Wachtell, Lipton, Rosen & Katz is serving as legal counsel to SCS. Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor to the PIPE placement agents.

Press Release

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