Digital therapeutics company Akili is planning to merge with Virtual Therapeutics.
Upon closing, the combined organization would operate as privately held Virtual Therapeutics, with Akili as a wholly owned subsidiary. The transaction, which was approved by both companies’ board of directors, is expected to close in the third quarter of 2024, digital health company Virtual Therapeutics said in a news release Wednesday.
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Under the terms of the definitive agreement, Akili shareholders will receive 43.4 cents per share of common stock in cash. Akili's stock closed Tuesday at 41.8 cents per share.
Akili's common stock would not be listed on public exchanges after the deal's completion.
A Virtual Therapeutics spokesperson declined to comment on the leadership structure of the proposed combined entity.
The digital therapeutics sector has faced headwinds over the past few years, including reluctance from health insurance companies to cover the services. The proposed merger news follows Akili’s announcement last month that it had begun the process of evaluating potential strategic alternatives to maximize shareholder value.
Akili, which develops video game therapies for people with attention deficit hyperactivity disorder, announced in April it was eliminating its marketing and medical affairs teams. As a result, the company said it would “substantially reduce” promotional activity for its EndeavorRx and EndeavorOTC therapeutic video games. The cuts represented the third major layoff for Akili in 18 months.
The Boston-based company launched an initial public offering in August 2022 through a special purpose acquisition company. Its stock opened at $36.06 per share on its first trading day and closed at $7.15 per share.
