Using AR to treat Depression and Alzheimer’s Disease?: Akili Interactive
Akili Interactive using AR technology to treat Alzheimer’s Disease, Depression and ADHD
What is Akili Interactive?
Akili Interactive is a digital medicines company developing cognitive treatments and assessments through a video game interface. As an augmented reality platform, Akili uses its technology based on cognitive science to treat neurological conditions. Akili’s first product, Evo is currently in clinical trials for ADHD and seeking FDA approval. Akili is also exploring applications of its technology in a number of conditions including Alzheimer’s disease, depression and autism.
Akili is funded by some of the top biopharma and biopharma VCs including Pfizer, Shire, Merck Ventures and Amgen Ventures. Akili was founded in 2011 and has raised a total of $72.9M, including $42.4M in their Series B round in July 2016. [1]
Project Evo
Akili’s main therapeutic video game, called Project Evo is used to keep track of a user’s movements. The game was designed by Dr. Adam Gazzaley, at the University of California, San Francisco to improve executive function. To play the game, a user navigates an alien avatar on a course by tilting a mobile device forwards and back and responds to targets the alien faces by tapping the screen. The game is dynamic and tracks real-time performance so that the game adapts difficulty based on how the player is performing. [2]
Valuation Creation
By using augmented reality technology, Akili is providing a non-pharmacological treatment to patients suffering from neurological conditions. The company is in clinical trials for ADHD, which the founder and CEO Eddie Martucci predicts will receive FDA approval by end of this year. [3] The trial, called STARS-ADHD is recruiting non-treated ADHD diagnosed children to play the game, measuring outcomes related to attention and impulsivity. [4] Akili also partnered in 2014 with Pfizer to study impact of the game on Alzheimer’s disease, and partnered with Duke to run trials in ADHD and autism. Most recently, a number of published articles demonstrated Project: Evo game’s efficacy in improving focus, mood and attention compared to behavioral therapy. [5]
The ability for a non-pharmaological treatment to treat conditions like ADHD can be a huge benefit, especially for children who often experience symptoms related to medications like Ritalin and Adderall, such as loss of appetite, insomnia and increased blood pressure and heart rate.
Value Capture
If Akili’s product is approved, it would be the first video game to be approved by the FDA for a therapeutic treatment. The reimbursement of this drug is hinged on approval. It is likely payments will probably be comparable or markedly less than current ADHD drugs on the market including Ritalin. Based on the formulary tier an ADHD drug is designated, an ADHD drug can cost anywhere from $15/month for a generic to $200-300/month for brand name drugs like Adderall and Ritalin [6]. I would recommend a subscription value capture model so the company can establish a steady stream of revenue. I would also price it at a roughly 50% discount to brand name drugs, assuming similar if not superior efficacy. It is likely this non-therapeutic treatment will be seen not as a replacement for pharmacological treatments but as an additive therapy to the drugs or a way to decrease current drug dosage of ADHD children’s prescriptions.
Recommendations to Grow
The applications for Akili’s software is enormous for the treatment of neurological conditions. Clinical approval of a treatment has a much higher risk but also a higher reward profile for Akili. As the first possible non-pharmacological treatment for ADHD, the success of the company hinges not only on results that the technology improves both primary and secondary ADHD endpoints, but also that health plans will pay for it. An important decision the company will have to think about if the clinical strategy is not successful is whether there is merit to pivot and market this product direct-to-consumers as an educational tool. On the other hand, the education and marketing investments required of a consumer company would differ extensively from Akili’s clinical product.
Great post! I find it fascinating that you used the word “drug” to describe the video game treatment. I have heard that ADHD is over-diagnosed and the typical drugs are over-prescribed, so I like the idea of a treatment with fewer side effects. I also wonder if this video game could be used to diagnose diseases such as ADHD and Alzheimer’s since it is tracking the players’ real-time performance.