Issue 163

Welcome back to E&O Fridays, a paying subscribers-only weekly newsletter focused on the world of digital pharma products and FDA-regulated digital health.

E&O Fridays.

Here are a few bullets on what’s going on in FDA-regulated and pharma-focused digital health:

Last call: Thanks again to everyone who took the E&O Reader Survey. I’m going to leave it open for responses over the weekend and then close it down Monday. If you were away last week, here’s your chance to shape future editions of E&O newsletters and long-form reports.
Just For Women: Germany’s aidhere managed to secure a permanent listing for its weight loss prescription digital therapeutic, zanadio, in that country’s formulary for reimbursed digital therapeutic programs (DiGA). (A company can be provisionally listed while it awaits results from its clinical trial to prove its worth and seek permanent placement on the formulary.) Interestingly, the German regulators were not convinced by the company’s clinical trial results for its study’s male cohort, so zanadio is now marketed as a weight loss program for women only. It retains its longstanding price point of €499.80.
The Digital Therapeutics Alliance sent a lengthy letter to CMS with comments on the proposed Physician Fee Schedule for 2023. Many of the comments focused on the agency’s proposed tweaks to the Remote Therapeutic Monitoring (and related) billing codes. However, one jumped out at me. The DTA implored CMS to do more to help Medicaid plans adopt these new codes: “CMS Must Help State Medicaid Plans Implement the Newly Proposed Remote Therapeutic Monitoring HCPCS G Codes GRTM1/2/3/4 to Avoid Payment Delays. There is structural inequality created by the processes whereby Medicare uses HCPCS Level 2 codes without providing adequate technical assistance and support with state Medicaid programs. This lack of organizational and technical support often results in non-coverage of medically accepted services throughout state Medicaid programs.”
One more thing… Prescription digital therapeutics company Blue Note Therapeutics landed a customer this past week: The Oncology Institute (TOI). TOI employs more than 90 clinicians and more than 700 total employees to provide “cancer care to a population of approximately 1.7 million patients including clinical trials, stem cell transplants, transfusions, and other care delivery models.” The deal details are sparse but straightforward: “Blue Note’s cancer-specific prescription digital therapeutic attune is the first digital therapeutic designed to treat anxiety and depression symptoms related to cancer. Attune will be available to all eligible [The Oncology Institute] patients by prescription.”

Did a friend forward this to you? You, too, can win friends and influence people via newsletter forwards by clicking right here. Become the newsletter-forwarder we both know you were meant to be. Act fast! This offer won’t last forever (I am not immortal).

Akili’s falling average sales price, product revenue to date, and public listing on Nasdaq

The big news this past week is that Akili (formerly known as Akili Interactive Lab) is now a publicly listed company on Nasdaq. You likely already read about the details of the public debut (including the $163 million it raised for the company), so I’ll dig into a few things the company quietly included in its SEC filings this week while the news of going public dominated headlines… Most notably, the company released numbers for its second quarter. The table below has all of the key non-financial numbers, but I’ll sum up and call out a few of these first in case squinting at the table in an email newsletter is too hard to read. Average Sales Price for EndeavorRx

Akili included a new data point in its table this time around: average sales price (ASP) for its first commercial product, EndeavorRx. The ASP for the prescription digital therapeutic fell slightly from $308 in 2021 to $297 in Q1 2022. It dropped all the way to $109 in Q2. A quick look at the EndeavorRx website shows the consumer-facing price point is “no more than $99” (and has been for a while now). As I mention again below, Akili still seems to intend to seek a $450 price point in its negotiations with payers.

Akili’s other numbers are up slightly when compared to Q1 2022, but the company compares Q2 2022 to that same quarter the year before, which nets a much bigger growth percentage:

Rx: New prescriptions jumped to 602 in Q2 2022 up from 503 in Q1 2022. Refills edged up to 170 in Q2 from 165 in Q1. Total Rx also increased to 772 in Q2 from 668 in Q1.
Prescribers: Akili had 480 total prescribers in Q2 up from 437 the quarter before. Some 274 of them were new, up from 239 new prescribers in Q1. Akili tweaked one of its metrics to “Conversion (written to dispensed)” from “Conversion (written to enrolled)”. The new percentage shows an uptick to 52 percent in Q2 up from 39 percent in Q1 and 44 percent for all of 2021.
Reimbursement and cash-pay: Finally, Akili’s numbers show just how dominant cash-pay has become as a revenue stream for the company. Some 93 percent of total prescriptions were self paid in Q2, up from 89 percent in Q1. Meanwhile, only 3 percent of Q2 prescriptions were reimbursed by health insurance. That’s down from 4 percent in Q1 and 10 percent in 2021.
Covered lives: Akili’s total covered lives remain the same quarter-to-quarter at about 2.6 million.

Akili’s official S-1 filing also included a ton of information. I dug through it for some updated financial numbers and the most up-to-date version of the company’s go-to-market strategy. Keep in mind that Akili describes all of its activity around EndeavorRx to date as “pre-launch”. Akili’s revenue figures

Akili brought in $130,000 in total revenue for H1 2022. That’s down from the $222,000 the company posted for the first half of 2021. The company’s total revenue for 2021 was $539,000. In 2020 it posted $3.9 million in revenue. All figures prior to 2022, however, are muddied by revenue from Akili’s collaboration agreements, especially its agreement with Shionogi for a version of its flagship prescription digital therapeutic for the Japanese market. So, only the 2022 figure is pure product revenue.

Akili’s go-to-market details:

Marketing to parents of kids with ADHD: “We intend to drive consumer demand via a ‘digital first’ approach, including closed-loop marketing using e-commerce, a broad influencer program and activations to drive word-of-mouth.”
How it will sell to prescribers: “We intend to use a therapeutic sales model with a strong salesforce and integrate telemedicine. The physician targets consist of pediatricians, psychiatrists and health care practices that are considered to be Centers of Excellence that focus on children with ADHD. We have seen that our data, published in leading peer review journals like Lancet and Nature, generates significant credibility with this key stakeholder group, which we will continue to leverage. This approach, combining a proven therapeutic sales model with telemedicine, is designed to enable seamless access to care by physicians.”
Early conversations with payers: “Our first market has a unique characteristic where the consumer, caregivers of children with ADHD, have a high willingness to pay cash out-of-pocket to help their children. They already spend on approaches beyond drugs, including psychotherapy, dietary supplements, after-school programs, online programs, etc. We expect that our clinically-validated treatments will increasingly be covered by commercial and government payers and, in the interim, we have a cash pay model that allows for expanded access to EndeavorRx. We have a dedicated market access team that is focused on top commercial national and targeted regional plans as well as government payers. Our early conversations with payers indicate that they consider ADHD treatments to be an essential need and we believe that our price point, $450 for a 90-day prescription, is reasonable considering generics in this space. In combination, Akili’s approach with payers prioritizes expanded access to EndeavorRx across more families seeking new therapies while ensuring a path is available for the unique self-pay characteristic of the market as we build expanded coverage over time.”

Finally, Akili’s advertising spend

As noted above, Akili plans to use a “digital-first” marketing strategy to reach consumers, and E&O has previously reported on the company’s influencer campaigns on social networks like Instagram in past issues of this newsletter. However, Akili appears to have spent very little on ads so far: “[Akili] expenses advertising costs as incurred. Advertising expenses were [$1,845,000] and [$5,937,000] during the three and six months ended June 30, 2022. Advertising expenses were [$2,847,000] and [$2,867,000] during the three and six months ended June 30 2021.”

Clinical trial updates from Verily, Akili, MedRhythms, Big Health, NightWare, and Calm

This is a recurring feature of E&O Fridays that digs into new digital health-related clinical trials as well as updates to others E&O mentioned in previous issues.

New: Study from Akili on AKL-T01 for post-stroke depression with executive dysfunction in adults

Academic researchers quietly published details on a new study that focuses on Akili’s flagship AKL-01 digital therapeutic in an adult population diagnosed with post-stroke depression with executive dysfunction. More on the anticipated 70-participant trial here:

“Post-stroke depression with executive dysfunction (DED) is associated with persistent mood and cognitive disturbance, poor social functioning, and disability. Existing interventions have limited evidence of efficacy, side effects, and can be difficult for stroke patients to access. This study aims to evaluate a remote digital intervention for post-stroke DED that combines iPad-based cognitive training using a program called AKL-T01 with virtual coaching to improve executive dysfunction, depression, and daily function after stroke. The primary hypothesis is that individuals randomized to the intervention arm (AKL-T01 + coaching) will demonstrate greater improvement in their executive functioning and depression symptoms and daily function relative to the comparator arm. The secondary hypothesis is that individuals randomized to the intervention arm will demonstrate greater increase in the functional connectivity of the executive control network (ECN, assessed with an MRI scan) at the conclusion of treatment, relative to participants randomized to the comparator arm.”

Pushed back: Akili expects to complete its adult ADHD study, which is still recruiting, in April 2023 now instead of this month as originally planned.

New: Big Health and Oxford study Sleepio as part of a stroke rehab program

More on the study here:

“The purpose of this study is to determine whether NightWare therapeutic intervention improves biomarkers of vascular aging and autonomic function in adults with nightmares related to PTSD.”

Now recruiting: Boston University’s study of MedRhythms prescription digital therapeutic for Parkinson’s Disease

More on this (anticipated) 44-person study here:

“The main aims of the study seek to examine if Amped-PD (Experimental Intervention) is more effective than a standard-of-care walking program (Active-Control Intervention) in improving physical activity based on moderate intensity walking (Aim 1), and in improving motor deficits related to quality of walking (Aim 2) in individuals with mild-to-moderate PD. Additionally, this study will examine whether habit formation mediates the relationship between the intervention (Amped-PD or Active-Control) and physical activity (Aim 3). The investigators hypothesize that Amped-PD will have greater improvements in amounts of moderate intensity walking and stride-to-stride variability based on stride length and swing time. Further, habit formation will be one mechanism that will explain the link between the intervention and physical activity. Secondary research aims will examine whether Amped-PD is more effective than Active-Control in improving motor and non-motor features based on short- and long-distance walking function, spatiotemporal measures of walking, step activity based on daily step counts, disease severity scores, quality of life, self-efficacy on walking, and depression.”

New and Recruiting: Verily’s Personalized Parkinson Project PSP Cohort study

Here’s an interesting study from Verily, UCB Pharma and study sponsor Radboud University Medical Center that focuses on a form of atypical parkinsonism, Progressive Supranuclear Palsy:

“There is an urgent need for the development of digital progression biomakers, which are sensitive to detect small, but potentially clinically relevant changes in the disease course. Digital biomarkers are based on (i) continuously collected real-time data, during the patient’s day to day activities; and (ii) task-based assessment. In this study the investigators are interested in developing algorithms for the detection of disease progression in PSP patients in key clinical parameters: bradykinesia, gait, rising from a chair and falls, based on (i) sensor data obtained by means of passive monitoring during daily living; and (ii) sensor data collected during the Virtual Motor Exam.”

Terminated: Calm’s study on reducing stress and improving sleep during pregnancy

The company said it terminated the study because of a personnel change. The study was supposed to finish in September, but it had only recruited four participants of the hoped-for 180:

“Purpose: Test the effects of using Calm for its impact on stress, anxiety, and sleep in pregnant women using the following aims: Aim #1: Determine the feasibility of using Calm. Aim #2: Determine the preliminary efficacy of using Calm on stress, anxiety, and sleep. Exploratory Aim #3: Explore the preliminary efficacy of using Calm on self-reported birth outcomes”

Links to E&O’s reports, databases, newsletters

The Exits & Outcomes site is designed to make it easy to find long-form research reports, databases, and past newsletter editions. Click below for dedicated pages for each of those categories:

Read through the long-form E&O research reports here.
Search and sort the E&O databases here.
Skim more than 200 past issues of E&O newsletters here.

So ends Issue 163 of E&O Fridays. Help me E&O subscribers, you’re my only hope: If you learned something from today’s issue, would you forward this newsletter to someone you think might be interested?

Akili average sales price drops. Clinical trial updates