Akili, Inc. (PRTC) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for joining this transaction announcement conference call set up by Social Capital Suvretta Holdings Corp. Today, we are joined by Chamath Palihapitiya, CEO of Social Capital; Eddie Martucci, the Founder and Chief Executive Officer of Akili Interactive; and Santosh Shanbhag, Chief Financial Officer of Akili Interactive. Please note that this call has been pre-recorded and a Q&A session will not be conducted as part of today's presentation. Before we begin, we would like to remind you that as stated in the press release that was issued this morning, Social Capital Suvretta Holdings has filed a detailed investor presentation that provides an overview of the transaction. The presentation also includes disclaimers regarding forward-looking statements. Kicking off the call will be Chamath Palihapitiya. I now turn it over to you.

Hi, everybody. Thank you for joining an overview of the merger of DNAA and Akili, which is part of our Biotech 2.0 platform where we try to seek and find high growth, interesting companies in the biotechnology space that we think we can accelerate through our Bio 2.0 SPACs. Before we talk about the details, I think it's important to take a step back and think about the context in which Akili operates. Obviously, as we grow older, many of us feel that there are issues of cognitive impairment that we all deal with, whether it's in ourselves; sometimes, unfortunately, we also deal with it in our aging parents, and this has been well-documented and well understood. But the reality is that cognitive issues are not just associated with aging anymore, but frankly with many chronic and acute diseases. And what we describe when we feel these issues are things like trouble concentrating, memory issues, so forgetfulness, difficulty learning new things, and issues making decision that affect everyday life. And while these issues are clearly critical and should be addressed over time in adult population, it's even more important to identify and intervene in childhood. Because when they manifest in kids, these cognitive deficits really predict later life health issues if left unaddressed. And so for parents, but also for society at large, this really needs to be an issues that we take incredibly seriously. As a parent, particularly in the last few years, what I have also personally seen is that technology has made these issues of inattention in children much worse. And specifically by becoming so reliant on computers and Zoom meetings and video games in order to stay connected and stay in touch during the pandemic and all of these very difficult lockdowns, my children have exacerbated their, frankly, inability to concentrate. And I worry about that as a parent and I wonder what I should be doing. And so when I personally look for solutions, and I think when many people have looked for solutions, what we find are things that frankly just focus on symptoms or are best coping strategies. And so as global awareness of cognitive impairment, not just amongst adults, but within children, grow in awareness, I think many more people, including myself as a parent, are actively looking for solutions. And this is where Akili steps in. So what is Akili in a nutshell? What it is, is an FDA-cleared treatment to improve attention. By being a video game, it really is a first of its kind digital therapeutic. It's a prescription treatment for 8- to 12-year-old children of ADHD, whose efficacy has been validated in rigorous clinical studies. And beyond just 8 to 12 year olds with ADHD, Akili's ambition is to broadly expand the opportunity across ages and psychiatric conditions, not just in the U.S., but also around the world. And initial efficacy data across multiple indications, whether it's autism, multiple sclerosis, major depressive disorder, COVID fog, in randomized controlled trials and proof-of-concept trials show some early potential. They are in prelaunch phase right now, working with around 1,000 doctors, which is showing very promising fundamentals for both scale and sales potential. And it's run by this very unique interdisciplinary team of medical, clinical, and technology experts. At a clinical level, Akili has set the standard for validation in digital medicine. They've had 16 peer-reviewed publications in prestigious publications, including Nature and The Lancet. They have 20 clinical studies completed across 9 disease populations in more than 2,600 patients, again, looking at everything from ADHD to Alzheimer's, autism, depression, multiple sclerosis, and traumatic brain injury, just to name a few. And by doing such a holistic look at the value of digital therapeutics and the ability to improve cognitive function, Akili really has created this intersection of therapeutics and software. It has done some pioneering work with the FDA on defining endpoints and creating a product category and working to create a labeling approach that sets them up for long-term growth and scale. They have built the ground-up deployment model as well, which engages key health care stakeholders, and in many ways is a strategic platform of growth for the future, both in terms of internal organic growth with respect to the multiple products they want to build over time, but also potentially for inorganic growth through technology acquisitions or things that may otherwise exist in the market that may be a great tuck-in for them to drive further growth. And it is protectable in a way that provides the best features of a digital therapeutics business, but also a software business. They have a patent and copyright estate for unique cognitive algorithms and interaction mechanics that allow them to build on top of what they've invented early on. But they also have no generic dynamic. And this is a product as a result that can be continually optimized without a royalty cliff, without a patent cliff, with the potential for loyalty and user growth that can grow for long periods of time. And lastly, beyond ADHD, there is the potential for long-term growth as each patient uses their products and the product suite grows, which potentially creates an ability to create a household brand that is known for cognitive improvement across ages and conditions. And obviously, none of that would be possible, again to reiterate, without a very talented cross-functional team. And what I found, as I've met this organization, are people who are uniquely positioned to understand how to build exceptionally compelling games, but also to do it in a clinically rigorous way that can be measured, whose data can be validated both by peers, but also with the regulatory organizations that are required in order for Akili to be successful. And so with that, I'd like to introduce you to the leader of this very talented team, Eddie Martucci, to walk you through the product and the science in more detail.

Thanks, Chamath, and hi, everybody. I'm excited to tell you about Akili. This is a business we founded nearly a decade ago to disrupt the CNS medicine industry by, for the first time, making software that is itself the medicine. And I wanted to start by showing you a video, which is one of the very first families to experience our product, EndeavorRx, after FDA approval and on the market, to get a sense of what this new type of medicine really means to families and how it's changing the treatment paradigm. [Presentation]

Great. So hopefully, that gave a little bit of a sense of the new experience of our type of medicine. And so I'm excited to take you through the story here at Akili. Where we started as a business was the idea that CNS medicine needs a change. That is very clear. This is an area of medicine where we've accepted that treatment has to be scary, that they come with side effects, and frankly, that people don't get the treatment they need most of the time. And so we're trying to change all of that by, for the first time, focusing directly on brain function as the treatment target and using technology that's delivered through software and sensor stimulus to do it. The big need that we're going after here is cognitive functioning that Chamath mentioned. This ability to think, to focus, to remember things, these really basic human abilities, which have actually become one of the biggest unmet needs across CNS medicine. And the problem is way bigger than most people realize. What is now appreciated over the last decade or so is that a majority of some of the biggest populations that are treated in mental health, behavioral health, and psychiatry, a majority of those patients experience these very specific cognitive symptoms and they don't have good treatment for them. And so this was initially known in some more obvious conditions like ADHD and depression. But as we go to the next Slide, 18, you'll see that over the last 5 years or so, this has essentially become known to impact almost all areas of medicine that touch the brain. And so we're now talking about dozens of medical populations across tens of millions of patients where cognitive impairments, how people think, how they're able to focus or remember, are actually either the core or one of the biggest comorbidities of the disease. So it's a massive problem. It's finally recognized in medicine. But if you look at the current treatment approaches, there's a major gap. Because the way that we address this in society is totally inadequate and it makes sense that it's inadequate because we've never had products that were actually designed for this problem. We have certain products that are accepted in medicine like pharmaceuticals and behavioral therapy, but they don't directly target cognitive issues. And then there's just a lot of stuff that is on the consumer market that has never been proven to have a benefit. And so there's a gap in the treatment paradigm for this major need that's now affecting millions and millions of people. This need is coming to a head, and we're now at a crisis moment in society where it's finally time that we have to address it because the world we're living in is actually changing dramatically and putting a major burden on this very same cognitive function. And so we recognize in society now that the world we live in and the technology at our fingertips is actually compromising our cognitive function or putting an extra burden than we've ever seen before. And so there's a moment in time now where medicine finally recognizes these issues across disease and society finally recognizes that we really need to do something about it. The beauty of Akili is that our science is leveraging this very powerful technology that's at our fingertips, but melding it with brand new neuroscience that says we can finally do something about this for the better. We can directly interact with the brain and actually treat it through amazing software technology. And so if we dig into the science, we founded the company around a groundbreaking set of findings in the early 2010s, which was that through sensory stimulus alone, meaning delivering something through a computer, you could directly and specifically activate structures and networks in the brain that are responsible for specific cognitive functions like attention. This was a finding that was out of UCSF. We took the worldwide license too. And it was initially shown in older adults, the ability to activate this very specific network in the midline prefrontal cortex of the brain. We developed that into a mobile-based product, a product that operates a lot more like a consumer entertainment product, and we're able to show that we could replicate this effect in children. And so you can take children who deal with in attention and sensory processing dysfunction, who don't process information very well, and you can see this through EEG brain activation patterns. And after a month of using this technology, which to them feels like a game, you could robustly show brain activation patterns that now are mostly indistinguishable from typically developing children. And so it's a powerful technology. It's technology that is directly going to the source of neurological function and having a large effect. And we've now replicated this effect across dozens of clinical trials. We have about 6 different trials now that have published, that have shown we can replicate this brain activation pattern through this technology, and have shown that we link it and correlate it to cognitive and clinical outcomes. And so if we go to Slide 24, we've built the company to harness this exact technology and the many, many technologies that will come along like it to build a new type of medicine. This type of technology that can be delivered through sensory and motor stimulus, but that can actually be personalized for individuals and therefore, bring the best of what we've hoped for, for medicine, but at the same time be coded into rich amazing engaging environments like video games, so that it could be the very best of consumer technology at the same time. And this is the business we've built to harness these technologies. Our technology approach, if you look at Slide 25, with our technology engines, is that we license and develop and build what we believe are the best technologies in the world to specifically activate cognitive regions in the brain. These are networks in the brain that control specific cognitive functions. We've done this with this very first technology I mentioned from UCSF, building out an engine we call SSME, and we've now replicated this with R&D technologies targeting other brain regions and other cognitive networks. The beauty of this approach is twofold. Because we target the neural activation independent of disease, every one of these engines is able to actually build products and power products that can treat a range of disease. They're not specific to one disease. And we'll see in the pipeline how we've been able to leverage this approach to have an extremely efficient therapeutic development paradigm. The second big benefit is that in a world where the vast majority of digital health products are commoditized, we can actually specifically protect the core technology in our engines, not dissimilar from how we think about protecting other therapeutic classes. And so we actually have a rich patent estate with over 50 patents granted and another big bulk of patents that are pending, specifically protecting these engines at their core and how to integrate them into products. And so the protectability is a big deal here. If we zoom in and look at how this first engine SSME is working, this is a treatment approach that is using sensory stimulus to target the weak link in attentional processing, basically the midline prefrontal cortex of the brain, how it deals with multiple conflicting streams of information at the same time. And we've shown the ability to have people use a very classical game environment and activate this part of the brain and show benefits on things like focus, interference processing and multitasking. So that's the science behind how we target the brain. But we want these products to feel like actual entertainment, not like educational software or like clunky brain stimulation. And so every aspect of our treatment experience is delivered like a consumer-grade fast-paced action video game. The difference is every single second of the experience, there's an algorithm underneath it that is delivering our proprietary technology. But to the user, they feel like they're playing a game. And so they get rewards, they evolve the experience, they have variety that allows them to play for long periods of time. The other beauty of this approach is that we've developed a core capability where we can take these engines and put them into various types of front-end delivery systems, meaning different game interfaces. And so this very same technology is already being prototyped across a range of different game formats. And in the future, we'll be able to do this across potentially dozens of types of games for different populations or for whatever suits individual user subgroups. So I want to dive into the first product that's come out of our company and product platform. And this is called EndeavorRx. It's a product we're very proud of. It's a treatment for targeting attention function in children with ADHD. This is a first-of-its-kind treatment and that is the first and only prescription treatment delivered through a video game in the world. It is also the first digital treatment that is directly targeting and labeled to improve a cognitive function. So on this journey that we're on to have doctors have tools to now be able to treat patients for their cognitive issues, we have a treatment labeled directly for that. And if we look at the clinical data, the reason it was approved is because it actually works and we studied it like a drug. So we ran a rigorous clinical development program that encompassed 5 clinical trials over 600 children with ADHD. We actually modeled this off of the Vyvanse drug approval program. And two of these trials were randomized controlled trials, and we showed that across cognitive and symptom and impairment endpoints, we were able to show benefits to children with ADHD and strong meaningful benefits. And so just to give a small synopsis of these data in one slide, if you look in the left panel, our primary outcome measure in a number of our studies, including our pivotal trial, was, you're looking on the Y-axis of an FDA-approved test that measures attention capacity. It's called the TOVA test. And you see that children who were on EndeavorRx, which is AKL-T01 in the study, in blue, had strong statistically significant large effects on improving these measures of attention compared to a control, which in this case was an educational video game designed to have very similar reward pacing. And so those types of games, of course, improve your ability, for instance, to spell words, but they are not having any real or significant effects on cognitive functioning. If you look in the middle panel, to put this magnitude of effect in context, what we've seen is that across our clinical trials, which are all in blue there, we can take various aspects of children's attention and move them to an ability that is meaningful. If you compare it to the right gray bar, that is a literature comparison of an acute dose of methylphenidate or Ritalin on these same measurements. And so you can see the effects we are having are generally in that range when you compare across studies. And so this is a meaningful effect we've seen in our data that a vast majority of children report that at a single month of treatment, they're noticing daily improvements in attention. And finally, in the right panel, when you start to look at symptoms or daily functional impairments, this is where you really see this new type of product class differentiate from what's been done in CNS medicine before. We ran a trial that was run to have data that addressed the major questions from providers, from prescribers, on how these products work. So question number one is, can this work along with medication? And the answer is yes. So if you look at the blue line, that is children who are actually on drug medication. If you look at the orange line, those are children who are not using medication. Both of those groups in this trial, at baseline, they get EndeavorRx, and what you notice is both of those groups have the exact same magnitude of improvement, symptom reduction, so it goes down. And so what we're able to show here is that the same effect can be attained whether someone is on medication or off. And so that's in our label. And it gives a lot of flexibility for doctors to be able to use this product as part of a treatment program that can include medication or not. The second big question that prescribers have was, what happens when people stop using the product? This is obviously an interactive treatment, and so we don't expect people to use this all day every day for the rest of their life. And the beauty of this approach that directly targets and changes neuroprocessing is that you can see in the middle of the graph, at day 28, when there's a treatment pause for a month, on average, the effect is actually maintained. So there's durability to at least a month here, which is very different than most other CNS medicines. And finally, when you challenge with a second treatment paradigm at month 3, you see that the effect actually improves. And that's the third big question that providers have had is, how is this effect maintained when you add more treatment? And we see that it actually grows. And so this is a very different profile from what we're used to in CNS. We expect to see this not only in ADHD, but we've already had indications that you can see this across other diseases. All of these data are in our FDA label. And so these are all things that doctors are aware of. All of these efficacy benefits and outcomes here come with an extremely positive safety profile. We've never had a single severe adverse event across our trials, and we have single-digit percentage adverse events of things like headaches and frustration. So the safety profile of this treatment is also dramatically different than what we're used to in CNS. And so if you zoom back out to what we're really trying to deliver here, we have a product for the first time that is targeting cognitive function at its source. But because of how it's coded and delivered, we're allowing people to experience medicine in a brand-new way. And we're really excited about what this means for patient empowerment in medicine. And so when we look back at that treatment gap, we believe that this new type of product, which we're calling physiologically active digital therapeutics fits in alongside pharmaceuticals and alongside behavioral therapy to provide something new that a doctor can offer their families. And this is already starting to help in ADHD, of course, where we have a product, but across our pipeline, dozens of populations, we believe, will benefit from this type of approach, and we're really charging the way and setting the standard here. One thing that is worth mentioning across the business is that this approach we've taken to build our first product that's come out as a prescription product, we have goals and have developed this business to churn out many products like it, whether developed internally or acquired, through what we have developed. It's a set of capabilities, infrastructure, know-how and IP that allows us to take products from early idea and prototype, all the way through design, validation, regulatory clearance and of course, commercial growth. And so this is something that we do is a differentiating factor and is a core capability of Akili, which will make us the developer and acquirer of choice in the future as this industry grows. So I now want to zoom out from pediatric ADHD. I've been talking a lot about our first product, EndeavorRx, but zooming into the pipeline now. Because as I mentioned, we are not an ADHD company. We're not a pediatric company. We are a company targeting brain function across disease. And so we already have an advanced pipeline with products across a number of different disease areas. We have activated our pipeline initially in ADHD, where we do have that one approved product. And we have activated trials either through our SSME technology or through an in-license of a company called TALi that allows us to be active in clinical trials across all ages of ADHD. Secondly, we have already had early clinical data in multiple areas that go beyond ADHD, into mental health and neurological functioning in areas like autism, adults with multiple sclerosis and adults with depression. So this is an advanced pipeline where we think we have extremely high probability of success compared to a typical therapeutic pipeline for a few reasons. The first, we've already demonstrated proof-of-concept efficacy in 4 different disease populations: ADHD, autism, multiple sclerosis and major depression. All of those have randomized clinical trials that have shown benefits. And so we know the product, the technology at its core works across disease. And the second is that unlike most therapeutic pipelines that get into late-stage trials, we have a very low risk of safety events that would kill the pipeline. And therefore, we are planning on a high rate of success as we move through our ADHD products, but also as we rapidly progress our products to pivotal trials in some of these other areas. And if you look at how we've built the cadence of this pipeline, we think we're well set up here being a public company. We have a number and a steady stream of important clinical and regulatory milestones that will hit over the next 2 to 2.5 years across this entire pipeline. And so we think that's really important in terms of where we are as a business today and we think it's important for both the business, patients and shareholders as we go forward. And so last year, before we move into our go-to-market, I just wanted to give a quick sampling of some of the other proof-of-concept efficacy data we have that I just alluded to. If you look at autism spectrum disorders, we have run a pilot program, including an RCT with Children's Hospital, Philadelphia and Penn, where we showed the ability of our same technology adapted to be able to be used by children with autism and showed, in a randomized controlled trial, its ability to improve attention as well as ADHD symptoms in this population. We think that's really exciting because this is a population that actually can't use typical medication, by and large, because of the side effect profile. And therefore, we think we could be a really interesting early add to the treatment paradigm here. And so we're progressing this program to pivotal trials, estimating meeting with the FDA on this program by end of this year. The first adult population that we took our technology platform into was major depressive disorder. This is a disease population where now up to 90% of people are known to suffer from cognitive dysfunction and cognitive impairments. And so they're looking for ways to solve that. And we've shown in a clinical development program with a few different trials, including in RCT, with one data point shown here, the ability to improve sustained attention as well as other executive function measurements and that, that beats a control product, which is a word-based educational video game. We're excited about this. This is soon to publish in the American Journal of Psychiatry, which is on brand with our high science brand. And we're excited to take this product into pivotal trials, estimating in later 2023 that we'll be meeting with the FDA to progress that into pivotals. One of the areas we're particularly excited about is an area that, for a long time, cognitive impairments have been known to plague this population, and this is multiple sclerosis. This is one of the areas of medicine, which actually has its own established clinically meaningful endpoint for the disease, which is called the SDMT, that is known and accepted to be a good measure of cognitive processing in multiple sclerosis. And what we've showed in a randomized controlled trial run by UCSF is that MS patients who get EndeavorRx for 6 weeks and who are then off EndeavorRx for 8 full weeks, so 2 months after a 6-week treatment regimen, actually hits the well-known and established clinically meaningful change threshold for cognitive impairment in MS. In fact, that 8-week posttreatment mark, about 70% of patients are clinical responders, which essentially doubles what we saw in the control group. So we're really excited about these results. It's powerful for multiple sclerosis patients, but it's also our initial foothold and proofpoint in a broad range of autoimmune disorders that all struggle with different forms of cognitive impairment. And this is another population where we're looking to take our products into pivotal trials, likely meeting with the FDA in the first part of '23. We have similar results in areas like acute cognitive dysfunction, things like traumatic brain injury. We have shown the ability to be able to show cognitive improvements in these areas. We're very excited about a range of different populations that we're now in studies for, things like post-hospitalization, things like cancer-related cognitive impairments, and what we're most excited about today, which is two parallel randomized controlled trials, one with Cornell and one with Vanderbilt, targeting COVID fog, which is cognitive impairments associated with COVID infection. And so we've really tried to activate our technology and pipeline across well-known conditions, but also very relevant conditions. If you look at our Slide 41, the last little bit here about why targeting cognition is so interesting is that we can evolve our medicine even beyond traditional treatments, to evolve the entire treatment paradigm by providing a new way to actually measure cognition. So we've shown the ability of our same technology to be able to correlate strongly with cognitive impairments in areas like early Alzheimer's disease as well as in a few different populations like MS and sensory processing issues. And so we're very excited about not only trailblazing new treatments for brain function across these disorders I've mentioned, but potentially having products that can actually change how we assess and monitor cognition at scale, which is not well done today. All of what I just showed you is using our first engine called SSME. We envision that with new technologies in R&D, which we have and have developed, as well as new technologies, which we can license, we can do exactly this, build a robust pipeline and 3x, 5x or 10x the types of products and populations we can treat by running them through the company and the processes that we've built here. And so we do intend to be a first-in-class new CNS medicine company, and we're very excited about the progress we've had to date. So let me briefly move into our very first market population of ADHD, and then I'm going to turn it over to Santosh to talk through the go-to-market. We entered ADHD because it's an extremely high need population where people are actively searching for alternatives to their current treatment. But we also entered it because we have visions of becoming a household name in this new type of medicine that we're pioneering. And ADHD is a population that is very prevalent. Many people suffer from it. We know we can help, and it also is something that everyone can relate to. And so that's really important to us as we bring our new medicine to the world at scale. Our model here, our commercialization model and business model is this is a therapeutic driven business model at first, which means we are monetizing the prescription like any other therapeutic. So the prescribed product is being monetized. Today, in our prelaunch phase, this is a 3-month prescription that is written by a doctor, paid for by a mix of the patients themselves or insurance. We envision this like all therapeutic business models that over the next few years to transition to a larger percentage of insurance coverage. We do believe that insurance should cover any therapeutic that is driving positive patient outcomes and we're already seeing that tailwinds in the market. And the beauty of what we do is that both the product itself as well as the business model can adapt and change. And because there has been no infrastructure previously to be able to deploy a digital therapeutic like ours, we've actually built it. And so much of what we've been doing over the past year has been testing and piloting and building the distribution infrastructure, everything from writing a prescription, how does the doc write a prescription? How does that prescription get to Akili? How does a patient receive and activate their product and use it at scale? And so today, we're really proud of the fact that a growing number of doctors are now able to select EndeavorRx right from their e-prescribing platform, because we are listed in most of the major drug compendia and we have a drug-like code. They're able to select that and prescribe it, in many cases from their e-prescribing or through traditional prescription written, or faxed, or called. Many patients in the same day, because we've now partnered with a front-end virtual pharmacy company called Phil Pharmacy, patients are getting SMS and e-mails same day telling them that their prescription has been routed. They can give their information. They can give us consent to run this through insurance. And when that whole billing process is complete, we simply send them a secure encrypted activation code. And so they have the treatment on their phone and they can then activate it with our prescription code. And so this is everything we pioneered because there's never been a distribution process for a treatment video game before. But we now have that working. We've adapted it. We've piloted it over time. And what we're most excited about is that in this prelaunch phase, where we've had just a very few sales reps working with doctors to help educate and answer questions, we're seeing extremely strong business model fundamentals that tell us this model is ready to scale. And so in this prelaunch phase, we already are up to about 1,000 doctors who have prescribed EndeavorRx just in the last few quarters of this prelaunch. About 1/3 of those docs have already become multi writers, meaning they're writing prescriptions for multiple patients. And doctors are understanding in these early days that this is a chronic treatment and so a majority of docs are already writing automatic refills. So this is really important because docs are going to be supportive of this product at scale and we're already seeing that. What we're most excited about are the conversion metrics, which show the demand on the patient side. And so a majority of our prescriptions are not covered by insurance today because this is a new product class. And so it's a discounted cash price today of $295 on day 1 for a 3-month prescription. We are seeing that about half of patients convert immediately at that price point. And so it's a really healthy conversion that we've seen historically, because we think it shows that even before there's broad insurance coverage, we know the demand is there. But of course, our model is to remove as much of the patient cost as possible. And we do have approaching 10% of our prescriptions historically that have actually been covered in some way by insurance. And in those patients, we see nearly 90% conversion with a higher net price to the company. And so we think altogether, these business model fundamentals in this prelaunch phase show the demand is there, the likelihood to prescribe is there. And really, what we see is that this is now about awareness. This will not be a conversion issue. And so what we're looking to build as we go forward as a company is really that broad awareness and that launch, both on the consumer side and the provider or doctor side. So I'm going to turn it over to Santosh here to start to walk through how we're thinking about the go-to-market for EndeavorRx, what our plans are, as well as how we've sized up the company and this fund raise to allow us to bring this new type of medicine to the world.

Thank you, Eddie. I appreciate that. Let me talk to you a little bit about the go-to-market and then dig a little bit more into the revenues and how we're going to invest the capital. We expect to have our commercial launch of EndeavorRx in 2022, and we'll build on the strong fundamentals that Eddie just talked about. We believe we have all the necessary elements to establish deeper successful commercial model in digital therapeutics. Our go-to-market approach revolves around three key stakeholders. The first is consumers. Here, our targets are moms and dads of kids who have ADHD. They are constantly looking for non-drug options to help their kids. And as we all know, parents are willing to do a lot more for the kids than for themselves. At launch, our focus will be kids who are not well controlled on meds or who are naive to stimulants. This represents about 44% of the population. Our approach here will be to bring the best of both the consumer tech and biopharma to do two things: One is to increase awareness, and the second is to increase activation of caregivers. The second is prescribing physicians. Our approach here will be to use the tried and tested therapeutic sales model that will include expanding our sales force to about 100 strong, and also include telemedicine integrated into the model. We are already seeing the traction of the telemedicine model as we speak. Again, the focus here will be to increase awareness and activation of our targets. And here our targets are [indiscernible], psychs, and large centers focused on ADHD kids, where we are already starting to see prescription across multiple doctors. And last but not the least, is payers. Our first market has this unique self-pay characteristic where the consumer, moms and dads, have a high willingness to pay cash out of pocket to help their kids. On average, they spend about $150 per month on approaches beyond drugs, things like psychotherapy, diet supplements, after-school programs, online programs, et cetera. Additionally, we are also building a market access team to enable commercial and Medicaid coverage over time. We already have about 10% of our prescriptions paid for by insurance companies, as Eddie just mentioned, mostly PBMs and paid as a drug benefit. And we are currently in second or third round conversations with some of the top payers in the country. What we're hearing from many of these conversations is that they consider ADHD to be an essential benefit. Number two is that our price points, $450 WAAC is very reasonable, consistent with what they're actually paying for branded generics today. And most importantly, our safety profile is a significant advantage. Our safety is basically restricted to headaches. We will obviously build on this positive momentum. And in summary, in this space, we will have an approach that there will be a blend of the unique self-pay characteristic of the market and track towards broad-scale coverage by both commercial and Medicaid over time. Zooming back out into the overall ADHD market. It is a massive market, $10 billion with over 70 million prescriptions written every year for drugs in the U.S. Globally, this is about a $25 billion market. The safety profile of the drugs and lack of options to address attention in this market creates a very high unmet need for products like ours. Our target population is expected to be 8.1 million people here in the United States. This is lower than the entire 11 million ADHD population to adjustments: first, we have excluded patients that are hyperactive only. They are not on our label. They represent about 10% to 15% of the total population. And second, to be conservative, we have taken a further reduction in the TAM to account for any patient severity related challenges. We will start in this space with the FDA-cleared product, EndeavorRx, in the 8- to 12-year-old market for inattention. We are already executing a clinical and regulatory plan to address the entire ADHD population. We have pivotal trials ongoing in 13 to 17 year olds and adults with potential launches in 2024. From a regulatory perspective, these are all expected to be via the FDA 510(k) process. This is simpler and faster compared to the de novo process we had to use for our first age group. We believe that the entire age expansion plan is significantly derisked because of this regulatory path that we will take. Let's get into the ADHD revenue opportunity in the U.S. We anticipate the opportunity size to be a minimum of $500 million per year in the United States across the ADHD population. As a reminder, this is in the $10 billion drug market with 70 million prescriptions written every year, and even some nonstimulant drugs, with all of the safety issues, they were close to $500 million to $600 million per year in the U.S. before they went generic. Let me walk you through the model assumptions supporting the $500 million. There are four key assumptions: first, we are estimating an 8% market share, lower than the non-stimulants at 10% and behavioral therapy at close to 50%. In this model, every 1% represents about $65 million in revenues. Second, from a payer mix, we are assuming a low 50-50 split of cash versus insurance in this model at the 5- to 7-year mark. Third, average net price is expected to be between $300 and $350 per prescription, basically reflecting today's pricing and gross to net of about 15%. And lastly, we are assuming, on average, 1.5 refills per patient after their first prescription. As you can see, there are clear upsides to the $500 million that is inherent to our model, including increased payer coverage versus the 50-50 split and reduced gross to net discounting versus what we are seeing today. Keep in mind that we do not have the patent cost that drugs typically have, and our platform can actually grow with the customer throughout their lifetime. We are, hence, likely to have a long revenue tail typically you see in best-in-class consumer products. Now we also have a couple of additional revenue opportunities beyond the traditional medicine model. Maintenance mode alongside the core treatment. We have the ability to have premium content and services, can provide an additional revenue stream and also keep the customers within the Akili ecosystem. For example, we just launched EndeavorRx Insight, that is the companion app for parents. It is free today. Number two, we can have reimbursable services for physicians with the incredible data, probably the richest data in mental health that is embedded in our technology. Now these are currently not accounted for in our revenue projections. And more importantly, all of these levers actually apply to the entire pipeline of our future products. Now that was just treating attention control in ADHD and also only in the United States. As mentioned before, our platform has the capability to address multiple potential markets. We have prioritized three key programs to enter pivotal trials in the next couple of years in addition to expanding our presence in ADHD ex-U.S. Each of these markets are massive in size as you can see on the top blue. Taking the conservative approach to the TAM, on the lower portion of this chart, what you are seeing is the patient population that is actively seeking treatment like us at launch. So these are already activated patients and represent about 15.5 million people or nearly 8x to 9x our first label. With increase in awareness in general around mental health and our own efforts in ADHD, we believe we will be able to expand beyond the 15.5 million people into the 115 million people you see in the top right corner. And we could be in many of these markets in the next 2 to 4 years, and it clearly translates into a multibillion dollar annual revenue potential for a QE. And as a reminder, this is just the initial pipeline and just the first platform SSME. To wrap it up, we are seeking to raise up to $390 million net of fees from this transaction. From a prioritization perspective, we will allocate up to $195 million towards the launch and scaling of EndeavorRx in ADHD for kids 8 to 12 years of age. Approximately $150 million will be allocated to progressing the pipeline that includes the ADHD label expansion studies, the three pivotal trials at MS, MDD, and autism spectrum disorder, and proof-of-concept trials in acute cognitive dysfunction and monitor. Lastly, we are also allocating up to $45 million, supporting acquisition of either new platform technologies or potentially companies to continue to build on our leadership position and the first-mover advantage in this space. With that, I will pass it on to Chamath to give you an overview of the transaction details.

Thanks, Santosh. So let's take a step back and just give an investment summary of this transaction. So what is Akili? Again, to remind, this is the leading digital medicine company. We think it's a premier platform that's designed to treat cognitive dysfunction in medicine. It's a leading platform that uses software to treat brain function at scale. It's a product that has been designed to directly target the neurophysiology of the brain and deliver it through a high-quality entertainment experience. It's a first of its kind prescription digital therapeutic with both FDA clearance and a CE Mark in Europe in pediatric ADHD for 8 to 12 year olds, and we are currently in prelaunch phase, working with more than 1,000 doctors. Akili has an active pipeline that's aimed to expand the current technology into multiple disease conditions with chronic and acute cognitive impairments in both pediatrics and adult population. And they have an established model and infrastructure that can be applied to new products and markets to generate sustainable growth. And then numerically, to talk about the transaction structure in detail, the pre-money value of Akili is $600 million, net of the cash existing on the balance sheet, that sets the pre-money enterprise value at $516 million. There's $250 million cash and trust and a pipe of $162 million. So the total cash sources is $412 million. Social Capital Suvretta will be combining with Akili Interactive. We are committing more than $130 million in this transaction. Assuming no redemptions, the transaction is expected to deliver more than $380 million of net proceeds that will help fund EndeavorRx's commercialization, pipeline progression and new platform technology development. And then lastly, there's 100% seller rollover equity. There is an incremental seller earn-out of 7.5% of the fully diluted shares outstanding immediately after closing, which bests evenly at share price hurdles of $15, $20 and $30. Overall, at this pre-money enterprise value, we think that there is a significant margin of safety and a great opportunity for us as the incoming investors to help Akili build a great business and generate some really meaningful returns over time. And with that, I'd like to thank you for listening to the details around this merger between DNAA and Akili. And I'd like to pass it back to Eddie Martucci for some closing remarks.

Thanks, Chamath. This is Eddie, again. Thanks, everyone, for your attention and your interest in Akili. We're really excited. We believe we've built the foundations of what could be a disruptive and generational new CNS medicine company, and we're excited to make that a reality. So I hope to see you in the future, and we're excited for the ride we're on.

This concludes today's call. You may now disconnect.