Palihapitiya-Led SPAC to Merge With Akili in $1 Billion Deal
Palihapitiya-Led SPAC to Merge With Akili in $1 Billion Deal
(Bloomberg) -- Akili Interactive, a startup that has developed a video game to help treat attention-deficit disorders in kids, has agreed to go public through a merger with one of Chamath Palihapitiya’s blank-check companies.
The deal, which confirms a Bloomberg News report, values the combined entity at about $1 billion, Akili and Social Capital Suvretta Holdings Corp. I said in a statement seen by Bloomberg. It will provide as much as $412 million in gross cash proceeds, the companies said.
The transaction includes a private investment in public equity, or PIPE, funding of $162 million at $10 a share, of which $100 million is from Social Capital. The rest is from investors including Suvretta Capital Management’s Averill strategy, Apeiron Investment Group, Temasek Holdings, PureTech Health, Polaris Partners, Evidity Health Capital, JAZZ Venture Partners and Omidyar Technology Ventures, according to the statement.
Led by Chief Executive Officer Eddie Martucci, Akili has developed the video game that can be prescribed to improve the attention of children with attention-deficit hyperactivity disorder, also known as ADHD. The FDA-cleared treatment known as EndeavorRx is set to launch later this year, the company said.
“Our type of medicine is pretty unique in that it’s developed as a rigorous medicine, taken through the FDA, prescribed by doctors, but it’s delivered as an entertainment product,” Martucci said in an interview. “It’s about a patient no longer feeling like a patient but actually enjoying what they’re doing and having fun.”
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The underlying technology forces the brain to deal with multiple competing stimuli at the same time to activate the part of the brain that controls cognitive functions. It can be applied to treat the cognitive impairment that can come with autism, depression and multiple sclerosis, and Akili is running clinical trials to get approval to use its video games for those conditions as well, Martucci said.
Akili plans to use the proceeds to bring EndeavorRX to market and develop more products.
The merger is expected to close in mid-2022, subject to approvals, after which Akili will be listed on the Nasdaq stock market under the symbol AKLI, according to the statement. Palihapitiya is set to join Akili’s board of directors as chair. The startup was last valued at $410 million after a May funding round, according to data provider PitchBook. PureTech Health Plc said at the time that it owned about 23.4% of Akili.
Social Capital Suvretta Holdings Corp. I, a special purpose acquisition corporation that counts Palihapitiya as its CEO and Kishen Mehta as president, raised $250 million in a June initial public offering.
Morgan Stanley and Cowen Inc. are financial advisers to Akili. Credit Suisse Group AG and Cowen are capital market advisers to Akili, while Bank of America Corp. helped Social Capital Suvretta Holdings Corp. I.
“Our vision is to become a new and lasting treatment company for the brain,” Martucci said. “We’re going to do this for cognition and then we want to go well beyond.”
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