Akili, Inc. (AKLI)·Q2 2023 Earnings Summary

Executive Summary

• Q2 2023 delivered modest revenue growth with total revenues of $0.114M, while GAAP net loss narrowed materially to $11.8M as operating expenses declined; non-GAAP OpEx fell to $13.1M on reduced G&A and clinical wind-down .
• EndeavorRx KPIs showed continued adoption: prescriptions +27% q/q and +291% y/y; unique prescribers reached 1,102 (+20% q/q, +130% y/y), with both new and repeat prescribers expanding .
• Akili reiterated FY 2023 non-GAAP OpEx guidance of $55–$60M and cash runway into Q1 2025, maintaining discipline while scaling OTC and label expansion efforts .
• Earnings call highlighted early EndeavorOTC traction and active pricing/package testing, lack of new payer wins, and no explicit FDA timeline for adolescent label expansion; third-party consensus noted an EPS beat and revenue miss for Q2 2023, though S&P Global estimates were unavailable for AKLI mapping .
• Near-term stock catalysts: FDA submission for EndeavorOTC as an over-the-counter adult ADHD treatment, adolescent label expansion outcome, and payer coverage progress .

What Went Well and What Went Wrong

What Went Well

• Strong adoption metrics in pediatrics: EndeavorRx prescriptions rose 27% q/q and 291% y/y, with 1,102 unique prescribers (+20% q/q, +130% y/y), indicating deeper mainstream uptake .
• Cost discipline: GAAP total operating expenses declined to $15.3M from $19.1M in Q1, and non-GAAP OpEx fell to $13.1M from $14.0M, driven by lower G&A and clinical wind-down .
• Strategic progress in adult market: June 7 release of EndeavorOTC without prescription, backed by adult pivotal data; management: “Early data shows consumer interest… we are pursuing FDA authorization as an over-the-counter treatment” (CEO Eddie Martucci) .

What Went Wrong

• Revenue still de minimis: Q2 revenues were $0.114M, essentially flat vs Q1 ($0.113M), reflecting early-stage commercialization and limited payer coverage .
• Payer coverage inertia: On the call, management reported “no new news” with payers and attributed delays to systemic inertia rather than data gaps, prolonging reimbursement ramp .
• Gross loss persisted: Cost of revenues exceeded revenues (CoR $0.150M vs revenue $0.114M), resulting in a gross loss of $0.036M, limiting operating leverage in the near term .

Financial Results

Notes:

• EPS (actual) was referenced by third-party sources as -$0.16 in Q2 2023; S&P Global consensus estimates were unavailable for AKLI mapping. External consensus suggested an EPS beat and revenue miss for Q2 2023 .

KPIs (Q2 2023):

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We’re seeing continued adoption of EndeavorRx in our initial pediatric market, and we are excited to have entered the sizable adult market with the introduction of EndeavorOTC… we are pursuing FDA authorization as an over-the-counter treatment in the adult market” — CEO Eddie Martucci .
• “GAAP total operating expenses were $15.3 million … Non-GAAP total operating expenses were $13.1 million … driven by reduced general and administrative expenses, and the wind-down of clinical trials” — Company release .
• On payer coverage: “no new news… this is not about additional data… this is about inertia in the system” — CEO Eddie Martucci; and balancing spend without changing OpEx guidance — CFO Santosh Shanbhag .

Q&A Highlights

• Revenue guidance: Management is not providing revenue guidance and reiterated non-GAAP OpEx of $55–$60M for 2023; OTC will contribute revenue but spend will be balanced across marketing and Rx support .
• Payer coverage: No new payers; management emphasized systemic inertia, continuing to engage aggressively to expand access .
• Adolescent label expansion timing: No explicit FDA timeline; actively under review without a set PDUFA/MDUFA date .
• OTC pricing and packaging: Early phase testing shows a mix of monthly and annual options; ongoing optimization expected .

Estimates Context

• S&P Global consensus estimates for AKLI were unavailable due to missing CIQ mapping; therefore, direct S&P comparisons cannot be made.
• Third-party sources indicate EPS of -$0.16 beat by ~$0.04, and revenue of $0.114M missed by ~$0.124M, signaling mixed headline performance in Q2 2023 .
• Given limited revenue visibility and ongoing payer inertia, street models may need to reflect slower reimbursement ramps offset by OTC experimentation and disciplined OpEx.

Key Takeaways for Investors

• Adoption momentum in pediatrics is intact with broadening prescriber base, but revenue remains small without payer scale; watch for coverage milestones as the main commercialization unlock .
• Cost discipline is credible; non-GAAP OpEx down sequentially and FY guidance reiterated, providing runway into Q1 2025 even as OTC and regulatory initiatives ramp .
• Adult ADHD OTC launch is an upside option: early demand and ongoing pricing/package testing could drive incremental revenue ahead of potential FDA OTC authorization .
• Regulatory catalysts: adolescent label expansion under FDA review and EndeavorOTC submission planned in H2 2023; outcomes could meaningfully expand TAM and improve adoption curves .
• Near-term trading: headline beats/misses were mixed, but the narrative is driven more by regulatory and coverage progress than quarterly revenue prints; monitor FDA communications and payer engagement updates .
• Medium-term thesis: if payer coverage accelerates and OTC gains traction, operating leverage could improve materially; until then, expect measured revenue growth anchored by disciplined OpEx and product optimization .
• Risk factors: prolonged payer inertia, regulatory timing uncertainty, and persistence of gross losses at low revenue scale; watch liquidity and capital needs if timelines extend beyond expectations .

Additional Q2 2023 Press Releases and Prior Quarter Context

• EndeavorOTC adult ADHD product release (June 7, 2023) announced nationwide OTC availability and intent to submit to FDA for OTC authorization .
• Adult pivotal (STARS-ADHD-Adult) topline results published May 3, 2023 showed significant improvements in attention and quality of life, underpinning adult market strategy .
• Q1 2023 press release: strong prescription growth (+32% q/q), cash of $117.4M, and reiterated runway into Q1 2025 .
• Q4 2022 press release: established 2023 OpEx guidance ($55–$60M) and laid groundwork for label expansion and sales coverage .