Akili take-private marks end of era for SPAC digital therapeutics

ADHD-treatment video game maker Akili Interactive is going private in a merger with Virtual Therapeutics.

Why it matters: The take-private spells the end of an era for digital therapeutics companies that SPAC-ed their way to the public markets.

Zoom in: The merger is expected to net Akili shareholders $34 million.

• The combined organization will operate as Virtual Therapeutics, a private Kirkland, Washington, company focused on mental health and wellness.

Context: The move comes a month after Akili said it was seeking strategic alternatives and a week after Click acquired acquired the assets of delisted Better Therapeutics.

The big picture: Digital therapeutics companies have sustained widespread market failure — particularly those that went public via SPACs.

• Pear Therapeutics, once considered the most mature of such businesses, was sold for parts at auction a year ago.
• Lack of reimbursement for such tools — which many of their makers hoped to see treated as traditional therapeutics or drugs — remains the biggest obstacle to the industry.
• Insurers have been reluctant to embrace digital therapeutics amid a lack of long-term effectiveness data and concerns about the technologies' ability to cut costs.

What they're saying: "In health care, if it doesn't get paid, it doesn't get done," Carrie Nixon, managing partner at Nixon Gwilt Law, previously told Axios. "We're unlikely to see a major success in the field until there is a reliable reimbursement pathway in place."

Our thought bubble: It's almost as if SPACs were a bad idea.