REG - PureTech Health PLC - PRTC's Akili Enters Into Merger Agreement

Puretech HealthAnnouncement

29/05/2024 13:15

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RNS Number : 3087Q  PureTech Health PLC  29 May 2024

PureTech Health plc

 

PureTech Founded Entity Akili Interactive and Virtual Therapeutics Announce
Entering Into Definitive Merger Agreement to Establish Leading Digital Health
Company

 

Akili to operate as wholly owned subsidiary of Virtual Therapeutics

 

PureTech Health plc (https://puretechhealth.com/)  (Nasdaq: PRTC, LSE: PRTC)
("PureTech" or the "Company"), a clinical-stage biotherapeutics company, noted
today that its Founded Entity, Akili, Inc. (Nasdaq: AKLI), a leading digital
therapeutics company, and Virtual Therapeutics, a company focused on improving
mental health at scale using engaging, immersive games, announced the signing
of a definitive merger agreement to form a diversified, leading digital health
company.

 

As of May 7, 2024, PureTech owned 12,527,477 of the outstanding shares of
Akili common stock.

 

The full text of the announcement from Akili and Virtual Therapeutics is as
follows:

 

Virtual Therapeutics, Akili Interactive Enter Into Definitive Merger Agreement
to Establish Leading Digital Health Company

 

Akili to operate as wholly owned subsidiary of Virtual Therapeutics

 

Kirkland, Wash., and Boston, Mass.- Virtual Therapeutics, a company focused on
improving mental health at scale using engaging, immersive games, and Akili,
Inc. (Nasdaq: AKLI), a leading digital therapeutics company, today announced
the signing of a definitive merger agreement to form a diversified, leading
digital health company.

 

Under the terms of the agreement, Akili shareholders will receive $0.4340 per
share of common stock in cash. The per share purchase price represents an
approximately 4% premium to Akili's closing stock price on May 28, 2024 and an
approximately 85% premium to Akili's closing price on April 29, 2024, the last
trading day prior to Akili's public announcement that it was evaluating
potential strategic alternatives. Following completion of the transaction, the
combined organization will operate as Virtual Therapeutics, a privately held
company, with Akili operating as a wholly owned subsidiary.

 

"In today's global mental health crisis, patients deserve access to clinically
validated solutions that address their specific needs. We have been able to
advance multiple solutions on our platform since founding Virtual
Therapeutics, and we look forward to taking a significant step forward through
this merger," said Dan Elenbaas, co-founder and CEO of Virtual Therapeutics.
"The team at Akili has been successful in applying clinical and scientific
rigor to bring new products forward, and we believe their expertise will
complement our efforts. Together, we can build a company that brings these
behavioral services to as many patients as possible - regardless of where they
are or barriers that exist for them today."

 

"Akili ran a thorough strategic process and we believe that this transaction
represents Akili's commitment to delivering value to the Akili stockholder,"
added Matt Franklin, Chief Executive Officer of Akili. "Virtual Therapeutics
has been built by a team with decades of success in the gaming industry and
elected to focus their expertise to help solve the growing mental health
crisis. Combining our proven track record developing and deploying rigorously
validated mobile digital therapeutics with Virtual Therapeutics' robust
portfolio of VR-based mental health solutions and gaming expertise, we aim to
create a compelling platform to address mental health needs across several
high-impact indications."

 

Transaction Details

The transaction, approved by both of Virtual Therapeutics' and Akili's board
of directors, is expected to close in the third quarter of 2024, subject to
certain closing conditions, including the tender of a majority of Akili shares
into a tender offer to be launched by Virtual Therapeutics and Akili having
not less than a specified amount of cash-on-hand, depending on the closing
time. The transaction is not subject to a financing condition.

Upon completion of the transaction, Akili's common stock will no longer be
listed on any public stock exchange.

 

Advisors

TD Cowen is acting as exclusive financial advisor and Goodwin Procter LLP is
acting as legal counsel to Akili. Baker & McKenzie LLP is acting as legal
counsel to Virtual Therapeutics.

 

About Akili

Akili is pioneering the development of cognitive treatments through
game-changing technologies. Akili's approach of leveraging technologies
designed to directly target the brain establishes a new category of medicine -
medicine that is validated through clinical trials like a drug or medical
device but experienced like entertainment. Akili's platform is powered by
proprietary therapeutic engines designed to target cognitive impairment at its
source in the brain, informed by decades of research and validated through
rigorous clinical programs. Driven by Akili's belief that effective medicine
can also be fun and engaging, Akili's products are delivered through
captivating action video game experiences. For more information, please visit
www.akiliinteractive.com.

 

About Virtual Therapeutics

Virtual Therapeutics is a digital health company delivering scalable,
accessible, affordable, and personalized solutions for mental health and
mental fitness. Leveraging extensive expertise as game developers, the company
crafts and curates rich, appealing experiences that combine proven therapeutic
techniques with modern gameplay mechanisms to delight and engage users.
Virtual Therapeutics uses powerful cloud-based platform to gather and analyze
various data streams to continuously measure, validate, and report
effectiveness, seamlessly deploy and maintain its solutions, and provide users
and partners with a truly turnkey experience. For more information, visit
https://www.vthera.com/.

 

Contact

For Akili

Matt Franklin, President and Chief Executive Officer

InvestorRelations@akiliinteractive.com or PR@akiliinteractive.com

 

For Virtual Therapeutics

Ian Stone, Inizio Evoke Communications

ian.stone@inizioevoke.com

619-518-3518

 

Forward-looking Statements

This communication relates to the proposed transaction pursuant to the terms
of the Agreement and Plan of Merger, dated May 29, 2024, by and among Virtual
Therapeutics Corporation ("Parent"), Alpha Merger Sub, Inc. ("Purchaser"), and
Akili, Inc. ("Akili"). This communication includes express or implied
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), about the proposed acquisition
of Akili by Parent and the operations of the combined company that involve
risks and uncertainties relating to future events and the future performance
of Akili. Actual events or results may differ materially from
these forward-looking statements. Words such as "will," "could," "would,"
"should," "expect," "plan," "anticipate," "intend," "believe," "estimate,"
"predict," "project," "potential," "continue," "future," "opportunity" "will
likely result," "target," variations of such words, and similar expressions or
negatives of these words are intended to identify
such forward-looking statements, although not
all forward-looking statements contain these identifying words.

 

These statements are based on  current plans, estimates and projections. By
their very nature, forward-looking statements involve inherent risks and
uncertainties, both general and specific. A number of important factors,
including those described in this communication, could cause actual results to
differ materially from those contemplated in any forward-looking statements.
Factors that may affect future results and may cause
these forward-looking statements to be inaccurate include, without
limitation: uncertainties as to the timing of the tender offer and merger;
uncertainties as to how many of Akili's stockholders will tender their stock
in the offer; the possibility that competing offers will be made by third
parties; the occurrence of events that may give rise to a right of one or
both of Parent and Akili to terminate the merger agreement; the possibility
that various closing conditions for the proposed transaction may not be
satisfied or waived on a timely basis or at all, including the possibility
that a governmental entity may prohibit, delay, or refuse to grant approval,
if required, for the consummation of the proposed transaction (or only grant
approval subject to adverse conditions or limitations); the difficulty of
predicting the timing or outcome of consents or regulatory approvals or
actions, if any; the possibility that the proposed transaction may not be
completed in the time frame expected by Parent and Akili, or at all; the risk
that Akili may not realize the anticipated benefits of the proposed
transaction in the time frame expected, or at all; the effects of the proposed
transaction on relationships with Akili's employees, business or collaboration
partners or governmental entities; the ability to retain and hire key
personnel; potential adverse reactions or changes to business relationships
resulting from the announcement or completion of the proposed transaction;
significant or unexpected costs, charges or expenses resulting from the
proposed transaction; potential negative effects related to this announcement
or the consummation of the proposed acquisition on the market price of Akili's
common stock; unknown liabilities related to Parent or Akili; the nature, cost
and outcome of any litigation and other legal proceedings involving Akili or
its officers and directors, including any legal proceedings related to the
proposed acquisition; and risks related to global as well as local political
and economic conditions, including interest rate and currency exchange rate
fluctuations. While the foregoing list of factors presented here is considered
representative, no list should be considered to be a complete statement of all
potential risks and uncertainties. There can be no assurance that the proposed
transaction or any other transaction described above will in fact be
consummated in the manner described or at all. A more complete description of
these and other material risks can be found in Akili's filings with the U.S.
Securities and Exchange Commission (the "SEC"), including its Annual Report on
Form 10-K for the year ended December 31, 2023, subsequent Quarterly Reports
on Form 10-Q and other documents that may be filed by Akili from time to time
with the SEC, as well as the Schedule TO and related tender offer documents to
be filed by Parent and its indirect wholly owned subsidiary, Purchaser, and
the Schedule 14D-9 to be filed by Akili. Parent and Akili also plan to file
other relevant documents with the SEC regarding the proposed transaction.

 

Any forward-looking statements speak only as of the date of this
communication and are made based on management's current beliefs and
assumptions and on information currently available to Parent and Akili, and
the reader is cautioned not to rely on any forward-looking statements.
Parent and Akili do not undertake, and specifically decline, any obligation to
update any such statements or to publicly announce the results of any
revisions to any such statements to reflect future events or developments,
except as required by law.

 

Additional Information and Where to Find It

 

The tender offer for all of the outstanding shares of common stock of Akili
referenced in this document has not yet commenced. This document is for
informational purposes only and is neither an offer to purchase nor a
solicitation of an offer to sell securities of Akili, nor is it a substitute
for the tender offer materials that Parent, Purchaser or Akili will file with
the SEC. The solicitation and offer to buy the common stock of Akili will only
be made pursuant to an Offer to Purchase and related tender offer materials
that Parent and Purchaser intend to file with the SEC. At the time the tender
offer is commenced, Parent and Purchaser will file with the SEC a Tender Offer
Statement on Schedule TO, and thereafter Akili will file a
Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC with
respect to the tender offer. AKILI'S STOCKHOLDERS AND OTHER INVESTORS ARE
URGED TO READ CAREFULLY THE TENDER OFFER MATERIALS (INCLUDING AN OFFER TO
PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER
DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9
BECAUSE THEY WILL EACH CONTAIN IMPORTANT INFORMATION THAT HOLDERS OF AKILI
SECURITIES AND OTHER INVESTORS SHOULD CONSIDER BEFORE MAKING ANY DECISION WITH
RESPECT TO THE TENDER OFFER. The Offer to Purchase, the related Letter of
Transmittal, certain other tender offer documents, as well as the
Solicitation/Recommendation Statement will be made available to all
stockholders of Akili at no expense to them and will also be made available
for free at the SEC's website at www.sec.gov. Additional copies may be
obtained for free by contacting either Parent or Akili. Copies of the
documents filed with the SEC by Akili will be available free of charge on
Akili's website at www.Akiliinteractive.com or by contacting Akili's Investor
Relations Department at InvestorRelations@Akiliinteractive.com or
PR@Akiliinteractive.com.

 

In addition to the Offer to Purchase, the related Letter of Transmittal and
certain other tender offer documents, as well as the
Solicitation/Recommendation Statement, Akili files annual, quarterly and
current reports and other information with the SEC. Akili's filings with the
SEC are also available to the public from commercial document-retrieval
services and at the website maintained by the SEC at http://www.sec.gov.

 

About PureTech Health

PureTech is a clinical-stage biotherapeutics company dedicated to giving life
to new classes of medicine to change the lives of patients with devastating
diseases. The Company has created a broad and deep pipeline through its
experienced research and development team and its extensive network of
scientists, clinicians and industry leaders that is being advanced both
internally and through its Founded Entities. PureTech's R&D engine has
resulted in the development of 29 therapeutics and therapeutic candidates,
including two that have received both U.S. FDA clearance and European
marketing authorization and a third (KarXT) that has been filed for FDA
approval. A number of these programs are being advanced by PureTech or its
Founded Entities in various indications and stages of clinical development,
including registration enabling studies. All of the underlying programs and
platforms that resulted in this pipeline of therapeutic candidates were
initially identified or discovered and then advanced by the PureTech team
through key validation points.

 

For more information, visit www.puretechhealth.com
(http://www.puretechhealth.com/)  or connect with us on X (formerly Twitter)
@puretechh.

 

Cautionary Note Regarding Forward-Looking Statements

This press release contains statements that are or may be forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements contained in this press release that do not relate to
matters of historical fact should be considered forward-looking statements,
including without limitation those related to the proposed acquisition of
Akili by Virtual Therapeutics and the resulting proceeds to be received by the
Company as a shareholder of Akili, as well as our future prospects,
developments and strategies. The forward-looking statements are based on
current expectations and are subject to known and unknown risks, uncertainties
and other important factors that could cause actual results, performance and
achievements to differ materially from current expectations, including, but
not limited to, those risks, uncertainties and other important factors
described under the caption "Risk Factors" in our Annual Report on Form 20-F
for the year ended December 31, 2023 filed with the SEC and in our other
regulatory filings. These forward-looking statements are based on assumptions
regarding the present and future business strategies of the Company and the
environment in which it will operate in the future. Each forward-looking
statement speaks only as at the date of this press release. Except as required
by law and regulatory requirements, we disclaim any obligation to update or
revise these forward-looking statements, whether as a result of new
information, future events or otherwise.

 

Contact:

PureTech

Public Relations

publicrelations@puretechhealth.com (mailto:publicrelations@puretechhealth.com)

Investor Relations

IR@puretechhealth.com (mailto:IR@puretechhealth.com)

 

UK/EU Media

Ben Atwell, Rob Winder

+44 (0) 20 3727 1000

puretech@fticonsulting.com (mailto:puretech@fticonsulting.com)

 

US Media

Nichole Bobbyn

+1 774 278 8273

nichole@tenbridgecommunications.com
(mailto:nichole@tenbridgecommunications.com)

 

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