Morgan Stanley Initiates Coverage On This Digital Therapeutics Stock With Attractive View

Morgan Stanley initiated coverage on Akili Inc AKLI with an Equal Weight rating and a price target of $2.
The analyst notes that Akili's lead product EndeavorRx is indicated for attention deficit/hyperactivity disorder (ADHD). It received marketing authorization from the FDA in mid-2020 as a medical device for patients aged 8-12 with ADHD, and a commercial launch commenced in late 2022
The data in ADHD is promising and strongly suggestive of a treatment effect. Morgan Stanley anticipates EndeavorRx could generate more than $200 million in peak sales in ADHD.
The analyst also says that given the skepticism the market currently appears to hold for the sales potential for digital therapeutics, a significant focus on early launch metrics, including script growth and refill rates, is expected.
An additional area of focus for digital therapeutics broadly (including EndeavorRx) in 2023 will likely be reimbursement.
Akili is also conducting pivotal studies in additional age groups for ADHD. Pivotal data in patients aged 13-17 and 18+ is expected in 2H23.
Price Action: AKLI shares are up 5.78% at $1.03 on the last check Thursday.