The partnership has the potential to deliver $51m in revenues along with annuity-based royalty payments.

Digital health company TALi Digital (ASX:TD1) has taken a major step forward in its global distribution strategy, after signing an exclusive licensing deal with leading US company Akili Interactive.

Along with a major commercial revenue opportunity, the deal also places TALi’s technology at the centre of the global ecosystem for digital-based healthcare solutions to Attention Deficit Hyperactivity Disorder (ADHD) diagnoses in children aged 8-18.

And speaking with Stockhead following the announcement, TALi CEO Glenn Smith outlined how the Akili agreement gives the company a solid foundation for long-term growth.


Akili Therapeutics

A market leader with a first-mover advantage in the space, Akili has successfully commercialised a prescription-based digital health solution for ADHD.

Prior to commercialisation, the company’s EndeavorRx platform received regulatory backing from the US FDA, along with CE-mark accreditation from the European Medicines Agency.

Akili recently completed a US$160m funding round led by tier-one investment manager, Neuberger Berman.

In that context, its deal with TD1 is a validation of the company’s own technology – the video game-based TALi screening (DETECT) and training (TRAIN) products that initially targets attention in early childhood.


Exclusive licensing deal

Under the terms of the partnership, Akili will work directly with TALi’s team to develop its technology suite through additional clinical trials and regulatory approvals.

In doing so, TALi will leverage Akili’s detailed knowledge of the US market and its own success in commercialising the EndeavourRX through a detailed regulatory framework.

Upon clinical success, the deal has the potential to be “transformational and highly strategic” to TALi’s broader global growth ambitions, the company said.

The company estimates it will receive total payments of up to $51m if the relevant clinical and sales milestones are met, in addition to ongoing royalty payments on future sales.

With such a company-making commercial opportunity now on the table, Smith said the deal lays a “solid foundation” for TALi to access the US market for ADHD therapeutics – which generates around US$10bn in annual revenues.


Partnership approach

“What it gives us is a commercial partner who’s going to assist with marketing, sales and the delivery of the product,” Smith said.

“We don’t have to worry about setting up a beachhead or doing recruiting. And that’s a massive saving for shareholders now and in the future, given the relative size and sophistication of the US health market.”

With a major US company and leading investors now in its corner, Smith said TALi now has a unique opportunity on two fronts.

“Because we’re working with global partners now, it means we’ll potentially cement more licensing deals and some of those discussions are already underway,” he said.

“Secondly, it gives us the capability to undertake more diverse research and product development for treatments in fields like dementia.

“So shareholders are getting great value from the Akili deal, but we really think the blue sky opportunity is also huge over the medium to longer term.”



More broadly, Smith said TALi’s deal reflects the fact that major global companies and sophisticated investors are increasingly throwing their weight behind clinically-backed health solutions that utilise digital technology.

That shift marks a relatively recent trend, and in a sense gives TALi a first-mover advantage – even though its technology is backed by more than 25 years of research in developmental psychology and cognitive neuroscience.

“I think the proposition is taking hold now that this area of digital health – specifically digital therapeutics – is optimising traditional health practices,” Smith said.

“By that I mean the current infrastructure around healthcare can be quite onerous and expensive.

“So when you have a true digital therapy solution you can deliver a much more valued-based approach, which is very much attuned to what governments, insurers and patient advocacy groups want to do moving forward.”

And with a detailed patent protection portfolio across major international markets and the ability to attract global partners with its technology, TALi now sits at the forefront of that shift.

“We’re an Australian-based tech company which is now right at the centre of this ecosystem,” Smith said.

“And you can see that through the fact that a US-based corporation with very substantial shareholders is taking the steps to integrate directly with our technology.

“So it effectively locks a tech company like us into a multi-decade partnership, because our IP and algorithms will be at the core of what they’re doing.

“In that sense I think this is a really exciting long-term story that’s based around annuity income, the globalisation of Australian technology, and creating better efficiencies in the healthcare sector.”

This article was developed in collaboration with TALi Digital, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.