Cerebral board members agree to replace CEO in federal probe into prescribing practices

Trustees who control Cerebral Inc.’s board have agreed to a plan to replace chief executive Kyle Robertson, sparking uproar among the mental health startup’s management as it faces scrutiny careful about his controlled substance prescribing practices, people familiar with the matter said on Tuesday.

Investors and an independent director who together control four of the seven board seats have agreed that Mr Robertson should be replaced by the company’s chairman and chief medical officer, David Mou, some people said. Mr Robertson, who is also a co-founder of Cerebral and controls the other three headquarters, did not attend the meeting but subsequently lost access to the company’s Slack messaging system without notice , said another person. Mr Robertson had not agreed to quit his role as CEO on Tuesday night, the people said.

Mr. Robertson helped launch Cerebral in January 2020 and guided its rapid growth during the Covid-19 pandemic as it sought to serve patients in need of mental health care they could no longer easily obtain by nobody. He also oversaw prescribing practices that some nurse practitioners at the company say led them to prescribe stimulants to patients with attention deficit hyperactivity disorder, or ADHD, The Wall Street Journal reported in March. .

Cerebral’s prescribing practices have attracted the interest of federal prosecutors. The company said this month that its medical group received a subpoena from the U.S. Attorney’s Office for the Eastern District of New York as part of an investigation into possible violations of the Controlled Substances Act. Cerebral said at the time that he intended to cooperate with the investigation and that no regulatory or law enforcement authority had accused him of breaking any law.

A Cerebral spokeswoman did not immediately respond to request for comment Tuesday evening.

Cerebral’s board members lost faith in Mr. Robertson’s leadership due to what they felt was the company’s aggressive strategy to push ADHD diagnosis and treatment and Mr. Robertson to take the advice of medical staff who sometimes advised a slower approach, according to people familiar with their thinking. Investors are looking to Dr. Mou to take over as CEO in part because of his medical background, these people said. Mr. Robertson has no medical training. Members of the brain control board also agreed to add a new director with a medical background, the people said.

Dr. Mou, a board-certified psychiatrist who joined the company in February 2021, oversaw Cerebral’s treatment and prescription protocols, including for ADHD. The company said on May 4 that he had been promoted to president, one of several leadership and policy changes announced following scrutiny of statute-barred policies.

A draft press release has been prepared announcing Mr Robertson’s resignation, which investors hope he will sign, said a person familiar with the draft.

Some Cerebral executives told Mr Robertson on Tuesday they had been instructed not to communicate with him, another person familiar with the matter said. Mr Robertson believes he has become a scapegoat for the company’s problems, the person said.

Bloomberg News earlier reported that Mr. Robertson’s access to Cerebral’s communications systems was revoked on Monday.

Cerebral’s investors include Access Industries, WestCap Group and SoftBank Group Corp., whose SoftBank Vision Fund 2 led a $300 million investment round in December that valued the company at $4.8 billion. All three firms sit on the board, alongside independent director Jesse Horwitz.

Mr Robertson, who co-founded Cerebral when he was 27, said both his parents were mental health clinicians and he helped start the company in part because of his personal experience with depression .

Cerebral grew rapidly under his leadership, aided by the rapid expansion of its business diagnosing ADHD and prescribing stimulants, including Adderall, to treat it. Psychiatrists say these stimulants can have significant benefits for people correctly diagnosed with ADHD. Stimulants are classified as Schedule 2 controlled substances by the federal government due to their potential for abuse, the same category as Vicodin and OxyContin.

The March Journal article reported that some of Cerebral’s nurse practitioners, in addition to feeling pressured to prescribe stimulants, said they felt the company’s 30-minute patient assessments were too short to properly diagnose. ADHD. Cerebral said at the time that it did not pressure clinicians to prescribe stimulants and that it provided an essential service in the United States, where the demand for mental health treatment far exceeds the offer.

A person familiar with the thinking of investors said the March article prompted the company to re-examine its ADHD drug prescribing practices.

The company quickly reversed its prescribing practices in recent weeks. Earlier this month, it announced it would suspend stimulant prescriptions for new patients seeking treatment for ADHD, while existing ADHD patients would continue to take the drug.

On Monday, before his access was revoked, Mr. Robertson sent an email to employees announcing that Cerebral would stop prescribing nearly all controlled substances, including stimulants, to new and existing patients.

Robertson’s email said Cerebral began prescribing controlled substances in 2020 to fill a void created by the inability of patients in need of medication to get in-person treatment. He said Cerebral is discontinuing most of these prescriptions “due to the changing landscape around mental health care accessibility and the possibility of patients returning to an in-person or hybrid model of care for this treatment “.

“We want to assure you that we are confident in the future of the business,” Mr. Robertson’s email said. “We will continue to focus on improving access to high quality mental health care for hundreds of thousands of lives. »

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Write to Rolfe Winkler at [email protected]

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