Shares in Karuna Therapeutics Inc. soared Aug. 8 as the biotech moved closer to a breakthrough for schizophrenia therapy after its potential first-in-class drug Karxt (xanomeline + trospium) met its goals in a closely watched phase III trial. Analysts said results from the Emergent-2 trial were at the top end of what was expected, lifting Karuna’s shares (NASDAQ:KRTX) 71.8% to a 52-week high of $241.19.

Wysa Ltd.’s artificial intelligence-based digital therapy received FDA breakthrough device designation for adults with chronic musculoskeletal pain, depression and anxiety. The device delivers cognitive behavioral therapy (CBT) via a digital companion or conversational agent on a smartphone.

Results from a new peer-reviewed study show people develop emotional bonds with artificial intelligence (AI) therapy chatbots in a similar way to in-person therapists. The study evaluated 1,205 people using a mental health app developed by Wysa Ltd. to assist symptoms of anxiety or depression. The chatbot guides users through therapy exercises including cognitive-behavioral techniques (CBT), dialectical behavior therapy, meditation, breathing and yoga to build mental resilience skills.

Woebot Labs Inc. secured a $9.5 million investment from Leaps by Bayer, the impact investment arm of Bayer AG, to speed development of its artificial intelligence (AI)-enhanced behavioral health platform and digital therapeutics. The new infusion tops up Woebots fundraising, bringing its total to date to $123.5 million. The Woebot investment marks Leaps by Bayer’s first foray into mental health.

Schizophrenia remains one of the toughest mental health issues to treat, as well as an indication that has created substantial challenges for drug makers. The pipeline of potential new schizophrenia medicines is busy, with Cortellis showing that 10 new phase III schizophrenia trials that began recruiting patients in 2021 and 59 phase III trials ongoing at the end of the year.

Investor appetite for digital mental health technologies is expected to continue in 2022, although startups will face the challenge of standing out from competition. Venture capital firm Rock Health reported funding for digital mental health startups was the top-funded therapeutic focus in 2021, with $3.1 billion raised by the end of Q3. Key trends are emerging, as investors seek companies addressing complex mental health conditions.

Ieso Digital Health Ltd. raised £39 million (US$52.5 million) in financing to develop new tools for its digital cognitive behavioral therapy (CBT) service. Investment firm Morningside led the series B round with Sony Innovation Fund and existing shareholders IP Group, Molten Ventures and Ananda Impact Ventures also participating. Ieso’s digital platform connects users to mental health practitioners for text-based therapy.

The Scottish government has signed a deal with digital therapeutics company Big Health Inc. to make a cognitive behavior therapy (CBT) platform for anxiety and insomnia available through the NHS. It makes Scotland the first country to provide a digital therapeutic for anxiety and insomnia nationally.

Pear Therapeutics Inc. released nine-month, real-world data showing long-term reduction in costly health care utilization categories, including inpatient stays and emergency department visits, in patients with opioid use disorder (OUD) who utilize its Reset-O prescription digital therapeutic. The findings suggest that Reset-O could help to stabilize patient outcomes long-term when used in conjunction with outpatient treatment.