Cerebral CEO Fights for His Job Amid US Prescription Probe

Kyle Robertson (picture), the entrepreneur who grew Cerebral Inc. into a $4.8 billion behemoth in online mental health and became a prominent face of the fast-growing industry, is fighting for his job.

Major investors with board seats overseeing Cerebral, which is the subject of a federal investigation into its prescribing practices, are planning to remove Robertson from the board and replace him as chief executive officer, according to people familiar with the matter. That move could come as early as Wednesday, said one of the people, all of whom requested anonymity discussing the potential ouster.

The showdown comes after Cerebral announced late Monday that it would stop prescribing almost all controlled substances. The investors’ plan calls for naming David Mou, the company’s president and chief medical officer, as CEO, one of the people said.

For now, Robertson still has the CEO title, though his access to the company’s internal communications systems was revoked late Monday, said one of the people.

Robertson cofounded Cerebral in 2019 and transformed it into one of the world’s fastest growing startups. One early TV ad featured Robertson, who has no formal medical training, sitting on a couch with his psychiatrist father and psychotherapist mother. When the company launched a partnership with Olympic gymnast Simone Biles, Robertson appeared alongside her on NBC’s Today Show, and in photos posted to Twitter and LinkedIn. A representative for Biles didn’t reply to a request for comment.

Under Robertson’s leadership, Cerebral drew key investments, including from SoftBank Vision Fund 2, Len Blavatnik’s Access Industries and WestCap Group. All three investors have seats on Cerebral’s board; their representatives didn’t respond to requests for comment.

But the CEO’s style alienated some employees, who said the startup’s drive for growth had imperiled patient care.

Cerebral came in for heightened scrutiny after Bloomberg Businessweek reported in March that many of the nurse practitioners it employed said they feared the company was over-prescribing the addictive amphetamines used to treat attention deficit/hyperactivity disorder. Others raised concerns about the company’s aggressive advertising on social-media platforms, including TikTok. After that report appeared, the federal Drug Enforcement Administration interviewed at least two employees, according to people familiar with the conversations.

Earlier this month, Cerebral received a grand jury subpoena from the US Attorney’s office for the Eastern District of New York. A company spokeswoman said at the time that a federal investigation was focused on possible violations of the Controlled Substances Act and that the company intended to cooperate fully with the probe. “To be clear, at this time, no regulatory or law enforcement authority has accused Cerebral of violating any law,” the spokeswoman said.

Rules Changed

Cerebral and Robertson, who launched a publication focusing on startups while attending the University of Pennsylvania’s Wharton School of business, got into the business of prescribing controlled medications after federal officials relaxed previous rules requiring in-person examinations for such prescriptions.

That change, which came at the beginning of the Covid-19 pandemic, was designed to make it easier for people to access mental health care. And some Cerebral patients have said the company’s approach – using coordinators to handle patients’ incoming calls, allowing nurse practitioners to often prescribe drugs after just one 30-minute evaluation and distributing medications by mail – improved their lives greatly.

At the same time, some of Cerebral’s own nurses questioned whether the company was making ADHD medicines, such as Adderall, too easy to obtain. Experts say such medication can be subject to abuse by those who don’t have the disorder.

After criticism surfaced in Businessweek and other media outlets, Truepill, an online pharmacy favored by Cerebral, stopped filling prescriptions for Adderall and other controlled substances. Then a recently departed executive alleged in a lawsuit that Mou, then just Cerebral’s chief medical officer, told employees that the firm’s goal was to prescribe stimulants to 100% of its ADHD patients as part of a plan to increase customer retention. The company has denied those allegations.

Earlier this month, Cerebral said it would stop writing new prescriptions for Adderall and other ADHD drugs. Days later, the company said it had received the grand jury subpoena. US Attorney Breon Peace’s office has declined to comment.

Then, on Monday, Robertson announced to Cerebral employees that it would stop writing prescriptions for most controlled substances. He wrote in an email that they’ll be discontinued for new patients beginning on May 20 and for existing patients on Oct. 15. He said Cerebral will continue, when appropriate, to prescribe Suboxone and Narcan, which treat opioid addiction and overdoses.

Robertson has said Cerebral’s launch was rooted in his own struggle with anxiety and depression as a gay man. “Finding the right care was nearly impossible,” he said in the commercial he appeared in. As CEO, he has displayed a leadership style that employees described as abrasive.

Medical staff said they felt Robertson ignored their expertise and recruiters said he micromanaged them as they attempted to staff the company. Robertson told Businessweek in March that he’d begun working with an executive coach to resolve issues.

In an email sent to employees on Monday afternoon, Robertson said the company’s decision to stop prescribing most controlled substances was the result of “the evolving landscape around the accessibility of mental health care, and the ability for patients to return to an in-person or hybrid care model.”