Cerebral Board Members Agree to Replace CEO Amid Federal Probe Into Prescription Practices

Investors and an independent director who together control four of the board’s seven seats agreed that Mr. Robertson should be replaced by the firm’s president and chief medical officer, David Mou, some of the people said. Mr. Robertson, who is also Cerebral’s co-founder and controls the other three seats, didn’t participate in the meeting, but afterward he lost access to the company’s Slack messaging system without advance notice, another person said. Mr. Robertson hadn’t agreed to depart his CEO role as of late Tuesday, 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 needing mental-health care that they could no longer easily get in person. He also oversaw prescription practices that some of the company’s nurse practitioners have said left them feeling pressured to prescribe stimulants to patients for attention deficit hyperactivity disorder, or ADHD, The Wall Street Journal reported in March.

Cerebral’s prescription practices have drawn interest from 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 it intended to cooperate with the investigation and that no regulatory or law-enforcement authority had accused it of violating any law.

A spokeswoman for Cerebral didn’t immediately respond to request for comment late Tuesday.

The members of Cerebral’s board lost confidence in Mr. Robertson’s leadership due to what they felt was the company’s aggressive strategy to push into the diagnosis and treatment of ADHD and Mr. Robertson’s reluctance to follow advice from medical staffers who sometimes counseled a slower approach, according to the people familiar with their thinking. The investors are looking to Dr. Mou to take over as CEO in part because of his medical training, said these people. Mr. Robertson has no medical training. Cerebral controlling board members 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, has overseen Cerebral’s treatment and prescription protocols, including for ADHD. The company said on May 4 that he had been promoted to president, one of a number of changes in leadership and policies it announced in the wake of scrutiny over the prescription policies.

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

Some Cerebral executives told Mr. Robertson on Tuesday that they had been instructed not to communicate with him, another of the people familiar with the matter said. Mr. Robertson believes he is being made a scapegoat for the company’s issues, the person said.

Bloomberg News earlier reported that Mr. Robertson’s access to Cerebral’s communications systems was revoked 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. The three firms hold seats on the board, along with independent director Jesse Horwitz.

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

Cerebral grew quickly under his leadership, helped by rapid expansion in its business diagnosing ADHD and prescribing stimulants including Adderall to treat it. Psychiatrists say that such stimulants can have significant benefits for people properly diagnosed with ADHD. The 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 Journal’s article in March reported that some of Cerebral’s nurse practitioners, in addition to feeling pressured to prescribe stimulants, said they felt that the company’s 30-minute patient evaluations were too short to properly diagnose ADHD. Cerebral said at the time that it doesn’t pressure clinicians to prescribe stimulants and that it was providing an essential service in the U.S., where demand for mental-health treatment far outstrips supply.

One person familiar with the investors’ thinking said that the March article prompted the company to re-examine its prescription practices for ADHD drugs.

The company has rapidly rolled back its prescription practices in recent weeks. Early this month it said it would pause prescriptions of stimulants to new patients seeking treatment for ADHD, while existing ADHD patients would continue on that medication.

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

Mr. Robertson’s email said that Cerebral had started prescribing controlled substances in 2020 to fill a void created by the inability of patients needing medication to get in-person treatment. He said Cerebral is halting most such prescriptions “due to 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 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.”

Write to Rolfe Winkler at [email protected]

Investors and an independent director who together control four of the board’s seven seats agreed that Mr. Robertson should be replaced by the firm’s president and chief medical officer, David Mou, some of the people said. Mr. Robertson, who is also Cerebral’s co-founder and controls the other three seats, didn’t participate in the meeting, but afterward he lost access to the company’s Slack messaging system without advance notice, another person said. Mr. Robertson hadn’t agreed to depart his CEO role as of late Tuesday, 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 needing mental-health care that they could no longer easily get in person. He also oversaw prescription practices that some of the company’s nurse practitioners have said left them feeling pressured to prescribe stimulants to patients for attention deficit hyperactivity disorder, or ADHD, The Wall Street Journal reported in March.

Cerebral’s prescription practices have drawn interest from 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 it intended to cooperate with the investigation and that no regulatory or law-enforcement authority had accused it of violating any law.

A spokeswoman for Cerebral didn’t immediately respond to request for comment late Tuesday.

The members of Cerebral’s board lost confidence in Mr. Robertson’s leadership due to what they felt was the company’s aggressive strategy to push into the diagnosis and treatment of ADHD and Mr. Robertson’s reluctance to follow advice from medical staffers who sometimes counseled a slower approach, according to the people familiar with their thinking. The investors are looking to Dr. Mou to take over as CEO in part because of his medical training, said these people. Mr. Robertson has no medical training. Cerebral controlling board members 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, has overseen Cerebral’s treatment and prescription protocols, including for ADHD. The company said on May 4 that he had been promoted to president, one of a number of changes in leadership and policies it announced in the wake of scrutiny over the prescription policies.

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

Some Cerebral executives told Mr. Robertson on Tuesday that they had been instructed not to communicate with him, another of the people familiar with the matter said. Mr. Robertson believes he is being made a scapegoat for the company’s issues, the person said.

Bloomberg News earlier reported that Mr. Robertson’s access to Cerebral’s communications systems was revoked 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. The three firms hold seats on the board, along with independent director Jesse Horwitz.

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

Cerebral grew quickly under his leadership, helped by rapid expansion in its business diagnosing ADHD and prescribing stimulants including Adderall to treat it. Psychiatrists say that such stimulants can have significant benefits for people properly diagnosed with ADHD. The 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 Journal’s article in March reported that some of Cerebral’s nurse practitioners, in addition to feeling pressured to prescribe stimulants, said they felt that the company’s 30-minute patient evaluations were too short to properly diagnose ADHD. Cerebral said at the time that it doesn’t pressure clinicians to prescribe stimulants and that it was providing an essential service in the U.S., where demand for mental-health treatment far outstrips supply.

One person familiar with the investors’ thinking said that the March article prompted the company to re-examine its prescription practices for ADHD drugs.

The company has rapidly rolled back its prescription practices in recent weeks. Early this month it said it would pause prescriptions of stimulants to new patients seeking treatment for ADHD, while existing ADHD patients would continue on that medication.

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

Mr. Robertson’s email said that Cerebral had started prescribing controlled substances in 2020 to fill a void created by the inability of patients needing medication to get in-person treatment. He said Cerebral is halting most such prescriptions “due to 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 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.”

Write to Rolfe Winkler at [email protected]