17th July, 2021 – Gelesis, Inc. released a piece of news, which is summarized as follows:
Gelesis, Inc. and Capstar Special Purpose Acquisition Corp. (NYSE: CPSR) (“Capstar SPAC”), a special purpose acquisition company sponsored by affiliates of Capstar Partners, LLC and certain private funds managed by PIMCO, announced today that they have entered into a definitive business combination agreement. Upon completion of the transaction, the combined company’s securities are expected to be traded on the New York Stock Exchange under the symbol “GLS” .
A New Approach to Weight Management
Gelesis is a biotherapeutics company aiming to transform weight management using a proprietary biomimetic superabsorbent hydrogel technology. The Company’s first commercial product, Plenity®, is a U.S. Food and Drug Administration (FDA) cleared aid in weight management in adults with excess weight or obesity, Body Mass Index (BMI) of 25 to 40 kg/m2, when used in conjunction with diet and exercise. Plenity has the broadest BMI range of any prescription weight-management aid to date—over 150 million American adults could be eligible for treatment with Plenity, many of whom did not have a prescription alternative before. Plenity’s unique scientific approach and efficacy, safety and tolerability profile allow Gelesis to bring it to market in a completely new way.
Plenity capsules contain a non-systemic biomimetic hydrogel that is not absorbed but instead acts locally in the gastrointestinal (GI) tract. The capsules are taken with water before meals and are designed to help people feel satisfied with smaller meals. Plenity combines the simplicity and convenience of a consumer product with clinical and scientific validation as well as FDA regulatory clearance as a de novo Class II medical device. In clinical studies, ~6 out of 10 adults had clinically meaningful weight loss and those people lost on average, within six months, ten percent of their body weight (about 22 lbs). There was no difference in overall side effects compared to placebo. The most common side effects were diarrhea, distended abdomen, infrequent bowel movements and flatulence.
Gelesis’ novel platform technology is inspired by the structural and mechanical properties of raw vegetables. When consumed, the hydrogel forms small solid gel pieces in the stomach consisting of water held by a 3D cellulose structures, similar to raw vegetables. The structures, which have no calories, are homogeneously mixed with the ingested foods, increasing the volume and firmness of that meal while reducing its caloric density. The hydrogel pieces are not absorbed and partially degrade in the large intestine, releasing the water before leaving the body naturally. In clinical trials, this therapeutic approach demonstrated a strong efficacy and safety profile.
Management Comments
“We are delighted to have found such a stellar group of partners and investors as we expand the launch of the first and only FDA-cleared and clinically validated prescription aid for weight management that is available for the broadest range of the population with excess weight, including even those who are overweight without co-morbidities” said Yishai Zohar, Founder and CEO of Gelesis. “Capstar’s leadership team has a track record of successfully building known brands and tackling fundamental consumer problems across a variety of industries. We look forward to building on the exciting momentum of our beta launch with this partnership and funding, and we are committed to making a meaningful difference in the lives of millions of Americans seeking scientifically proven and convenient options to manage their weight.”
“Yishai and the Gelesis team have developed a tremendous solution that is poised to transform the weight management industry,” said Steve Hicks, the Chairman and CEO of Capstar. “We raised our Capstar SPAC last year with the goal of finding a high-growth, disruptive business that is helping people live a better, healthier life. Gelesis fits that criteria perfectly and we are elated to partner with them as they start their exciting next leg of growth.”
Transaction Overview
The transaction values the combined company at an implied enterprise value of approximately $1.0 billion and equity value of approximately $1.3 billion, based on a $10.00 per share price of Capstar common stock and assuming no redemptions by Capstar’s public shareholders. The transaction will provide up to $376 million in gross proceeds to the combined company from a combination of a $100 million common stock PIPE financing at $10.00 per share along with $276 million of cash held in Capstar’s trust account (assuming no redemptions by Capstar’s public shareholders). The PIPE financing is anchored by a mix of new and existing top tier investors and partners, including PIMCO private funds, Pritzker Vlock Family Office, China Medical Systems Holdings Limited (CMS), and co-founder PureTech Health. Kennedy Lewis Investment Management will invest $10 million in the PIPE conditioned upon the closing of their $100 million senior secured credit facility to the Company, which is subject to the completion of due diligence, final documentation, and customary closing conditions. Proceeds from the business combination, PIPE, and credit facility will be primarily used to support the full commercial launch of Plenity for weight management later this year and expanded manufacturing to meet consumer demand. Gelesis’ existing shareholders will convert 100% of their ownership stakes into the new company.
The transaction has been unanimously approved by the Boards of Directors of both Gelesis and Capstar. It is expected to close in the fourth quarter of 2021, subject to the satisfaction of certain closing conditions, including a registration statement being declared effective by the U.S. Securities and Exchange Commission (the “SEC”) and the approval of Capstar shareholders.
Further information can be found in the SPARC’s Press Release：