PureTech-backed Gelesis wins biotech's latest SPAC deal, planning to bring weight loss product to up to 150M Americans
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The latest PureTech-founded biotech is heading to the New York Stock Exchange, and it comes through a new SPAC reverse merger.
Developing weight-management pills that are on the cusp of a national rollout, Gelesis will reverse merge with Capstar Special Purpose Acquisition Corp., the entities announced Monday morning. The deal will give Gelesis access to the $376 million raised from the SPAC, as well as another $100 million in PIPE funding.
The merger is expected to close before the end of 2021 with Gelesis earning a pro forma implied value of $1.3 billion with the deal.
Gelesis decided to go with a SPAC rather than a more traditional IPO, CEO Yishai Zohar told Endpoints News in an interview, because it highly valued the SPAC team’s commercial experience, which will aid in a rapid rollout later this year.
“What we thought was very appealing for us is the idea that we will emerge with a SPAC that has a very strong consumer and commercial expertise,” Zohar told Endpoints. “We realize that our label is such that we need a very wide consumer approach and strategy. We wanted to build those capabilities.”
That expertise comes from a syndicate with a variety of business experience. Capstar’s CEO is R. Steven Hicks, a Texas telecom magnate whose former company AMFM is the US’ largest radio station operator with more than 450 stations nationwide. There’s also lead director Rodrigo de la Torre, the head of finance and strategy for Taco Bell Global since April 2019 who previously served in a senior role at Pizza Hut International.
Some of the SPAC cash is also slated to ramp up manufacturing of the pills, which are branded under the name Plenity.
Gelesis is the third PureTech entity to go public after Karuna Therapeutics hit Nasdaq with a traditional IPO in 2019 and Vor Biopharma followed suit earlier this year. Gelesis’ SPAC raise, however, dwarfs both of the previous totals: Karuna raised $89.2 million in its IPO and Vor pulled in $176.9 million.
The biotech is attempting to make its mark on weight management through the use of pills that mimic the feeling of eating vegetables, Gelesis said in an investor call Monday morning. With a regimen to be taken prior to meals, Plenity expands by absorbing water and fills up to 25% of the stomach by volume, making patients feel fuller before eating.
Plenity has been cleared by the FDA as a device, Zohar noted, and the company says it’s received the broadest label of any weight maintenance treatment — individuals with a BMI between 25 and 40 are eligible for prescription. Furthermore, he said, patients do not need comorbidities to take Plenity, a key requirement for other such drugs and devices already on the market.
In the US alone, that accounts for about 150 million adults.
Gelesis had initiated a beta launch program in late 2020 that saw membership rise above 48,000 and is planning full-scale national commercialization by the end of the year. For the beta, the pills were priced at $98 per 28-day supply, with that figure expected to remain the same once Plenity upscales, a Gelesis spokesperson told Endpoints in an email.
The biotech is not disclosing sales numbers for the beta program, the spokesperson added.
With the news of the deal, Gelesis is touting the safety and efficacy for the pills as well. In previous studies completed for the product, Zohar says 59% of adults saw greater than 5% weight loss and 26% lost more than 10%. Compared to placebo, Plenity doubled a patient’s chances of losing at least 5% of their weight.
Plenity’s side effect profile was statistically no different than placebo, with no serious adverse events.
One such previous trial, however, said Plenity failed to demonstrate a 3% mean difference of weight loss between the drug arm and the placebo group, a figure regulators typically have looked for in the past. But because overall risk profiles were so low, and because Plenity worked well for those who did respond, the FDA cleared the product with as broad a label as it did, Zohar said.
“The beauty of our approach is because of its favorable safety and tolerability profile; there’s no harm for everyone to try and see if they’re a responder,” Zohar said. “With weight loss, because it’s such a heterogeneous problem, it’s very usual that you don’t have one solution that applies for everyone.”
Gelesis is primarily going to focus on selling Plenity in the US until the company has beefed up manufacturing, though it also signed a partnership to market the product in Greater China, Zohar said.
After hundreds of SPACs flooded the market late last year and in 2021’s first quarter, mergers started to hit the gas pedal once the calendar turned to spring. Overall, SPACs have steered more than $15 billion to the life sciences industry in 2021, according to the Endpoints tally.