FDA-Accepted Weight Loss Drug Plenity’s Mother or father Firm Pronounces SPAC Deal: What Traders Ought to Know
A SPAC deal announced on Monday could help accelerate the manufacture of a promising weight loss drug that will target over 150 million people.
The SPAC deal: Read announced a SPAC merger with Capstar Special Purpose Acquisition Corp (NYSE: CPSR). The deal values the company at a pro forma market value of $ 1.3 billion.
Public CPSR shareholders will own 21% of the company after the merger. The shares will trade as GLS on the NYSE upon approval of the merger.
About read: Biotherapeutic company Gelesis has a pipeline of drugs that target weight and metabolic disorders. The company’s first product Abundance is FDA approved to aid weight management in overweight and obese adults.
Plenity helps with portion control and caters to more than 150 million Americans. Plenity offers a wide range of prescription weight management options compared to others in the industry.
Plenity capsules act locally in the user’s gastrointestinal tract instead of being absorbed. The capsule taken with water helps people be satisfied with smaller meals.
Growth ahead: The IPO will help the company expand its production to meet expected demand for Plenity, the company said. Current plans are for 50% of Line 1’s production in August and 100% in December. Production will also be ramped up in 2022.
With Plenity, six in ten adults lost an average of 10% of their body weight during clinical trials with no additional side effects compared to placebo.
Gelesis will have a direct-to-patient approach with multiple partnerships. Telehealth platform Ro and personal visits to health care providers are used to recommend Plenity to potential customers.
Plenity costs $ 98 per month for customers. The capsule is now available in a limited edition with more than 48,000 current members since the beta start in October 2020.
With limited advertising and marketing, Plentity outperformed all prescription weight management companies in the first month of testing.
Gelesis has a partnership with WW International Inc (NASDAQ: WW), the owner of the Weight Watchers brand. WW members receive a discount on Plenity.
Gelesis has pre-sold the commercial rights to Plenity in China for $ 35 million and has the potential to earn $ 388 million in milestones along with royalties in the future.
Finances: Gelesis expects sales to grow at an average annual growth rate of 50% over the next five years. The company estimates fiscal 2021 revenue at $ 26 million and fiscal 2022 revenue at $ 171 million. The company sees sales of $ 442 million in fiscal year 2023 with a market share of less than 0.5%.
Gelesis expects 69,000 units to be sold in fiscal 2021 and 421,000 units to be sold in fiscal 2023.
CPSR price promotion: CPSR shares rose 0.51% to $ 9.84 on Monday.
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