The Company ended the year with 79,100 total
members for Plenity®, demonstrating strong demand ahead of first
quarter 2022 debut media campaign
Gelesis reaffirms guidance for $58 million in
product revenue and anticipates 400% growth in 2022 following
strong early launch results reported earlier this month, including
record-high levels of prescriptions and online traffic
Gelesis (NYSE: GLS), the maker of Plenity for weight management,
today reported financial results for its fiscal year ended December
31, 2021.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220324005636/en/
Gelesis ended the year with 79,100 total
members for Plenity®, demonstrating strong demand ahead of first
quarter 2022 debut media campaign. (Photo: Business Wire)
Yishai Zohar, Founder and CEO of Gelesis, commented, “Earlier
this year, we kicked off our debut media campaign for Plenity and
have already seen 3.5-fold growth in new Plenity prescriptions in
the first few weeks since we began advertising. Demand through both
our telehealth and our traditional healthcare provider channels has
quickly reached record highs. We are thrilled by the feedback we
are receiving from thousands of new members who have recently begun
their weight loss journey with Plenity.”
As previously reported, Gelesis raised $105 million in gross
proceeds upon completion of a business combination with Capstar
Special Purpose Acquisition Corp. on January 13, 2022, debuting the
following day as a publicly traded company on the New York Stock
Exchange under the ticker symbol “GLS.” Gelesis CFO Elliot Maltz
said, “We began investing in broad awareness media in 2022, instead
of the fall of 2021, which has shifted some of our projections out
by a few months, but our market opportunity remains the same.
Already we have seen incredible demand for Plenity, and we are
confidently on the path to achieve 400% growth in product revenue
by the end of the year while significantly improving our gross
margin.”
Key Business Metrics
(Dollar amounts in thousands except where noted, Unaudited)
Year Ended December
31,
2021
2020
Members
79,100
18,800
Units Sold
170,969
40,987
Total product revenue, net
$
11,185
$
2,708
Average selling price per unit, net
$
65.42
$
66.07
Gross profit
$
1,202
$
294
Gross margin
10.7
%
10.9
%
Fiscal Year 2021 Results
- Product revenue, net, for the year was $11.2 million, a 313%
increase from 2020 when Plenity first became commercially available
through a beta launch.
- Gelesis received an aggregate $40 million of fully paid
preorders for Plenity during 2021.
- Gross profit for the year was $1.2 million driven primarily by
increased sales volume.
- Net loss for the year was $(93.3) million while Adjusted EBITDA
for the year was $(73.8) million.
- A total of 79,100 members had started their weight management
journey with Plenity as of the end of the year, despite limited
marketing investment and no efforts for broad awareness
building.
A reconciliation of Adjusted EBITDA, a non-GAAP financial
measure, to net loss, its most comparable financial measure under
generally accepted accounting principles in the United States
(“U.S. GAAP”), is included in the tables accompanying this press
release. See “Non-GAAP Financial Measures” for additional important
information regarding Adjusted EBITDA.
Recent Business Highlights
- As recently reported, new Plenity members per day increased
3.5-fold in the first three weeks of the national media campaign
launch that kicked off January 31, 2022, compared to previous
months before media campaign launch. Following the success of this
first wave of the campaign, the company is evaluating optimal media
channels, timing, pulse frequency, and investment levels going
forward.
- Gelesis’ exclusive telehealth partner, Ro, responded to growing
patient demand when it placed $40 million in pre-orders for Plenity
last year. Since then, the broad consumer launch, as well as the
continued growth of Ro’s direct-to-patient healthcare platform, has
led to Plenity becoming one of the most sought-after offerings on
Ro’s platform and bringing in more new members than any other
product.
- Healthcare provider (“HCP”) prescribing of Plenity was up 100%
over the first three weeks of the media campaign began, and 40% of
HCP prescriptions were requested by the consumer (a 60% increase
from the Company’s pre-campaign baseline).
- Gelesis completed the first phase of building its
commercial-scale manufacturing facility at the end of 2021 and
ramped-up supply to meet anticipated commercial demand.
- Completed business combination with Capstar SPAC on January 13,
2022, resulting in gross proceeds of $105 million.
Financial Outlook for Fiscal Year 2022
Gelesis provides guidance based on current market conditions and
expectations for revenue, gross profit, and Adjusted EBITDA, which
is a non-GAAP financial measure.
- Gelesis estimates product revenue, net, of about $58 million in
2022.
- Gelesis estimates a gross profit of $25 million to $30
million.
- Gelesis estimates Adjusted EBITDA of $(55) million to $(60)
million.
The guidance provided above constitutes forward-looking
statements which are subject to uncertainty. Actual results may
differ materially and we cannot anticipate the effect of changes in
marketing investment on our results from operations. Refer to the
“Forward-Looking Statements” safe harbor section below for
information on the factors that could cause our actual results to
differ materially from these forward-looking statements.
Our product revenue, net, gross profit, and Adjusted EBITDA
guidance is based on, among other factors, our current expectations
regarding the amount and timing of investments in broad awareness
media, which could be impacted by available liquidity and other
considerations as we monitor the rate of growth in new Plenity
members and units sold during upcoming quarters.
We have not reconciled forward-looking Adjusted EBITDA to its
most directly comparable U.S. GAAP measure, net loss, because we
cannot predict with reasonable certainty the ultimate outcome of
certain components of such reconciliations, including
market-related assumptions that are not within our control, or
others that may arise, without unreasonable effort. For these
reasons, we are unable to assess the probable significance of the
unavailable information, which could materially impact the amount
of future net loss.
Fiscal Year 2021 Conference Call and Webcast
Information
Gelesis will host a conference call today at 4:30 pm ET to
discuss the fiscal year 2021 results, followed by a
question-and-answer period. The conference call can be accessed by
dialing +1 (844) 200-6205 for U.S. participants and +1 (929)
526-1599 for all other participants. The conference ID is
649881.
A live webcast will also be available here, or on the Company’s
investor relations website at https://ir.gelesis.com/. A replay of
the webcast will be available shortly afterwards.
About Gelesis
Gelesis Holdings Inc. (NYSE: GLS) (“Gelesis”) is a
consumer-centered biotherapeutics company and the maker of
Plenity®, which is inspired by nature and FDA cleared to aid in
weight management. Our first-of-their-kind non-systemic
superabsorbent hydrogels are made entirely from naturally derived
building blocks. They are inspired by the composition and
mechanical properties of raw vegetables, taken by capsule, and act
locally in the digestive system, so people feel satisfied with
smaller portions. Our portfolio includes Plenity® and potential
therapies in development for patients with Type 2 Diabetes,
Non-alcoholic Fatty Liver Disease (NAFLD)/Non-alcoholic
Steatohepatitis (NASH), and Functional Constipation. For more
information, visit gelesis.com, or connect with us on Twitter
@GelesisInc.
Plenity® is indicated to aid weight management in adults with
excess weight or obesity, a Body Mass Index (BMI) of 25–40 kg/m²,
when used in conjunction with diet and exercise.
Important Safety Information about Plenity
- Patients who are pregnant or are allergic to cellulose, citric
acid, sodium stearyl fumarate, gelatin, or titanium dioxide should
not take Plenity.
- To avoid impact on the absorption of medications:
- For all medications that should be taken with food, take them
after starting a meal.
- For all medications that should be taken without food (on an
empty stomach), continue taking on an empty stomach or as
recommended by your physician.
- The overall incidence of side effects with Plenity was no
different than placebo. The most common side effects were diarrhea,
distended abdomen, infrequent bowel movements, and flatulence.
- Contact a doctor right away if problems occur. If you have a
severe allergic reaction, severe stomach pain, or severe diarrhea,
stop using Plenity until you can speak to your doctor.
Rx Only. For the safe and proper use of Plenity or more
information, talk to a healthcare professional, read the Patient
Instructions for Use, or call 1-844-PLENITY.
Forward-Looking Statements
Certain statements, estimates, targets and projections in this
press release may constitute “forward-looking statements” within
the meaning of the federal securities laws. The words “anticipate,”
“believe,” continue,” “could,” “estimate,” “expect,” “intend,”
“may,” “might,” “plan,” “possible,” “potential,” “predict,”
“project,” “should,” “strive,” “would” and similar expressions may
identify forward-looking statements, but the absence of these words
does not mean that statement is not forward looking.
Forward-looking statements are predictions, projections and other
statements about future events that are based on current
expectations and assumptions and, as a result, are subject to risks
and uncertainties. Forward-looking statements include, but are not
limited to, statements regarding our or our management team’s
expectations, hopes, beliefs, intentions or strategies regarding
the future, including those relating to Gelesis’ business
combination with Capstar Special Purpose Acquisition Corp.
(“Capstar”) and its expected benefits, Gelesis’ performance
following the business combination, the competitive environment in
which Gelesis operates, the expected future operating and financial
performance and market opportunities of Gelesis and statements
regarding Gelesis’ expectations, hopes, beliefs, intentions or
strategies regarding the future. In addition, any statements that
refer to projections, forecasts, or other characterizations of
future events or circumstances, including any underlying
assumptions, are forward-looking statements. Forward-looking
statements speak only as of the date they are made. Readers are
cautioned not to put undue reliance on forward-looking statements,
and Gelesis assumes no obligation and does not intend to update or
revise these forward-looking statements, whether as a result of new
information, future events, or otherwise. Gelesis gives no
assurance that any expectations set forth in this press release
will be achieved. Various risks and uncertainties (some of which
are beyond our control) or other factors could cause actual future
results, performance or events to differ materially from those
described herein. Some of the factors that may impact future
results and performance may include, without limitation: (i) the
size, demand and growth potential of the markets for Plenity® and
Gelesis’ other product candidates and Gelesis’ ability to serve
those markets; (ii) the degree of market acceptance and adoption of
Gelesis’ products; (iii) Gelesis’ ability to develop innovative
products and compete with other companies engaged in the weight
loss industry; (iv) Gelesis’ ability to finance and complete
successfully the commercial launch of Plenity® and its growth
plans, including new possible indications and the clinical data
from ongoing and future studies about liver and other diseases; (v)
failure to realize the anticipated benefits of the business
combination, including as a result of a delay or difficulty in
integrating the businesses of Capstar and Gelesis; (vi) the ability
of Gelesis to issue equity or equity-linked securities or obtain
debt financing in the future; (vii) the outcome of any legal
proceedings instituted against Capstar, Gelesis, or others in
connection with the business combination; (viii) the ability of
Gelesis to maintain its listing on the New York Stock Exchange;
(ix) the risk that the business combination disrupts current plans
and operations of Gelesis as a result of Gelesis being a publicly
listed issuer; (x) the regulatory pathway for Gelesis’ products and
responses from regulators, including the FDA and similar regulators
outside of the United States; (xi) the ability of Gelesis to grow
and manage growth profitably, maintain relationships with customers
and suppliers and retain Gelesis’ management and key employees;
(xii) costs related to the business combination, including costs
associated with the Gelesis being a publicly listed issuer; (xiii)
changes in applicable laws or regulations; (xiv) the possibility
that Gelesis may be adversely affected by other economic, business,
regulatory and/or competitive factors; (xv) Gelesis’ estimates of
expenses and profitability; (xvi) ongoing regulatory requirements,
(xvii) any competing products or technologies that may emerge,
(xviii) the volatility of the telehealth market in general, or
insufficient patient demand; (xix) the ability of Gelesis to defend
its intellectual property and satisfy regulatory requirements; (xx)
the impact of the COVID 19 pandemic on Gelesis’ business; (xxi) the
limited operating history of Gelesis; (xxii) the potential impact
of inflation on our operating expenses and costs of goods; and
(xxiii) those factors discussed in Capstar’s joint proxy/prospectus
filed with the SEC on December 27, 2021, under the heading “Risk
Factors”, and other documents of Gelesis filed, or to be filed,
with the SEC, by Gelesis. These filings address other important
risks and uncertainties that could cause actual results and events
to differ materially from those contained in the forward-looking
statements.
Key Business Metrics
We monitor the following key metrics to help us evaluate our
business, identify trends affecting our business, formulate
business plans and make strategic decisions. We believe the
following metrics are useful in evaluating our business:
Disclaimer
Gelesis assumes no obligation and does not intend to update or
revise the results provided in this press release. The results
provided in this press release represent past performance and are
not necessarily predictive of future results.
Members
We define members as the number of consumers in the United
States who have begun their weight loss journey with Plenity. This
is the cumulative historical number of recurring and non-recurring
consumers who have begun their weight loss journey as of the
respective reporting date. We do not differentiate from recurring
and non-recurring consumers as of the date of this earnings release
as (i) we strongly believe every member’s weight-loss journey is
chronic and long-term in nature, and (ii) owing to a limited
available supply of Plenity to-date, we have not initiated our
long-term strategy and mechanisms to retain and/or win-back
members.
Units sold
Units sold is defined as the number of 28-day supply units of
Plenity sold to consumers based on prescriptions, through our
strategic partnerships with online pharmacies and telehealth
providers as well as the units sold to our strategic partners
outside the United States. Note that the terms “units” and “monthly
kits”, as mentioned in Gelesis’ various public disclosures and
filings, are synonymous when used to describe the sales volume of
Plenity.
Product revenue, net
We recognize product revenue in accordance with Accounting
Standards Codification Topic 606, Revenue from Contracts with
Customers, when we transfer promised goods or services to customers
in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services.
Our product revenue is derived from product sales of Plenity,
net of estimates of variable consideration for which reserves are
established for expected product returns, shipping charges to
end-users, pharmacy dispensing and platform fees, merchant and
processing fees, and promotional discounts offered to
end-users.
Average selling price per unit, net
Average selling price per unit, net is the gross price per unit
sold during the period net of estimates of per unit variable
consideration for which reserves are established for expected
product returns, shipping charges to end-users, pharmacy dispensing
and platform fees, merchant and processing fees, and promotional
discounts offered to end-users.
Gross profit and gross margin
Our gross profit represents product revenue, net, less our total
cost of goods sold, and our gross margin is our gross profit
expressed as a percentage of our product revenue, net. Our gross
profit and gross margin have been and will continue to be affected
by a number of factors, including the prices we charge for our
product, the costs we incur from our vendors for certain components
of our cost of goods sold, the mix of channel sales in a period,
and our ability to sell our inventory.
Non-GAAP Financial Measures
In addition to our financial results determined in accordance
with GAAP, we believe that Adjusted EBITDA, a non-GAAP measure, is
useful in evaluating our operating performance. We define “Adjusted
EBITDA” as net (loss) income before depreciation and amortization
expenses, provision for (benefit from) income taxes, interest
expense, net, stock-based compensation and (gains) and losses
related to changes in fair value of our warrant liability, our
convertible promissory note liability, our tranche rights liability
and the One S.r.l. call option. We use Adjusted EBITDA to evaluate
our ongoing operations and for internal planning and forecasting
purposes because it facilitates internal comparisons of our
historical operating performance. We believe that this non-GAAP
financial measure, when taken together with the corresponding GAAP
financial measure, net loss, provides meaningful supplemental
information regarding our performance by excluding certain items
that may not be indicative of our business, results of operations,
or outlook. We consider Adjusted EBITDA to be an important measure
because it helps illustrate underlying trends in our business and
our historical operating performance on a more consistent basis. We
believe that Adjusted EBITDA is helpful to our investors as it is a
metric used by management in assessing the health of our business
and our operating performance.
However, non-GAAP financial information is presented for
supplemental informational purposes only, has limitations as an
analytical tool and should not be considered in isolation or as a
substitute for financial information presented in accordance with
GAAP. In addition, other companies, including companies in our
industry, may calculate similarly-titled non-GAAP financial
measures differently or may use other measures to evaluate their
performance, all of which could reduce the usefulness of Adjusted
EBITDA as a tool for comparison. A reconciliation is provided below
for Adjusted EBITDA to the most directly comparable financial
measure stated in accordance with GAAP. Investors are encouraged to
review the related GAAP financial measure and the reconciliation of
this non-GAAP financial measure to its most directly comparable
GAAP financial measure, and not to rely on any single financial
measure to evaluate our business.
SELECTED CONSOLIDATED BALANCE
SHEETS
(In thousands,
Unaudited)
December 31,
2021
2020
ASSETS
Cash, cash equivalents and marketable
securities
$
28,397
$
72,142
Accounts receivable and grants
receivable
9,903
8,934
Inventories
13,406
5,122
Property and equipment, net
58,515
46,895
All other current and non-current
assets
36,080
30,750
Total assets
$
146,301
$
163,843
LIABILITIES, REDEEMABLE
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Accounts payable
$
10,066
$
8,322
Accrued expenses and other current
liabilities
13,670
7,320
Deferred income, current portion
32,351
624
Notes and convertible notes payable,
current portion
29,078
254
Deferred income, non-current portion
8,914
8,276
Notes payable, non-current portion
35,131
34,002
All other current and non-current
liabilities
23,478
26,029
Total liabilities
152,688
84,827
Noncontrolling interest
11,855
12,429
Redeemable convertible preferred stock
311,594
213,525
Total stockholders’ deficit
(329,836
)
(146,938
)
Total liabilities, noncontrolling
interest, redeemable convertible preferred stock and stockholders’
deficit
$
146,301
$
163,843
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands,
Unaudited)
Year Ended
December 31,
2021
2020
Revenue:
Product revenue, net
$
11,185
$
2,708
Licensing revenue
—
18,734
Total revenue, net
11,185
21,442
Operating expenses:
Costs of goods sold
9,983
2,414
Selling, general and administrative
71,041
28,870
Research and development,
12,867
16,115
Amortization of intangible assets
2,267
2,267
Total operating expenses
96,158
49,666
Loss from operations
(84,973
)
(28,224
)
Change in the fair value of convertible
promissory notes
(128
)
—
Change in the fair value of warrants
(7,646
)
(1,466
)
Change in fair value of tranche rights
liability
—
256
Interest expense, net
(1,364
)
(432
)
Other income, net
781
6,000
Loss before income taxes
(93,330
)
(23,866
)
Provision for income taxes
17
2,039
Net loss
(93,347
)
(25,905
)
Accretion of senior preferred stock to
redemption value
(94,134
)
(11,372
)
Accretion of noncontrolling interest put
option to redemption value
(376
)
(567
)
Net loss attributable to common
stockholders
$
(187,857
)
$
(37,844
)
Net loss per share attributable to common
stockholders—basic and diluted
$
(85.22
)
$
(17.61
)
Weighted average common shares
outstanding—basic and diluted
2,204,486
2,149,182
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands,
Unaudited)
Year ended
December 31,
2021
2020
Cash flows from operating
activities:
Net loss
$
(93,347
)
$
(25,905
)
Adjustments to reconcile net loss to net
cash used in operating activities:
.
Amortization of intangible assets
2,267
2,267
Reduction in carrying amount of
right-of-use assets
449
375
Depreciation
1,524
512
Stock-based compensation
5,532
4,808
Unrealized loss on foreign currency
transactions
(37
)
(589
)
Noncash interest expense
173
—
Accretion on marketable securities
(1
)
(6
)
Amortization/accretion on long-term assets
and liabilities, net
—
(4
)
Change in the fair value of warrants
7,646
1,466
Change in the fair value of convertible
promissory notes
128
—
Change in fair value of One S.r.l. call
option
1,024
—
Gain on extinguishment of debt
—
(297
)
Gain on extinguishment of preferred stock
warrant
—
(157
)
Change in fair value of trance rights
liability
—
(256
)
Deferred tax expense on intangible
asset
—
1,810
Changes in operating assets and
liabilities:
Account receivables
70
(729
)
Grants receivable
(1,723
)
(6,779
)
Prepaid expenses and other current
assets
(8,029
)
(3,281
)
Inventories
(8,645
)
(3,928
)
Other assets
107
(3,583
)
Accounts payable
2,604
4,085
Accrued expenses and other current
liabilities
8,709
151
Operating lease liabilities
(440
)
(358
)
Deferred income
33,140
8,242
Other long-term liabilities
(6,442
)
165
Net cash used in operating activities
(55,291
)
(21,991
)
Cash flows from investing
activities:
Purchases of property and equipment
(19,917
)
(32,212
)
Maturities (purchases) of marketable
securities
24,000
(23,993
)
Net cash provided by (used) in investing
activities
4,083
(56,205
)
Cash flows from financing
activities:
Principal repayment of notes payable
(302
)
(192
)
Proceeds from the exercise of warrants
10
—
Proceeds from the issuance of convertible
promissory notes
27,000
—
Proceeds from issuance of promissory notes
(net of issuance costs of $207 and $751, respectively)
5,679
28,939
Proceeds from issuance of redeemable
convertible preferred stock (net of issuance costs of $0 and $329,
respectively)
—
48,815
Proceeds from exercise of share-based
awards
146
12
Proceeds from issuance of noncontrolling
interest
—
11,349
Net cash provided by financing
activities
32,533
88,923
Effect of exchange rates on cash
(1,072
)
1,643
Net decrease (increase) in cash
(19,747
)
12,370
Cash and cash equivalents at beginning of
year
48,144
35,774
Cash and cash equivalents at end of
year
$
28,397
$
48,144
Noncash investing and financing
activities:
Purchases of property and equipment
included in accounts payable and accrued expense
$
1,712
$
1,818
Deferred financing costs included in
accounts payable and accrued expense
$
773
$
—
Supplemental cash flow
information:
Lease liabilities arising from obtaining
right-of-use assets
$
305
$
—
Interest paid on notes payable
$
1,578
$
274
Net Loss to Adjusted EBITDA
Reconciliation
(In thousands,
Unaudited)
Year Ended December
31,
2021
2020
Adjusted EBITDA
Net loss
$
(93,347
)
$
(25,905
)
Provision for (benefit from) income
taxes
17
2,039
Amortization and depreciation
3,791
2,779
Stock based compensation expense
5,532
4,808
Change in fair value of warrants
7,646
1,466
Change in fair value of convertible
promissory notes
128
—
Change in fair value of tranche rights
liability
—
(256
)
Change in fair value of One S.r.l. call
option
1,024
—
Interest expense, net
1,364
432
Adjusted EBITDA
$
(73,845
)
$
(14,637
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220324005636/en/
Media Relations Katie
Sullivan ksullivan@gelesis.com
Investor Relations Lynne
Collier, ICR lynne.collier@icrinc.com
Gelesis (NYSE:GLS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Gelesis (NYSE:GLS)
Historical Stock Chart
From Apr 2023 to Apr 2024