PureTech's heavyweight contender Gelesis swings for a $60M IPO

With its stomach-filling particles now in a pivotal study in Europe for obesity, Boston-based Gelesis has thrown its hat into the crowded biotech IPO ring, looking to raise $60 million from an investment community that has yet to lose its appetite for biotech stocks.

Spawned by PureTech and encouraged by some high-profile scientific godfathers, including MIT's Robert Langer, Gelesis raised a $22 million mezzanine round about a week ago. That money is being used for a 6-month trial that will be used to go after a European CE Mark for an oral therapy designed to give people a feeling of being satiated without all the calories.

The biotech--a 2010 Fierce 15 winner--is still in discussions with the FDA on what it will need to do to satisfy U.S. regulators, but the S-1 lays out an approval path that may take four more years to accomplish.

Gelesis100 comes in a capsule containing thousands of tiny hydrogel particles which expand in the stomach and small intestine after people drink a couple of glasses of water.

But the biotech had a problem with its most recent study, which was completed last summer. The study tested Gelesis100 at a 2.25 g dose, a 3.75 g dose and a placebo. That low dose scored a placebo adjusted weight loss of only 2% of body weight (6.1% total), while the high dose registered a minimal 0.4% placebo-adjusted improvement on the scales.

At the time, the biotech boasted that the results clearly demonstrated the weight therapy's market potential, though Daniel H. Bessesen, an endocrinologist at the University of Colorado, told The New York Times that the end result was "very modest. It doesn't look like a game changer."

In its S-1 filing with the SEC, Gelesis goes to some lengths to explain the minimal response to the 3.75-g dose, saying that a higher rate of gastrointestinal issues triggered a string of dropouts while the overall effect may have been blunted by the fact that participants didn't drink enough water to gain the full effect needed for it to control appetites. The company went on to note that significant groups of patients in the study lost more than 5% as well as 10% of their body weight. And investigators believe that the response will rise with a longer trial time.

Gelesis set a low bar for itself in the GLOW study, which started last November. The co-primary endpoints for the GLOW study are "placebo-adjusted weight loss (of at least) 3% and weight loss of at least 5% in (at least) 35% of patients on Gelesis100, regardless of placebo results." According to the S-1, the FDA has indicated in meetings that those endpoints would "at a minimum" be needed to satisfy regulators. The plan now is to push ahead on a CE Mark for use in Europe, with the study providing data in the first half of next year.

Gelesis is still in talks with the FDA, but says it expects "to initiate the FDA pivotal trial in the second half of 2016 and submit data to the FDA in the first half of 2018, which would allow us to potentially launch Gelesis100 in the United States in first half of 2019."

Gelesis CEO Yishai Zohar

If it does make it to the market in the U.S., which clearly represents its biggest market potential, Gelesis would be up against a slate of biotechs which have faced an uphill struggle selling new drugs to overweight patients. But Gelesis believes that by avoiding the brain and sticking with the stomach Gelesis100 can succeed where others have failed.

Gelesis Chairman John LaMattina--the one-time R&D chief at Pfizer, blogger and PureTech partner--holds 30% of the company's shares. And PureTech itself is down for 28.5% of the shares. CEO Yishai Zohar, whose wife Daphne Zohar runs PureTech, has 5.2% of the company's stock.

- here's the S-1

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