Gelesis Holdings Inc.

Client Profile

Established in 2006, Gelesis Holdings Inc. and certain affiliates, Gelesis, Inc. and Gelesis LLC, (collectively, “Gelesis” or the “Company”) was a biotherapeutics company focused on developing a novel category of treatments for weight management and GI-related chronic diseases. The Company’s flagship product, Plenity, is an orally administered, non-stimulant, non-systemic weight management aid. Inspired by the compositional and mechanical properties of raw vegetables, Plenity’s superabsorbent hydrogel technology acts locally in the digestive system, allowing consumers to feel satisfied from smaller portions of food.

Situation

Plenity was approved by the FDA for prescription use in 2019 and initially made available in the U.S. through a beta launch in 2020. Based on the significant demand from the beta launch, Gelesis orchestrated a full commercial launch of Plenity in January 2022. Immediately following the commercial launch, Gelesis experienced an exponential increase in web traffic and general interest and ultimately gained more than 200,000 Plenity customers.

The Company sought to raise additional capital, via a SPAC merger, to support the demand for Plenity. During the customary SEC review of the de-SPAC transaction, access to the capital markets for earlier-state companies deteriorated and investor redemptions resulted in the Company receiving net cash proceeds significantly below the anticipated funding amount. Due to the funding shortfall and subsequent failed attempts to raise additional capital, the Company was forced to restrict marketing efforts in mid-2022 and halt all marketing spend by the end of the year. Given the lack of funding to support operations, the Company filed for relief under Chapter 7 of the U.S. Bankruptcy Code in Q4 2023.

Solution

SSG was retained by George L. Miller, the Chapter 7 Trustee (“Trustee”) in January 2024 to conduct a comprehensive marketing process and solicit offers for substantially all of the Company’s assets, which included the Company’s intellectual property and a majority equity stake in a non-debtor manufacturing affiliate in Italy. This process resulted in several offers from potential stalking horse bidders (the “Stalking Horse”), with T-Investments S.r.l. and Andromeda Energy S.r.l. ultimately approved as the Stalking Horse in April 2024.

SSG subsequently commenced an extensive re-marketing effort that included outreach to a host of strategic and financial investors, both domestic and international. While the process garnered significant interest from numerous parties, no competing offers were received by the bid deadline and the sale to the Stalking Horse closed in July 2024. Given the sale of equity in a foreign entity, the closing required approvals from the lenders and minority equity holders of the Italian affiliate as well as the Italian government.  SSG’s ability to generate interest from buyers in an efficient process, navigate complex ownership structures and effectively market international assets, combined with extensive experience representing companies in both Chapter 11 and Chapter 7 proceedings enabled the Trustee to maximize the value of the assets for the benefit of the estates.