Austin entrepreneur Clayton Christopher made his name in the beverage business with brands like Sweet Leaf Tea, Deep Eddy Vodka, and Waterloo Sparkling Water. Now, he’s wading into a new industry: weight loss.
Capstar Special Purpose Acquisition Corp., an Austin-based “blank check” company co-founded last year by Christopher, said July 19 that it’s merging with Boston-based biotech company Gelesis. Businesses like Capstar are known as special purposed acquisition corporations, or SPACs.
In 2019, Gelesis gained approval from the U.S. Food and Drug Administration to sell prescription hydrogel Plenity capsules, aimed at helping overweight or obese people shed pounds. Made of two natural ingredients, the patented drug makes people feel full before meals, encouraging them to eat less.
Gelesis represents a new type of venture for Christopher. He burst onto the Austin business scene with Sweet Leaf Tea, which he co-founded in 1998. Nestlé Waters North America bought Sweet Leaf in 2011; six years later, Nestlé sold the brand to Dunn’s River Brands, now owned by Purity Organic. A year before selling Sweet Leaf, Christopher co-founded Deep Eddy Vodka, which Heaven Hill Brands purchased in 2016. The following year, he co-founded Waterloo Sparkling Water, which a private investment group scooped up in 2020.
In 2019, Christopher stepped down as managing partner of Austin-based private investment firm Cavu Venture Partners.
During a July 19 conference call, Christopher said he believes Plenity holds the promise of “being the next great disruptor” in weight management. The value of the U.S. weight-loss industry reached a record-high $78 million in 2019, according to Marketdata. Last year, the U.S. market for prescription weight-loss drugs totaled nearly $600 million.
Plenity has been available on a limited basis since last October, with more than 45,000 people currently taking it. A 28-day supply of the capsules sells for $98. The full-scale launch of Plenity is set for later this year. The company believes more than 150 million U.S. adults could qualify for Plenity prescriptions.
Capstar Special Purpose Acquisition’s stock began trading last year on the New York Stock Exchange. Capstar, essentially a shell company with no business operations, went public with the intent of merging with a business in the consumer goods, healthcare, or technology, media, and telecom sector. Under the proposed merger, valued at $1.3 billion, Gelesis will become a public company on the New York Stock Exchange.
Gelesis predicts annual revenue will reach $442 million by the end of 2023.
Steve Hicks of Austin, who amassed his wealth as an executive in the radio industry, is chairman, CEO, and chief financial officer of Capstar Special Purpose Acquisition. He also is executive chairman of Austin-based private investment firm Capstar Partners and sits on the University of Texas System’s Board of Regents.
CEO Yishai Zohar founded Gelesis in 2006. Partners of Gelesis include weight-loss companies Noom and WW (formerly Weight Watchers).
“Yishai and the Gelesis team have developed a tremendous solution that is poised to transform the weight management industry,” Hicks says in a news release. “We raised our Capstar SPAC last year with the goal of finding a high-growth, disruptive business that is helping people live a better, healthier life. Gelesis fits that criteria perfectly, and we are elated to partner with them as they start their exciting next leg of growth.”