United States securities and exchange commission logo
October 19, 2021
R. Steven Hicks
Chief Executive Officer
Capstar Special Purpose Acquisition Corp.
405 West 14th Street
Austin, TX 78701
Re: Capstar Special
Purpose Acquisition Corp.
Amendment No. 1 to
Registration Statement on Form S-4
Filed September 29,
2021
File No. 333-258693
Dear Mr. Hicks:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our
September, 2021 letter.
Amendment No. 1 to Registration Statement on Form S-4 filed September
29, 2021
Q: How will the Sponsor, directors and officers vote?, page 13
1. Please revise the Q&A
to identify each member of the Sponsor. Also clarify, where
appropriate, Mr.
Christopher's role(s) with CPSR since the IPO and his financial interests
in the Business
Combination. In this regard, we note that the disclosure on page 59
identifies Mr.
Christopher as a member of the Sponsor and indicates that he will be
entitled to an
allocation from the Sponsor of its Founders Shares and/or Private Placement
Warrants. We also note
that disclosure contained elsewhere in
this proxy/prospectus
identifies Mr. Christopher as a "special advisor" to CPSR and that
CPSR's IPO prospectus
indicates that he has no employment, consulting fee or other
similar compensation
arrangements with CPSR. Please revise the disclosure on page 112
R. Steven Hicks
FirstName LastNameR.
PurposeSteven HicksCorp.
Capstar Special Acquisition
Comapany
October 19,NameCapstar
2021 Special Purpose Acquisition Corp.
October
Page 2 19, 2021 Page 2
FirstName LastName
to include Mr. Christopher in the table and discuss his potential
conflicts of interests, or
advise.
Background to the Business Combination, page 97
2. We note your revised disclosures in response to prior comment 4.
Please revise the
Background section to identify Citigroup and UBS as lead underwriters
in CPSR's IPO.
Disclose, where appropriate, conflicts of interest stemming from
Citigroup and UBS
receiving deferred underwriting compensation from CPSR's IPO and
business
combination advisory fees from Gelesis and CPSR, respectively.
3. We note your revised disclosure in response to prior comment 7. Your
disclosure on page
99 indicates that the Gelesis' financial forecasts presented on page
110 were shared with
UBS on March 4, 2021. Please tell us, and revise as applicable, to
explain why the March
24 entry indicates that Gelesis 2023 estimated EBITDA was
approximately $100 million
given that the forecasts presented on page 110 indicate that the
estimated EDITDA figure
was $137 million. Please also confirm that any preliminary or revised
forecasts are
discussed in the Background section.
4. Please revise the March 30 entry to disclose how much lower UBS'
valuation range was
than Citigroup's March 24 range. Also, identify the comparable
companies that UBS
presented at this meeting. To the extent that the comparable companies
were different than
the ones presented on page 106, please revise to explain the reasons
for such differences.
Business Combination Proposal
Certain Unaudited Prospective Financial Information of Gelesis , page 108
5. Please address the following regarding your projections presented in
the table on page
110, revising your presentation as necessary:
You state that the key assumptions on page 110 for the general
business, economic,
regulatory, market and financial conditions and other future
events, as well as matters
specific to Gelesis business," are all difficult to predict and
many are beyond
Gelesis and CPSR s control. Please provide an analysis of how
Gelesis developed
these assumptions and determined them to be reasonable.
We note the disclosure on page 109 indicating that that Gelesis
management
believed the forecasts to be reasonable. Please revise to indicate
whether CPSR
management similarly believed each of the key financial metrics to
be reasonable, or,
if not, to explain how its assessment differed.
Include a description and quantification of alternative forecasts
or alternative
scenarios that you considered and your basis for their rejection.
As part of your
response, how you selected from multiple scenarios or weighted
various scenarios.
In particular, regarding your forecast for net product revenue,
provide the underlying
assumptions for the number of members, units sold and average
selling price per unit
(net), consistent with your presentation on page 196 for each year
through 2023.
Regarding your forecast for gross margin, describe and quantify
the factors
R. Steven Hicks
Capstar Special Purpose Acquisition Corp.
October 19, 2021
Page 3
underlying the increases in gross margin percentage from 23% for
2021 to 56% for
2022 to 63% for 2023, including changes in pricing and product
mix.
In this regard, explain why you expect gross margin to be 23%
for 2021, when it was
only 9% for the six months ended June 30, 2021.
Tell us how your forecast for 2021 compares to your preliminary
results for the nine
months ended September 30, 2021, providing quantification of
those preliminary
results in your response.
Information About Gelesis, page 165
6. We note your response and revisions to our prior comment 16. We note
your statement on
page 179 that you are optimistic that if the six month study has
positive results, it will
support FDA clearance for these specific populations. Please revise to
disclose the clinical
endpoints used in the study and/or clarify the results that you
believe would support FDA
clearance. Clarify whether these results are specified in the FDA
response that you
reference.
7. We note your response to our prior comment 14. In the Government
Regulation section
(pages 185 to 189), please revise to discuss briefly state regulation
of telehealth. With
reference to your response, please disclose that there are currently
no jurisdictions where
state medical boards have established rules or interpreted existing
rules in a manner that
limit or restrict the ability of Gelesis qualified distributors to
use telehealth services in
connection with providing patients with access to Plenity.
Beta Launch, page 169
8. We refer to the final sentence of prior comment 15. Please disclose
the grant rate for
patients with a BMI under and above the indicated BMI range, or
advise.
Sales and Marketing, page 183
9. We note your revised disclosure on page 205 in response to prior comment
13. Given the
magnitude of the planned twelve-month sales and marketing expenditures
included on
page 205, please revise page 183 to discuss Gelesis' sales and marketing
of Plenity in
greater detail. Without limitation, please discuss Roman Health
Pharmacy's role in
marketing the drug. In this regard the disclosure on page 212 appears to
indicate that Roman Health Pharmacy will be responsible for marketing
the drug within
the US telehealth channel. Discuss who will bear the cost of these sales
and marketing
FirstName LastNameR. Steven Hicks
efforts. Also clarify whether Gelesis' planned direct to consumer
marketing strategy and
Comapany NameCapstar
media expendituresSpecial Purpose
for Plenity willAcquisition Corp.
result in costs and margins similar
to that of a typical
prescription pharmaceutical
October 19, 2021 Page 3 drug.
FirstName LastName
R. Steven Hicks
FirstName LastNameR.
PurposeSteven HicksCorp.
Capstar Special Acquisition
Comapany
October 19,NameCapstar
2021 Special Purpose Acquisition Corp.
October
Page 4 19, 2021 Page 4
FirstName LastName
You may contact Franklin Wyman at 202-551-3660 or Kevin Vaughn at
202-551-3494 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Jordan Nimitz at 202-551-6001 or Joe McCann at 202-551-6262 with any
other
questions.
Sincerely,
Division of
Corporation Finance
Office of Life
Sciences
cc: Christopher S. Auguste, Esq.