Setara launches with $90M to run the Actio programmes Jazz didn't keep

Setara Biosciences has launched with a $90 million Series A, taking over the parts of Actio Biosciences' pipeline that Jazz Pharmaceuticals did not keep when it bought Actio earlier this year. The San Diego company announced the round on 30 October. Deerfield Management, Canaan, Droia Ventures, EcoR1, Euclidean Capital and Regeneron Ventures are back as investors, and Jazz has joined as part of its Actio deal.

How the spinout works

Jazz bought Actio mainly for ABS-1230, a programme in KCNT1-related epilepsy. BioSpace reports the deal was worth up to $1.3 billion, including $820 million upfront, and that Jazz said at the time it would put the remaining assets into a new company and keep a stake. Setara is that company. ABS-1230 stays with Jazz.

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The pipeline

The lead asset is STAR-0871 (previously ABS-0871), an oral small-molecule TRPV4 inhibitor. It has finished the healthy-volunteer part of a Phase 1 study. Next up is THERON, a Phase 1b trial in Charcot-Marie-Tooth disease type 2C (CMT2C) planned for 2027, with a Phase 2a study in overactive bladder also planned. The FDA has already given the drug Rare Pediatric Disease, Orphan Drug and Fast Track designations.

The pairing is deliberate. CMT2C affects roughly 2,500 people in the US; overactive bladder affects tens of millions. Setara calls this a "one to many" approach: start in a rare disease where human genetics makes the biology clear, then carry what is learned into larger indications. Earlier-stage programmes in genetic epilepsies and expansion indications such as migraine came across too.

Who's behind it

Co-founder David Goldstein, who founded Actio, is president and executive chair. He also stays at Jazz at least until the FDA accepts the NDA submission for ABS-1230. Co-founder David Breckenridge is chief scientific officer, Pete Condon is chief business officer and Cayce Denton is chief financial officer. The board includes Emil Kakkis of Ultragenyx, Ben Cravatt of Scripps Research and Actio co-founder John McHutchison, alongside investor directors from Deerfield, Canaan, Droia, EcoR1 and Jazz.

"With Setara, we have the opportunity to build on a model that has already demonstrated its potential" David Goldstein, co-founder, president and executive chair, Setara Biosciences

The bigger picture

This is the second week running that a sizeable early-stage round has gone to a team that has already built and sold a company. Last week it was Star Therapeutics' $200M raise. The Actio-to-Setara structure is a neat version of the same idea: the buyer takes the lead asset, and the founders get a second go with the rest of the pipeline, several of the leadership team and investors who already know them.

What it means for hiring

A spinout like this starts with a leadership team but not necessarily a full operating team. With a Phase 1b and a Phase 2a planned, we'd expect clinical operations, regulatory and CMC leadership to be early priorities.
Running a rare disease study and a large-indication study side by side calls for different skills: patient-finding and advocacy work on one side, scale and site management on the other. People who have done both are rare.
Experienced operators coming out of acquisitions are a talent pool worth watching. Founder-led spinouts tend to recruit people they have worked with before, so being in that network early matters.

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