Star Therapeutics Raises $200 Million Following Vega Sale and Electra IPO

US-based biologics company Star Therapeutics announced it has raised $200 million in a private funding round co-led by OrbiMed and Janus Henderson, following successes with two of its spinout companies.

CEO Adam Rosenthal said the company will return to "stealth mode" to study an undisclosed number of experimental biologics for the treatment of blood and immunological diseases. He added that the funding represents a "reset" for the company, which was founded eight years ago.

RA Capital Management and Sofinnova Investments also participated in the round alongside other investors. Star had previously sold its subsidiary Vega Therapeutics to Incyte Pharma in a deal valued at up to $2 billion, while Electra Therapeutics raised $350 million in an initial public offering in September.

Rosenthal said Star is looking for new molecules that are "difficult to replicate or copy elsewhere" rather than developing similar drugs that slightly outperform approved treatments. He explained that the company preferred to sell Vega because Incyte has greater capabilities and resources in clinical development and commercialization.

What do these terms mean?

Biologics: Drugs made from living organisms or their components, such as antibodies and proteins, which differ from conventional chemical drugs.

Spinout: A new company separated from a parent company to develop a specific asset, product, or technology, and may raise its own funding or go public.

Initial Public Offering (IPO): The first sale of a company's stock to the public on a stock exchange, typically used to raise capital for expansion.