Formation Bio, a startup backed by OpenAI CEO Sam Altman and focused on applying AI to drug discovery, has raised more than $250 million to support its ambitious product roadmap.
Formation today announced it has raised $372 million in a Series D funding round led by Andreessen Horowitz, with participation from pharmaceutical companies Sanofi, Sequoia, Thrive, Emerson Collective, Lachy Groom, SV Angel Growth and FPV Ventures. The new funding brings Formation's total funding to $528 million, which the company says it will use primarily for partnership efforts and research and development.
Formation declined to disclose the new valuation, but a spokesperson told TechCrunch that it's a “significant increase” from Formation's Series C valuation of $1 billion.
Formation, formerly known under the brand name TrialSpark, was co-founded in 2016 by Benjamine Liu and Linhao Zhang. Liu has a background in computational biology and has conducted neuroscience research at the University of Oxford and the University of Pennsylvania. Zhang is a software developer who worked at Salesforce before joining Oscar Insurance as a product engineer.
Formation builds technology-advanced solutions for clinical trials and drug development. The company licenses drug IP from biotech and pharmaceutical companies, co-develops drugs, and develops these drugs through clinical proof of concept.
Drug development is notoriously expensive and difficult: it takes an average of 10-15 years from drug discovery to regulatory approval, costs up to $5.5 billion per drug, and it's estimated that 90% of drugs never reach the market.
Formation claims it can help run clinical trials more efficiently by streamlining processes like study initiation, participant recruitment, and data management. For example, the company is now deploying AI to generate patient recruitment materials and “adverse event” reports. It is also fine-tuning its AI models to provide drug development teams with recommendations on R&D decisions and to better predict drug toxicity, tolerability, and efficacy.
Last month, Formation announced a partnership with OpenAI and Sanofi to jointly design and develop customized AI solutions for drug development. OpenAI said it would provide access to its AI capabilities and expertise, while Sanofi said it would contribute its own data to the development of AI models.
OpenAI's involvement appears to be a conflict of interest given Altman's involvement in Formation's Series C funding. We have reached out to OpenAI for more information and will update this post if we hear back.
“Sanofi is fully committed to AI,” Sanofi CEO Paul Hudson said in a press release. “We are proud to partner with and invest in Formation Bio, whose AI-driven drug development vision and capabilities will help us lead the industry toward our shared goal of accelerating and improving the way we deliver more new medicines to patients.”
Formation has three candidates in its clinical pipeline, including treatments for chronic hand eczema, sensory neuropathy, and knee osteoarthritis. The furthest along is an eczema treatment that recently reached Phase 3, the final stage of testing before a drug can be submitted to regulatory authorities.
A number of startups, including EvolutionScale, which emerged from stealth this week with investments from both Amazon and Nvidia, are aiming to pioneer AI-based drug discovery technology. Market research firm Markets and Markets predicts that the market for AI in drug discovery will be worth $4.9 billion by 2028. Key players include Xaira (launched with $1 billion), DeepMind spinoff Isomorphic, Insilico, Jeff Dean-backed Profluent, Embeda and Causery.