Formation Bio, a startup applying AI to drug development backed by OpenAI CEO Sam Altman, has raised over 1 / 4 of a billion dollars to support its ambitious product roadmap.
formation announced On Wednesday, Formation announced that it had raised $372 million in a Series D funding round led by Andreessen Horowitz. Pharmaceutical giant Sanofi, Sequoia, Thrive, Emerson Collective, Lachy Groom, SV Angel Growth and FPV Ventures also participated. With the brand new tranche, Formation has raised a complete of greater than $600 million (after to PitchBook), which the corporate says is used primarily for partnership acquisition and R&D.
formation declined to reveal its recent valuation, but a spokesperson told TechCrunch that it was a “significant increase” from $1 billion, Formation's Series C valuation.
The company, previously branded as 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 Oxford and UPenn. Zhang is a software developer by occupation and worked at Salesforce before joining Oscar Insurance as a product engineer.
Formation develops cutting-edge solutions for clinical trials and drug development. The company licenses drug IP from biotech and pharmaceutical corporations and collaborates with them to develop drugs and advances those drugs beyond clinical proof of concept.
Drug development is notoriously an expensive and demanding undertaking. It takes 10 to fifteen years, Average to bring a drug from initial discovery to regulatory approval, with the fee per drug to achieve as much as 5.5 billion dollars. And a estimated 90% of medicines don’t make it to market.
Formation claims it may run clinical trials more efficiently by streamlining processes resembling study entry, participant recruitment and data management. For example, the corporate is currently using AI to create patient recruitment materials and “antagonistic event” reports. It can be optimizing AI models to offer drug development teams with recommendations for R&D decisions and to raised predict drug toxicity, tolerability and efficacy.
Last month, Formation announced a collaboration with OpenAI and Sanofi to jointly design and develop customized AI solutions for drug development. OpenAI said it should provide access to AI capabilities and expertise, and Sanofi said it should contribute proprietary data for AI model development.
OpenAI's involvement creates the looks of a conflict of interest, as Altman was involved in Formation's Round C funding. OpenAI PR told TechCrunch that the deal was led by OpenAI COO Brad Lightcap and OpenAI's board, but didn’t specify whether Altman, who sits on the board, recuse himself from the choice.
“At Sanofi, we’re fully committed to AI,” said Sanofi CEO Paul Hudson in a press release. “And we’re proud to partner with and spend money on Formation Bio. Their vision and capabilities in AI-driven drug development will help advance our industry and move closer to the shared goal of bringing more recent medicines to patients, faster and higher.”
Formation has three drug candidates in its clinical pipeline, including treatments for chronic hand eczema, sensory neuropathy and knee osteoarthritis. The most advanced is the eczema treatment, which recently reached Phase 3 – the ultimate phase of testing before a drug is submitted to regulatory authorities.
A lot of startups are attempting to develop AI-powered technologies for drug development, including EvolutionaryScale, which emerged from obscurity this week with investments from Amazon and Nvidia. Research firm Markets and Markets anticipated that the AI in drug discovery market can be price $4.9 billion by 2028. Major players on this space include Xaira (which launched with $1 billion in seed capital), DeepMind spin-off Isomorphic, Insilico, Jeff Dean-backed Profluent, Enveda, and Causaly.
