AI-driven drug developer Formation Bio has raised $372M in a Series D financing led by a16z, with significant participation from Sanofi. Current investors also joined the round. The company plans to use the new funds to expand its AI capabilities and in-license more candidate drugs.
Its business model is to use AI and other expertise to streamline and accelerate drug development of acquired and partnered drug candidates. The company currently has three drugs in its pipeline, in Phase II and III.
“Thanks to AI, biotech and pharmaceutical companies are about to be drowned in an avalanche of promising looking drugs that merit enquiry,” said Michael Moritz, senior advisor to Sequoia Heritage, which participated in the financing. “Formation Bio has the technology and know-how to help the industry sort the wheat from the chaff.”
Drug development and clinical trials are the biggest bottleneck in getting drugs to market. Formation says the advantage of its model is: “Smaller biotechs can advance more than just their lead asset, creating a pathway for other drugs in their pipeline. For large pharma companies, Formation Bio creates an “off balance sheet” pathway for development, enabling a company to take more shots on goal in a P&L efficient way.”
The company was launched in 2016 as TrialSpark and has built technology platforms, processes, and capabilities aimed to accelerate all aspects of drug development and clinical trials. It partners, acquires, or in-licenses drugs from biotechs and pharma companies and develops those programs past clinical proof of concept and beyond.
Formation Bio says that through its “tech-enabled operational model” it has been able to run clinical trials significantly faster and more efficiently than industry benchmarks by streamlining activities such as study startup, participant recruitment, data management, database lock, and study close out.
The company says it is working toward “a future state where fine-tuned and customized LLMs, coupled with expert human oversight and reinforcement, can automate many of the core drug development functions. Some examples include: medical writing, protocol development, biostatistics, report generation, regulatory intelligence and much more.”
In the short term, Formation is focusing on workflow automation. Two examples include: AI-generated patient recruitment content tailored to specific cohorts and AI-generated adverse event reports that can be created in minutes rather than hours. In the medium term, their focus is on training AI for augmented decision making within drug development. The company is also building an “AI R&D Scientist” that can provide drug development teams with decision support and eventually steer high quality R&D decisions. And, in the long term, the company’s goal is to build and train AI models that can better predict toxicity, tolerability, and one day, efficacy.
Last month, Formation announced a new collaboration with OpenAI and Sanofi to jointly design and develop customized AI solutions for drug development—a novel collaboration within the pharma and life sciences industries.
“At Sanofi, we’re all in on AI,” said Paul Hudson, CEO at Sanofi. “And we are proud to partner with and invest in Formation Bio, whose AI-driven drug development vision and capabilities will help lead our industry forward in the shared ambition to accelerate and improve how we bring more new medicines to patients.”
