AI-native pharma company Formation Bio announced that it has raised $372 million of Series D funding. This funding round was led by a16z, with significant participation from Sanofi. Current investors, including Sequoia, Thrive, Emerson Collective, and Lachy Groom, and new investors like SV Angel Growth and FPV Ventures, also joined the round.
This funding round reflects a material step up from the company’s Series C valuation. As part of the financing, Scott Kupor, Managing Partner at a16z, and Alfred Lin, Partner at Sequoia, will join Formation Bio’s Board of Directors alongside existing board director Michael Moritz, Sr. Advisor to Sequoia Heritage, and board observer Kareem Zaki, Partner at Thrive Capital.
Formation Bio differentiates itself by a tech and AI enabled approach that drives more efficient drug development. And the advancements in AI and drug discovery are creating more candidate drugs than the industry can progress because of the high cost and time of clinical trials.
Formation Bio launched in 2016 as TrialSpark and the company has has built technology platforms, processes, and capabilities to accelerate all aspects of drug development and clinical trials. And the company partners, acquires, or in-licenses drugs from biotechs and pharma companies and develops those programs past clinical proof of concept and beyond.
The company also plans to allocate the new capital towards two primary objectives: acquiring and in-licensing candidate drugs and expanding their AI capabilities.
Formation Bio plans on deploying this new capital to continue acquiring and in-licensing clinical stage assets from biotech and pharma partners.
By working with Formation Bio, 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.
Formation Bio creates win-win structures for its partners, utilizing a NewCo model for every asset which can facilitate shared ownership and outcomes while providing all the capital and capabilities needed to advance the assets through their next phases of clinical development.
As of now, the biggest bottleneck of enabling more drugs to reach patients is the cost and time of drug development and clinical trials. And since its founding, Formation Bio has focused on building the technology, operations, and processes to streamline all aspects of drug development. And with its tech-enabled operational model, Formation Bio 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.
Since their tech, data, and operational foundations, Formation Bio has been able to rapidly integrate LLMs, AI models, and applications throughout its platform. And while many drug development processes today are highly manual, time intensive, and costly, Formation Bio is working toward a future state where fine-tuned and customized LLMs, combined 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, etc.
Last month, Formation Bio announced a new collaboration with OpenAI and Sanofi for jointly designing and developing customized AI solutions for drug development – which is a first-of-its-kind collaboration within the pharma and life sciences industries.
KEY QUOTES:
“We are thrilled to partner with the Formation Bio team on their journey to build an AI-enabled pharma company. Pharma represents one of the biggest industries in the world, and there is immense potential to make the drug development process more efficient. We’ve been impressed by the team and culture that the co-founders, Ben and Linhao, have built, one that brings together the best of pharma, tech, and AI to ultimately make an enduring impact for patients.”
– Scott Kupor, Managing Partner at a16z
“At Sanofi, we’re all in on AI. 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.”
– Paul Hudson, CEO at Sanofi
“We are in the early stages of AI driving significant efficiencies in pharma and biotech, and Formation Bio is well-positioned to lead this transformation. Ben and his team bring a unique mix of tech, pharma, and AI expertise, along with a track record in licensing high-quality drugs and executing clinical trials. We are proud to partner with them as they push the industry forward.”
– Alfred Lin, Partner at Sequoia
“Thanks to A.I, biotech and pharmaceutical companies are about to be drowned in an avalanche of promising looking drugs that merit enquiry. Formation Bio has the technology and know-how to help the industry sort the wheat from the chaff.”
– Michael Moritz, Sr. Advisor to Sequoia Heritage
