Formation Bio, a tech-driven and AI-native pharma company, announced today that it has raised $372MM of Series D financing. The financing was led by a16z with significant participation from Sanofi. Current investors also joined the round, including Sequoia, Thrive, Emerson Collective, and Lachy Groom, along with new investors, such as SV Angel Growth and FPV Ventures. This 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.
“We are thrilled to partner with the Formation Bio team on their journey to build an AI-enabled pharma company,” said Scott Kupor, Managing Partner at a16z. “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.”
Formation Bio is differentiated by its tech and AI enabled approach that drives more efficient drug development. 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. Recognizing that this development bottleneck limits the number of new medicines that can reach patients, Formation Bio (launched in 2016 as TrialSpark) has built technology platforms, processes, and capabilities to accelerate all aspects of drug development and clinical trials. 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 plans to allocate the new capital towards two primary objectives: acquiring and in-licensing candidate drugs and expanding their AI capabilities.
Acquiring and in-licensing drug assets
Formation Bio plans to deploy this new capital to continue acquiring and in-licensing clinical stage assets from biotech and pharma partners.
By partnering 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, leveraging 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.
Applying AI and technology to drug development
Today, the biggest bottleneck of enabling more drugs to reach patients is the cost and time of drug development and clinical trials. Since its founding, Formation Bio has focused on building the technology, operations, and processes to streamline all aspects of drug development.
Through 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.
Because of their tech, data, and operational foundations, Formation Bio has been able to rapidly integrate LLMs, AI models, and applications throughout its platform. 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, 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.
Formation Bio’s plans for AI innovation span short, medium, and long term horizons. In the short term, the company is focusing on workflow automation. Two examples include: AI-generated patient recruitment content tailored to specific cohorts and AI-generated adverse event reports that are 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 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 Bio announced a new collaboration with OpenAI and Sanofi to jointly design and develop customized AI solutions for drug development, which is a first-of-its-kind 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.”
Operating at the intersection of tech and pharma
As a tech and AI-enabled pharma company, Formation Bio has focused on building a team and culture that leverages expertise across pharma, AI, and technology.
“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,” said Alfred Lin, Partner at Sequoia. “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.”
Formation Bio’s team comes from across the tech and pharma industries, reflecting broad conviction in the company’s mission and business model. Similarly, the company’s investors represent both pharma and tech profiles, as reflected in the two new leading investors in this funding round: a16z and Sanofi. They are joined by a selective group of investors who have been part of enduring companies that have fundamentally transformed industries with technology.
“Thanks to A.I, biotech and pharmaceutical companies are about to be drowned in an avalanche of promising looking drugs that merit enquiry,” said Michael Moritz, Sr. Advisor to Sequoia Heritage. “Formation Bio has the technology and know-how to help the industry sort the wheat from the chaff.”
By addressing the drug development bottleneck, Formation Bio can enable the industry to advance more drugs than it currently can, ultimately enabling more new medicines to reach patients.
