AI-powered pharma startup Formation Bio just scored a massive $372 million in Series D funding, led by Andreessen Horowitz (a16z) with Sanofi jumping in as a major backer. The cash infusion rockets the company's valuation well past its previous $1 billion mark.
Founded in 2016 by Benjamine Liu and Linhao Zhang, Formation Bio isn't your typical drug discovery outfit. Instead, they're tackling a bigger problem: the painfully slow and expensive process of drug development. While AI has sped up finding new drugs, getting them through trials and to market still takes ages and costs billions.
"We're pumped to team up with Formation Bio as they build an AI-powered pharma powerhouse," said Scott Kupor, Managing Partner at a16z. "Pharma is a massive industry, and there's huge potential to make drug development way more efficient."
Rather than focusing solely on drug discovery, the company acquires or in-licenses clinical-stage drugs from pharmaceutical and biotech companies. It then applies its AI-driven platform to accelerate these drugs through clinical trials and development, potentially shaving years off the traditional timeline.
The company's AI capabilities extend beyond mere workflow automation. Formation Bio is developing an "AI R&D Scientist" that can provide drug development teams with decision support and eventually steer high-quality R&D decisions. Long-term goals include building AI models that can better predict drug toxicity, tolerability, and efficacy.
Sanofi's CEO Paul Hudson is all in on the AI revolution: "We're betting big on AI at Sanofi. We're proud to back Formation Bio – their AI-driven approach could help us bring new medicines to patients faster and better than ever before."
The company plans to use the new capital to expand its drug acquisition and in-licensing efforts, as well as to further develop its AI capabilities. They already have three drug candidates in its clinical pipeline, including treatments for chronic hand eczema, sensory neuropathy, and knee osteoarthritis.
This funding news comes hot on the heels of Formation Bio's team-up with OpenAI and Sanofi last month. They're working together to build custom AI tools specifically for drug development, pushing the pharma industry into the future.
Formation Bio isn't alone in the AI-powered drug development race. Several startups are vying for a piece of this potentially massive market. EvolutionaryScale (backed by Amazon and NVIDIA), and others such as Isomorphic (Deepmind spinoff), Xaira, Insilico, Profluent, Enveda, and Causaly, are also pioneering AI-driven approaches to drug discovery and development. It's a crowded field, but in an industry that's desperate for innovation but often moves at a snail's pace, execution is all that matters.