Formation raises $372M Series D for AI-driven drug licensing, backed by Sanofi

Formation Bio announced a significant milestone with the successful closure of a $372 million Series D funding round. This achievement stands out in 2024, a year characterized by scarce megafunding rounds. The biotechnology company, which focuses on integrating artificial intelligence (AI) into its operations, aims to use this capital influx to expand its drug development pipeline.

Formation Bio's primary strategy involves collaborating with biotech firms to enhance workflow automation. This includes generating customized patient recruitment content for clinical trials and quickly producing AI-generated adverse event reports. The company's vision extends beyond immediate improvements, as it plans to develop an "AI R&D Scientist" capable of assisting drug development teams with decision-making and eventually guiding high-quality research and development decisions. In the long term, Formation Bio aspires to create and train AI models that can predict toxicity, tolerability, and potentially efficacy, transforming the drug development landscape.

The Series D funding was spearheaded by a16z, with substantial contributions from existing partner Sanofi. Sanofi has been actively involved in various AI-focused collaborations with companies like Owkin and Exscientia. Formation Bio intends to utilize this new capital to acquire and in-license clinical-stage assets from its biotech and pharmaceutical partners.

Previously known as TrialSpark, Formation Bio currently boasts a robust clinical pipeline with three candidates. These include gusacitinib, a SYK/JAK inhibitor in phase 3 development for chronic hand eczema; ASN008, a sodium channel blocker in phase 2 trials for notalgia paresthetica and itch related to atopic dermatitis; and sprifermin, an FGF18 drug in phase 2 for knee osteoarthritis. Gusacitinib and ASN008 were acquired from Asana BioSciences in 2022, while sprifermin was licensed from Merck KGaA.

Formation Bio's collaborations offer significant benefits to both small biotech companies and large pharmaceutical firms. Smaller biotech companies can advance multiple drugs in their pipelines, not just their lead assets, by partnering with Formation Bio. For large pharmaceutical companies, Formation Bio provides an "off balance sheet" development pathway, enabling them to pursue more drug development opportunities efficiently.

Sanofi, which recently announced a drug development partnership with Formation Bio and OpenAI, sees great potential in these collaborations. CEO Paul Hudson emphasized Sanofi's commitment to AI-driven drug development, stating, "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."

By leveraging AI technology and strategic partnerships, Formation Bio aims to revolutionize the drug development process, making it more efficient and effective. The substantial Series D funding will enable the company to continue its innovative work, advancing its mission to improve patient outcomes through cutting-edge AI applications in biotechnology.