37. Formation Bio

Founders: Benjamine Liu (CEO), Linhao Zhang
Launched: 2016
Headquarters: New York City
Funding: $600 million
Valuation: $1.7 billion (PitchBook)
Key Technologies: Artificial intelligence, deep neural networks/deep learning, explainable AI, generative AI, machine learning
Industry: Biotech
Previous appearances on Disruptor 50 list: 0

AI-powered pharmaceutical company Formation Bio is built on the premise that traditional pharma is inefficient. The company, formerly known as TrialSpark, seeks to redesign key parts of the business model used to bring drugs to market — discovering drugs with viable market opportunities, R&D strategy and clinical trials — using automation and other generative AI tools.

Traditionally, this process has taken years and billions of dollars. Formation's theory is that with the help of today's technology, it can be done at a fraction of the cost and time. 

Part of Formation's business model is acquiring stalled drugs from companies at low prices, further developing them using its AI model, and reselling them back to pharmaceutical partners after the drug has published results from Phase 2 or 3 trials.

In November 2024, Formation launched AI-powered tool Muse in partnership with fellow Disruptor OpenAI and Sanofi. Aimed at identifying and accelerating the development of de-risked drug assets, the company claims to leverage deep learning, predictive modeling, and real-world clinical data to streamline candidate selection and protocol design.

"At scale, this AI-driven development approach can accelerate the delivery of new medicines and reshape healthcare worldwide," Formation Bio Co-Founder & CEO Ben Liu said in a release announcing Muse's launch. "Muse is just the start — one of the many AI innovations we're building for drug development."

Sanofi will first use Muse for phase 3 drug trials for people with multiple sclerosis (MS), and there are plans to expand its use further. Generative AI can not only map proteins but generate new proteins, Sanofi executive vice president and chief digital officer Emmanuel Frenehard told CNBC.

"It's all about ensuring that we get to market faster with our drugs," Frenehard said. "There's plenty of unmet patient needs and we think that generative AI and Formation Bio, an AI-tech driven company, the two of them – including Sanofi – can accelerate that."

The momentum continued with the company's Series D fundraising round led by a16z, where it secured over $372 million from Sanofi and Thrive Capital, among others. This positioned Formation as a serious player in the emerging AI pharma industry, alongside companies like Recursion and Insitro. The funding was used to expand its internal pipeline and double down on platform development.

The company also made key hires from Moderna, Google DeepMind, and Pfizer. This includes former Pfizer research and development chief scientific officer Mikael Dolsten, who joined in April as a strategic advisor. He will be the chair of the company's drug picking committee, as well as co-chair of the investment advisory committee and chair of science, technology, and product planning committee.

Company leaders and advisors to Formation Bio have collectively worked on at least 45 approved drugs.

Formation's AI methods are not sold as a service, but only used to advance the drugs it has invested in. It has yet to submit a drug to regulatory authorities for approval. Currently, it has three drug candidates far in the clinical pipeline, which are targeted towards chronic hand eczema, atopic dermatitis/notalgia paresthetica and knee osteoarthritis. The eczema treatment has reached phase 3, the last stage of testing before regulatory approval.