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Two startups in the drug development market secured major investments

AI-driven biotech startups EvolutionaryScale and Formation Bio have raised $142 million and $372 million respectively, highlighting the growing interest and investment in AI-powered drug discovery and development, a market projected to reach $4.9 billion by 2028.

Ellie Ramirez-Camara profile image
by Ellie Ramirez-Camara
Two startups in the drug development market secured major investments
Photo by Christina Victoria Craft / Unsplash

EvolutionaryScale and Formation Bio recently completed significant funding rounds as a growing number of startups look to grab a piece of a market estimated to be worth $4.9 billion by 2028.

EvolutionaryScale emerged out of stealth with a $142 million seed funding round

EvolutionaryScale, a startup focusing on AI-powered protein generation for scientific research, emerged from stealth after securing $142 million in a seed round led by ex-GitHub CEO Nat Friedman, Daniel Gross and Lux Capital and with participation from Amazon and NVIDIA's venture arm. EvolutionaryScale's proprietary model ESM3, is trained on a dataset comprising 2.78 billion proteins and can generate novel proteins for use in drug discovery and materials science.

Founded by former Meta AI researchers, EvolutionaryScale aims to streamline the costly and complex process of protein design. The company plans to monetize through partnerships, usage fees, and revenue sharing, with plans to integrate ESM3 into AWS and NVIDIA platforms for select customers. While acknowledging the long-term nature of their goals, EvolutionaryScale is betting on scaling up their model training to create a general-purpose AI model for biotech applications, to differentiate from other AI-driven biotech firms that could represent direct competition, such as DeepMind's Isomorphic Labs.

Formation Bio raised a $372 million Series D

Formation Bio, formerly TrialSpark, has raised $372 million in a Series D funding round led by Andreessen Horowitz, with participation from Sanofi and other investors. This round brings the company's raised funding to $600 million in total. Co-founded by Benjamine Liu and Linhao Zhang in 2016, Formation Bio builds tech solutions for clinical trials and drug development, aiming to reduce the time and cost associated with bringing new drugs to market.

The company is collaborating with OpenAI and Sanofi to develop AI solutions for drug development, though this partnership has raised questions about potential conflicts of interest due to OpenAI CEO Sam Altman's involvement in Formation's Series C. A representative for OpenAI confirmed that the deal was led by OpenAI COO Brad Lightcap and the board of directors, but failed to specify Altman's position.

Formation Bio currently has treatments for chronic hand eczema, sensory neuropathy and knee osteoarthritis in its clinical pipeline, with its eczema treatment reaching phase 3 trials.

Ellie Ramirez-Camara profile image
by Ellie Ramirez-Camara
Updated

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