{"url":"https://www.forbes.com/sites/amyfeldman/2026/04/16/this-sam-altman-backed-18-billion-startup-bets-ai-can-get-drugs-through-clinical-trials-faster-formation-bio/","title":"Altman-backed Formation Bio bets AI speeds stalled drug trials","domain":"forbes.com","imageUrl":"https://images.pexels.com/photos/7230835/pexels-photo-7230835.jpeg?auto=compress&cs=tinysrgb&h=650&w=940","pexelsSearchTerm":"AI drug trials","category":"Tech","language":"en","slug":"4d7e1110","id":"4d7e1110-110d-4592-b43b-039e89cbd82a","description":"Formation Bio uses AI to speed clinical trials by buying stalled early-stage drug candidates.","summary":"## TL;DR\n- Formation Bio uses AI to speed clinical trials by buying stalled early-stage drug candidates.\n- Raised $615 million at $1.8 billion valuation from backers including Sam Altman and Andreessen Horowitz.\n- Targets clinical development bottleneck to get more medicines to patients faster and cheaper.\n\n## The story at a glance\nFormation Bio, a New York City startup founded in 2016 by Ben Liu and Linhao Zhang, has raised $615 million at a $1.8 billion valuation to acquire pre-phase 2 drugs and push them through trials using AI. Backers include Andreessen Horowitz, Sequoia, Thrive Capital, John Doerr, and Sam Altman. The article profiles CEO Liu's view that clinical trials, not drug discovery, block new medicines, with AI cutting trial time and costs by up to 50%. This comes as the company reports deals like licensing a hand eczema drug to Sanofi for $630 million.\n\n## Key points\n- Originally called TrialSpark, Formation Bio shifted from running trials for others to buying its own portfolio of 10 early-stage drugs that stalled after phase 1.\n- Acquired or licensed five drugs so far, targeting knee osteoarthritis, ulcerative colitis, and chronic hand eczema; one osteoarthritis therapy from Merck KGaA is now in phase 3.\n- AI handles patient recruitment, regulatory filings, and predictions like knee replacement risk using models trained on 23,000 patients and 48,000 MRIs.\n- Team led by ex-Pfizer R&D president Mikael Dolsten uses AI to scan non-English publications, including from China, for overlooked candidates.\n- FDA approves about 50 drugs yearly despite more candidates; only 30% of pre-phase 2 drugs succeed, but Formation aims to profit on 1-3 of 10.\n- Past wins include Aditum Bio spinout sold to Eli Lilly for up to $1.9 billion in 2023 and Sanofi hand eczema deal last June.\n- Echoes strategies of Roivant Sciences and others like PureTech and BridgeBio.\n\n## Details and context\nFormation Bio started when Liu, a computational biologist rejected by pharma firms in grad school, cold-emailed investor Michael Moritz for $2.25 million in 2016. Liu argues drug discovery will be commoditized by AI and China, so clinical trials are the real hurdle with \"dead time\" in recruitment and admin.\n\nAI speeds trials by matching patients to drugs and automating tasks, potentially halving time and costs while raising success odds. For the osteoarthritis drug, AI showed it could cut 5-year knee replacement risk, a finding Dolsten says might have been missed otherwise.\n\nThe company plans a portfolio of 10 drugs, betting post-phase 2 value surges. Industry success rates stay low, but early tests like Aditum proved the model.[[1]](https://www.forbes.com/sites/amyfeldman/2026/04/16/this-sam-altman-backed-18-billion-startup-bets-ai-can-get-drugs-through-clinical-trials-faster-formation-bio/)[[2]](https://www.forbes.com/sites/amyfeldman/2026/04/16/this-sam-altman-backed-18-billion-startup-bets-ai-can-get-drugs-through-clinical-trials-faster-formation-bio)\n\n## Key quotes\n- Ben Liu: “What we think the world has wrong is that drug discovery is the bottleneck, and it has not been the bottleneck for a long time.”[[1]](https://www.forbes.com/sites/amyfeldman/2026/04/16/this-sam-altman-backed-18-billion-startup-bets-ai-can-get-drugs-through-clinical-trials-faster-formation-bio/)\n- Ben Liu: “Drugs aren’t worth much until post-phase 2, and there are a lot of post-phase 1 drugs worth betting on.”[[1]](https://www.forbes.com/sites/amyfeldman/2026/04/16/this-sam-altman-backed-18-billion-startup-bets-ai-can-get-drugs-through-clinical-trials-faster-formation-bio/)\n\n## Why it matters\nAI could unlock more FDA approvals beyond the flat 50 per year by fixing trial inefficiencies, affecting millions with conditions like osteoarthritis. Investors and pharma see potential for faster, cheaper drugs, while patients may get treatments sooner if success rates rise. Watch phase 3 results for Formation's portfolio and copycats, though only 30% of early drugs typically succeed.","hashtags":["#ai","#biotech","#drugs","#clinical","#trials","#startups"],"sources":[{"url":"https://www.forbes.com/sites/amyfeldman/2026/04/16/this-sam-altman-backed-18-billion-startup-bets-ai-can-get-drugs-through-clinical-trials-faster-formation-bio/","title":"Original article"}],"viewCount":2,"publishedAt":"2026-04-18T15:58:03.279Z","createdAt":"2026-04-18T15:58:03.279Z","articlePublishedAt":"2026-04-17T10:30:00.000Z"}