June 26 (Reuters) - AI-based drug developer Formation

Bio said on Wednesday that it has raised $372 million in a

late-stage funding round, with a significant participation from

French drugmaker Sanofi.

The funding was led by venture capital firm Andreessen

Horowitz, Sequoia and FPV Ventures among others.

WHY IT'S IMPORTANT

Easing inflationary pressures, increasing bets of a soft

landing for the U.S. economy and promising data from drug trials

are starting to boost the biotech funding market, which saw a

downturn last year along with other industries.

Major drugmakers are using artificial intelligence to find

patients for clinical trials quickly, or to reduce the number of

people needed to test medicines, both accelerating drug

development and potentially saving millions of dollars.

CONTEXT

Formation Bio partners, acquires, or in-licenses drugs from

biotech and pharma companies and then it develops those programs

using its proprietary technology platform.

The company plans to allocate the new capital towards two

primary objectives - acquiring and in-licensing drug candidates

and expanding its AI capabilities.

Last month, Sanofi announced that it is collaborating with

OpenAI and Formation Bio to boost its drug development projects

through the use of artificial intelligence.

BY THE NUMBERS

The company, which did not disclose the valuation of the

latest round, raised $372 million in Series D funding, a

"material step up" from its previous valuation of $1 billion.

The company previously raised $156 million in its last

funding round in 2021.