Who sells the formula for it? I mean I have a vague notion that it's in town. Wraiths are hands down the hardest hitting normal enemies I've fought so far. I would've consulted the guide but they don't cover it. I'd like to be all tactical about the battle but you really have had to've died to do the proper preparation for this fight.

I don't remember for sure and I'm away from my gaming PC, but I'm quite certain Cedric sells it. You must've met him to progress the storyline.
There are three more diagram/formula sellers you could try that I remember:
The blacksmith apprentice in the non-human district
The Incense and drugs trader near the inn
The leatherworker and dice champion with the troll head trophy (Seller or something) in the vilage

And maybe, the Dwarf with the bookshop in the non-human district. He also has a book on wraiths.