A New Turning Point in Biotech Innovation: Market Trends in 2025 Driven by AI-Based Drug Development and Precision Medicine

As of November 2025, the global biotechnology industry is experiencing an unprecedented era of innovation through the convergence of artificial intelligence and data science. The global biotech market size is expected to reach $880 billion by 2025, reflecting a 12.3% growth from the previous year. Notably, the AI-based drug development sector is recording an explosive annual growth rate of 25.7%, leading the digital transformation across the industry. At the center of these changes are global players like California-based Genentech, Massachusetts-based Moderna, and Korea’s Samsung Biologics and Celltrion.

The fundamental change in the drug development process is one of the most noteworthy trends. Traditionally taking over 15 years, the drug development period is being reduced to an average of 8-10 years with the introduction of AI technology, and development costs are decreasing from the previous $2.6 billion to around $1.8 billion. The UK’s DeepMind Technologies has achieved over 95% accuracy in protein structure prediction with its AlphaFold system, bringing revolutionary changes to drug target discovery. Boston-based Recursion Pharmaceuticals in the U.S. is currently developing over 15 drug candidates simultaneously using its AI-based platform, with three of them entering Phase 2 clinical trials.

Significant advancements are also being made in the field of precision medicine. The personalized treatment market has grown to $240 billion by 2025, more than doubling from 2020. Switzerland’s Roche, through its Foundation Medicine division, analyzes data from over 350,000 cancer patients annually using comprehensive genomic profiling (CGP) tests, reporting a 40% improvement in personalized treatment success rates compared to standard treatments. In Korea, Green Cross Genome and Macrogen are securing leading positions in the Asian market, particularly excelling in building a genome database specialized for Koreans.

Market Dynamics and Competitive Landscape of AI-Based Drug Development

The competitive landscape of the AI drug development market is characterized by intense competition between traditional pharmaceutical companies and AI-specialized biotech startups. California-based Atomwise raised $123 million in Series C funding in the first half of 2025 and is currently screening drug candidates using over 650 AI models. The company’s AtomNet platform can analyze over 10 million compounds per day, enhancing speed by more than 1,000 times compared to traditional laboratory methods. On the other hand, Swiss Novartis has chosen to strengthen its internal capabilities through its AI research lab, NIBR Informatics, increasing AI-related R&D investment by 35% compared to 2024.

UK-based Exscientia, located in Cambridge, achieved the milestone of having the world’s first AI-designed drug enter clinical trials. The company’s DSP-1181, developed as a treatment for obsessive-compulsive disorder, demonstrated 50% higher efficacy compared to existing treatments in preclinical stages. Such success stories have significantly attracted investor interest, with total investments in the biotech AI sector reaching $6.7 billion by 2025. In Asia, China’s XtalPi and Japan’s Preferred Networks have each secured substantial investments of $300 million and $200 million, respectively, actively entering the global competition.

The Korean biotech industry is also securing a unique position in the AI drug development competition. Standigm is focusing on discovering new indications for existing approved drugs through its AI-based drug repurposing platform ‘BEST’, with six projects currently in clinical stages. Syntekabio has commercialized antibody optimization technology using its proprietary AI platform, securing technology transfer agreements worth a total of $400 million from global pharmaceutical companies. These achievements suggest that Korea is emerging as an innovation hub rather than just a biotech production base.

Market data indicates that the success rate of AI-based drug development is significantly higher compared to traditional methods. The success rate of transitioning from Phase 1 to Phase 2 clinical trials improved from 63% to 78% with AI application, and the overall success rate of drug development increased from 9.6% to 14.2%. This demonstrates that AI is not merely a tool for enhancing efficiency but a game-changer that fundamentally improves the success probability of drug development. In particular, AI’s impact is more pronounced in the field of rare diseases, where drug development is becoming more active in areas that were previously economically unviable using traditional methods.

Market Expansion of Precision Medicine and Personalized Treatment

In the field of precision medicine, the rapid decline in genome analysis costs is accelerating market expansion. With the cost of whole genome sequencing (WGS) dropping to around $500 by 2025, personalized treatment has emerged as a realistic option. California-based Illumina’s NovaSeq X series can analyze up to 48 whole genomes per day, with an accuracy of 99.9%. These technological advancements have brought particularly innovative changes in cancer treatment, where CAR-T cell therapy has achieved a treatment success rate of over 85% through patient-specific manufacturing.

In the personalized treatment market, Swiss Roche maintains a leading position, but emerging companies are fiercely challenging. California-based 10x Genomics is attempting to differentiate itself with single-cell analysis technology, recording a 28% year-on-year increase in third-quarter revenue to $154 million in 2025. Meanwhile, China’s BGI Genomics is aggressively expanding in the Asian market, rapidly increasing its market share, particularly in Southeast Asia and the Middle East. In Korea, Theragen Etex is maintaining an annual growth rate of over 30% in the genome analysis service sector, solidifying its position as the domestic leader.

The practical application cases of precision medicine are becoming increasingly diverse. The U.S. Memorial Sloan Kettering Cancer Center has provided personalized treatment to over 50,000 cancer patients through the MSK-IMPACT program over the past three years, with 67% of patients showing superior results compared to standard treatments. In particular, for lung cancer patients, the selection of targeted therapies based on specific gene mutations such as EGFR, ALK, and ROS1 has improved the 5-year survival rate from 15% to 45%. These achievements prove that precision medicine is not just a concept but a medical paradigm that provides substantial treatment effects.

In the Asian region, precision medicine approaches tailored to specific populations are gaining attention. Japan’s RIKEN has established the ‘Japanese Multi Omics Reference Panel’, collecting genetic information from 140,000 individuals, and developed disease risk prediction models specific to Japanese individuals. In Korea, the ‘K-MASTER’ program, jointly established by Asan Medical Center and Seoul National University Hospital, analyzed genomic data from 20,000 Korean cancer patients, discovering numerous genetic characteristics different from Western populations. These ethnicity-specific studies are emerging as essential considerations for global pharmaceutical companies entering the Asian market.

The economic impact of the precision medicine market is also significant. The cost-saving effect of personalized treatment is estimated to reach $100 billion annually, resulting from reduced unnecessary treatments and improved treatment efficacy. The U.S. FDA has approved 37 personalized treatments by 2025, a 2.5-fold increase from 2020. In particular, the approval of gene therapies in the field of rare diseases is accelerating, with Switzerland’s Novartis’ Zolgensma (a treatment for spinal muscular atrophy) and U.S. Bluebird Bio’s Zynteglo (a treatment for beta thalassemia) improving accessibility through expanded insurance coverage despite high prices of $2.1 million and $2.8 million, respectively.

The future outlook for the biotechnology industry is very bright. By 2030, the global biotech market is expected to grow to $1.5 trillion, with AI-based drug development and precision medicine accounting for 30% and 25% of the market, respectively. Investment trends show that venture capitalists are focusing on the biotech sector, with $24 billion invested globally in the first half of 2025 alone. Notably, the investment growth rate in the Asian region is remarkable, with $8.5 billion flowing in, a 45% increase from the previous year. In Korea, the combination of the government’s K-Bio Ragon project and private investment has pushed total investment in the biotech sector to exceed 3.5 trillion won.

However, despite this growth, challenges remain to be addressed. The complexity of the regulatory environment is one of the biggest barriers, with a lack of clear guidelines for AI-based drug development. The U.S. FDA plans to release ‘AI in Drug Development Guidance’ in the second half of 2025, but the European Medicines Agency (EMA) and Korea’s Ministry of Food and Drug Safety have not yet provided specific timelines. Additionally, ethical issues regarding privacy and the use of genetic information require ongoing discussion. Strict privacy regulations like Europe’s GDPR add additional compliance burdens for global biotech companies. Companies that overcome these challenges are expected to hold the dominance in the future biotech industry, with regulatory response capabilities emerging as a key competitive advantage alongside technological prowess.

This analysis is intended for general informational purposes and should not be interpreted as advice for investment decisions. Biotechnology investments carry high risks, so please consult with an expert before investing.