Hidden Risks Amid the Biotech Investment Boom: A 2025 Global Bioindustry Analysis
Editor
As of November 2025, the global biotechnology industry is experiencing unprecedented growth. According to BioWorld Intelligence, the global biotech market size in 2025 reached $420 billion, marking a 23% increase from the previous year and the highest growth rate in the past decade. Notably, the Asia-Pacific region is driving 35% of the overall growth, with biotech companies from East Asian countries, including Korea, expanding their presence on the global stage. However, behind this rapid growth lies a complex set of challenges, including an overheated investment environment, technological limitations, and a changing regulatory landscape.
The current biotech investment boom is driven by three main factors. First, there is a shift in societal perception of biotechnology and increased government support following the COVID-19 pandemic. The U.S. National Institutes of Health (NIH) has set its 2025 research and development budget at $52 billion, a 15% increase from the previous year, while the European Union is investing €28 billion in the biotech sector through the Horizon Europe program. Second, the convergence of artificial intelligence and biotechnology is accelerating, significantly improving drug development efficiency. The commercialization of protein structure prediction using Google’s DeepMind’s AlphaFold technology suggests that the traditional 10-15 year drug development period could be reduced to 5-7 years. Third, there is explosive growth in the precision medicine market. The McKinsey Global Institute forecasts that the precision medicine market will grow from $240 billion in 2025 to $450 billion by 2030.
Korea’s biotech ecosystem is gaining particular attention amid these global trends. Korean companies such as Celltrion (Incheon), Samsung Biologics (Incheon), and SK Bioscience (Seongnam) are solidifying their status as global biotech manufacturing hubs. Notably, Samsung Biologics recorded a 28% increase in third-quarter revenue in 2025 compared to the same period last year, reaching 1.24 trillion won, maintaining a 17% market share in the global biopharmaceutical contract manufacturing organization (CMO) market, ranking third worldwide. Impressively, the Korean government’s K-Bio Belt project is showing visible results. According to the Korea Biotechnology Industry Organization, the export value of domestic biotech companies from January to October 2025 increased by 31% year-on-year to $8.9 billion, indicating Korea’s emergence as a biotech powerhouse.
However, underlying this growth are several structural issues. The most severe problem is the gap between excessive expectations and reality. According to a recent report by VentureOne Partners, a biotech venture capital firm in California, 78% of biotech companies that went public in 2024-2025 saw their stock prices fall below their initial public offering (IPO) price, with an average decline of 35%. This suggests that investors have overestimated the commercialization potential and marketability of biotech technologies. In fact, the proportion of new drugs approved by the FDA that achieve commercial success remains below 20%, similar to figures from a decade ago.
Global Competitive Landscape and Technological Hegemony
The current competitive landscape in the global biotech market is being reorganized around three major regions: the United States, Europe, and Asia. The United States continues to play a central role in innovative biotech development, particularly maintaining a dominant position in the mRNA technology field. Moderna (Massachusetts, USA) and the Pfizer-BioNTech alliance (Mainz, Germany) are focusing on developing mRNA vaccines for cancer treatment, building on their success with COVID-19 vaccines. The market size for this field is expected to grow from $18 billion in 2025 to $65 billion by 2030. Moderna has set its 2025 third-quarter R&D budget at $1.2 billion, a 45% increase from the same period last year, continuing its aggressive investment.
Europe is promoting biotech innovation centered around traditional pharmaceutical powerhouses. Roche (Basel, Switzerland) is focusing on developing personalized cancer treatments, recording an 18% increase in oncology sales in 2025 compared to the previous year, reaching 14 billion Swiss francs. CureVac (Tübingen, Germany) is expanding its mRNA technology platform to develop not only infectious disease prevention but also cancer treatments, having received three clinical trial approvals from the European Medicines Agency (EMA) in 2025 to strengthen its pipeline. Notably, the European Union is investing €5 billion annually through the European Biotech Initiative to secure biotech sovereignty.
In the Asian market, China and Korea are engaged in fierce competition. China’s biotech market grew to $120 billion in 2025, showing strength particularly in the biosimilar sector. WuXi Biologics (Shanghai), China’s largest biotech company, holds a 12% market share in the global biopharmaceutical contract development and manufacturing organization (CDMO) market, experiencing rapid growth. Meanwhile, Korea is specializing in the production of premium biopharmaceuticals, leveraging high technology and quality control systems. Korean biotech companies maintain an average operating profit margin of 15.2%, significantly higher than the 8.7% of Chinese companies, indicating the effectiveness of their high-value-added strategy.
Amid this competitive landscape, the race for technological hegemony is intensifying. In the CRISPR-Cas9 gene editing field, a patent dispute between the Broad Institute (Massachusetts, USA) and the University of California, Berkeley, is impacting the entire industry. The outcome of this dispute could significantly alter the royalty burdens for biotech companies worldwide utilizing related technologies, drawing close attention from investors. Meanwhile, in the fields of next-generation gene editing technologies like Prime Editing and Base Editing, no clear technology leader has emerged yet, presenting opportunities for latecomers, including Korea.
Regulatory Environment Changes and Market Entry Barriers
One of the most notable changes in the biotech industry in 2025 is the improvement of approval processes by regulatory authorities in various countries. The FDA introduced a new “Biotech FastTrack” system in January 2025, reducing the approval period for innovative biopharmaceuticals from the existing 12-18 months to 8-12 months. As a result, the number of biopharmaceuticals approved by the FDA in the first half of 2025 increased by 40% year-on-year to 34. The EMA is showing similar movements, particularly expanding the conditional approval system for orphan drugs and personalized treatments. While these regulatory improvements accelerate market entry for biotech companies, concerns about safety verification are also being raised.
Korea’s regulatory environment is also significantly improving. The Ministry of Food and Drug Safety is fully implementing the “K-Bio Innovation Approval System” in 2025, providing priority reviews and conditional approvals for innovative drugs developed by domestic biotech companies. Through this system, the number of clinical trial approvals received by domestic biotech companies from January to October 2025 increased by 52% year-on-year to 187. Notably, Korea has established a complete regulatory framework for the commercial production of CAR-T cell therapies, the first in Asia. This is evaluated as laying the foundation for Korean biotech companies to secure global competitiveness in the next-generation immuno-oncology treatment field.
However, along with regulatory easing, new challenges are emerging. The biggest issue is ensuring the quality control and safety of biopharmaceuticals. In the first half of 2025, 23 biopharmaceuticals were recalled worldwide, a 35% increase from the same period last year, with 70% due to quality control failures during manufacturing. The rapid growth of the biosimilar market is exacerbating quality disparity issues. The World Health Organization (WHO) designated “strengthening biopharmaceutical manufacturing quality control” as a key task for global health safety in its October 2025 report, recommending stricter quality standards to regulatory authorities worldwide.
These regulatory changes are significantly impacting the business strategies of biotech companies. Large pharmaceutical companies are expanding multinational simultaneous clinical trials to diversify regulatory risks, leading to increased clinical trial costs. According to QuintilesIMS (North Carolina, USA), the average global biopharmaceutical clinical trial cost in 2025 reached $420 million, an 18% increase from the previous year. This poses a significant burden on small and medium-sized biotech companies, making it essential to secure funding through partnerships or mergers and acquisitions (M&A) with large pharmaceutical companies. In fact, the global biotech M&A transaction volume from January to October 2025 increased by 27% year-on-year to $124 billion, with more than half of the transactions aimed at securing clinical trial funding.
From an investment perspective, the current biotech market presents both opportunities and risks. On the positive side, continuous creation of new growth drivers is evident due to technological innovation and regulatory improvements. Fields such as AI-based drug development, personalized treatments, and next-generation immuno-oncology treatments are promising, with expected annual growth rates exceeding 25% over the next 5-10 years. Additionally, the aging population in Asian markets, particularly in Korea and Japan, is expected to drive sustained demand for biopharmaceuticals. Japan’s Ministry of Health, Labour and Welfare announced that the biopharmaceutical market in 2025 is expected to grow by 22% year-on-year to $48 billion.
On the other hand, the risks are considerable. The biggest concern is whether the current high valuations can translate into actual performance. According to an analysis by Evercore ISI, a biotech investment bank in New York, the current Nasdaq Biotechnology Index (NBI) has an average price-to-earnings ratio (PER) of 45, significantly higher than the historical average of 28. This suggests that investors may be overly optimistic about future growth. Additionally, if global interest rates rise and inflationary pressures persist, biotech companies with insufficient cash flow may face difficulties in raising funds, a major risk. In fact, the average debt ratio of biotech companies in the third quarter of 2025 increased by 12% year-on-year to 67%, raising concerns about financial soundness.
In conclusion, the current biotech industry in 2025 is facing the dual challenges of a heated investment environment and structural risks, alongside the vast opportunities of technological innovation and market expansion. For Asian biotech companies, including those in Korea, to secure competitiveness on the global stage, they must focus on developing innovative technologies and building global partnerships beyond merely expanding production capacity. Investors also need a strategy of selectively investing in companies with both technological prowess and marketability from a long-term perspective, with a thorough analysis of regulatory risks and changes in the competitive environment being key to investment success. The next 2-3 years will be a crucial period to determine whether the current growth momentum can translate into actual profitability, during which the market is expected to undergo restructuring, distinguishing true winners from losers.
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**Disclaimer**: This analysis is based on publicly available information and is not intended as investment advice or recommendations. Investment decisions should be made based on individual judgment and responsibility, and there is a risk of loss when investing in the mentioned companies or technologies.
