A New Turning Point in Biotech Innovation: Market Changes in 2025 Driven by AI-Based Drug Development and Precision Medicine
Editor
In 2025, the biotechnology industry is experiencing an unprecedented transformation with the full-scale adoption of AI and machine learning technologies. The global biotech market size is projected to grow by 11.3%, from $1.24 trillion in 2024 to $1.38 trillion in 2025, with the AI-based drug development market alone expected to reach $35 billion. Notably, innovations in precision medicine and personalized therapeutics are prominent, rapidly reshaping the competitive landscape between traditional pharmaceutical companies and emerging biotech firms. In Korea, the government-led establishment of bio clusters centered around the K-Bio Belt project is accelerating, significantly enhancing the global competitiveness of domestic bio companies like Samsung Biologics and Celltrion.
The core of AI-based drug development is to reduce the traditional drug development period from 10-15 years to 5-7 years and to increase the development success rate from 12% to 25%. With the commercialization of Google DeepMind’s AlphaFold protein structure prediction technology, major pharmaceutical companies worldwide are accelerating new drug development using this technology. Swiss company Roche announced a $1.5 billion investment in an AlphaFold-based drug development project by the end of 2024, while Johnson & Johnson in the U.S. allocated $1.2 billion to build an AI-based drug development platform through its Janssen Pharmaceuticals division. This expansion of investment is not merely about adopting technology but is transforming the business model of the pharmaceutical industry itself.
In the field of precision medicine, the decline in the cost of genomic analysis technology is a key driver of market expansion. As of 2025, the cost of whole-genome sequencing has fallen to around $300 per genome, making the development of personalized therapeutics a feasible reality. Illumina’s next-generation sequencing platform and Oxford Nanopore’s real-time DNA sequencing technology are competing to lead the market, with the diagnostic services market utilizing these technologies growing at an annual rate of 23%. Particularly in cancer treatment, the development of personalized immunotherapies based on patients’ genomic information is actively progressing, with the CAR-T cell therapy market alone expected to reach $18 billion by 2025.
The Rapid Rise of the Asian Biotech Market and Korea’s Strategic Positioning
The Asian biotech market is currently the fastest-growing in the world as of 2025. China’s biotech market, valued at $210 billion, ranks second globally after the U.S., with an annual growth rate of 15.7%. Under the Chinese government’s ‘Healthy China 2030’ policy, investment in biopharmaceutical development is surging, with over 3,000 biotech companies concentrated in bio clusters centered around Shanghai and Beijing. Japan also maintains global competitiveness in regenerative medicine and stem cell therapy, with a robust industrial ecosystem led by companies like Fujifilm and Takeda Pharmaceutical.
Korea’s biotech industry, as of 2025, forms a $42 billion market, ranking seventh globally, and is particularly securing a leading global position in biopharmaceutical production. Samsung Biologics achieved annual sales of 3.2 trillion won through the world’s largest biopharmaceutical production facility in Songdo, Incheon, capturing a 15% share of the global bio CMO (Contract Manufacturing Organization) market. Celltrion also recorded annual sales of 2.8 trillion won through its biosimilar products, successfully expanding its market share in Europe and the U.S. The success of these companies exemplifies Korea’s establishment as a global hub in bio manufacturing.
On a governmental level, the K-Bio Lagrange Project plans to invest a total of 18 trillion won in the biohealth sector by 2025, with 7 trillion won to be sourced from private investment. The bio cluster development projects centered around Osong, Chuncheon, and Andong are being fully implemented, establishing a bio ecosystem encompassing the entire cycle from research and development to production and commercialization. Alongside these policy supports, venture capital investments in biotech are also surging, with investment in Korean biotech startups in 2024 increasing by 34% year-on-year to 1.2 trillion won.
Strategic Changes of Global Pharmaceutical Giants and Market Restructuring
As of 2025, traditional global pharmaceutical giants are pursuing fundamental changes in their business models. Pfizer is investing $5 billion annually in the development of next-generation vaccines using mRNA technology, focusing particularly on personalized mRNA vaccines for cancer treatment. This strategy aims to secure new growth drivers by leveraging the mRNA technology know-how accumulated during the COVID-19 vaccine development process. Novartis conducted a $15 billion merger and acquisition by the end of 2024 to maintain its leading position in the cell and gene therapy field, actively acquiring biotech companies specialized in developing treatments for rare diseases.
AstraZeneca established a $2 billion research and development center in Cambridge, UK, to build an AI-based drug development platform, aiming to increase the number of annual new drug launches from the current 2-3 to 7-8 by 2030. Such large-scale investments are recognized as essential strategies for traditional pharmaceutical companies to gain an edge in competition with innovative biotech startups. As the paradigm shifts from single-target therapies to multi-target therapies, investments are increasingly focused on developing new drugs with complex mechanisms of action.
The growth of biotech startups is also noteworthy. Moderna in the U.S. has built a diverse therapeutic pipeline based on its mRNA platform, achieving a market capitalization of $80 billion and announcing groundbreaking clinical results in personalized cancer vaccine development. BioNTech in Europe has also secured competitiveness on par with global pharmaceutical companies through innovations in the immunotherapy field. The success of these companies demonstrates that technological innovation is a more critical competitive factor in the biotech industry than company size or history.
From an investment perspective, the biotech sector currently accounts for 25% of global venture capital investments in 2025, with a total of $120 billion in funds flowing in. The average investment size for Series A stage biotech startups has increased to $28 million, indicating a clear trend of large-scale capital being injected from the early stages. This is because, although the cost of technology development in the biotech sector is soaring, the potential returns upon success far exceed those in other industries. In fact, the average return on investment for biotech companies listed from 2020 to 2024 was 23% annually, more than double the average return of the overall stock market.
Changes in the regulatory environment are also significantly impacting the growth of the biotech industry. The U.S. FDA announced guidelines for AI-based drug development by the end of 2024, expanding the fast-track system that simplifies existing clinical trial procedures. The European Medicines Agency (EMA) also shortened the approval process for advanced therapy medicinal products, reducing the average approval period from 18 months to 12 months. The Korean Ministry of Food and Drug Safety is implementing a conditional approval system for biopharmaceuticals from 2025, allowing limited marketing even before the completion of Phase 3 clinical trials. Such regulatory easing shortens the market entry time for biotech companies and accelerates the investment recovery period.
One of the most notable trends in the biotech industry in 2025 is the convergence with digital healthcare. Personalized health management services, combining real-time biometric data collection through wearable devices with AI-based analysis, are rapidly spreading, accelerating the shift to a prevention-focused healthcare paradigm. With the commercialization of disease prediction algorithms using Apple’s HealthKit and Google’s Fitbit data, the transition from traditional treatment-focused to prevention-focused medical paradigms is becoming more pronounced. This change provides new business opportunities for biotech companies while requiring a fundamental re-evaluation of existing healthcare service models.
The future outlook for the biotech industry is very bright. The global biotech market size is projected to reach $2.4 trillion by 2030, corresponding to an annual growth rate of 12.8%. The growth potential of the Asian market is particularly noteworthy, with the biotech market share of Asian countries, including Korea, expected to increase from 28% in 2025 to 35% by 2030. This growth is supported by structural factors such as population aging, the increase in chronic diseases, and the expanding demand for personalized medicine, securing sustainable growth drivers in the long term. For investors, this presents an attractive investment opportunity where technological innovation and market growth occur simultaneously, with the emergence of new unicorn companies expected, especially in the convergence field of AI and biotechnology.
