A New Era of Biotechnology Innovation: The Rapid Growth of AI-Based Drug Development and Gene Therapy in 2025
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Biotech Innovation Driven by AI-Based Drug Development
In 2025, the global biotechnology industry is reaching a new turning point with the comprehensive adoption of artificial intelligence and machine learning technologies. According to the latest report from market research firm McKinsey, the global biotech market size is expected to reach $1.24 trillion in 2025, an 18.7% increase from the previous year. Particularly, the AI-based drug development sector is leading the overall biotech market growth, recording an annual growth rate of 42.3%. This rapid growth is underpinned by the innovative advancements in AI technology, which have reduced the traditional drug development period from 10-15 years to 5-7 years.
Genentech, headquartered in San Francisco, California, and Roche in Basel, Switzerland, have jointly developed an AI platform called ‘pRED’, which has been commercialized since the fourth quarter of 2024 and has discovered 73 new drug candidates to date. This is 3.2 times faster than traditional methods, and industry experts are calling it a “fundamental shift in the drug development paradigm.” Meanwhile, DeepMind in Cambridge, UK, has developed AlphaFold3, which has increased protein structure prediction accuracy to 95.8%, accelerating drug development efforts by pharmaceutical companies worldwide. Domestically, Samsung Biologics announced that it has achieved a 40% reduction in the antibody drug development process using its self-developed AI platform ‘SamBio-AI’ starting from the second quarter of 2025.
Expansion of the Gene Therapy and Cell Therapy Market
The gene therapy market is experiencing explosive growth in 2025. The global gene therapy market size is projected to increase by 44.9%, from $16.7 billion in 2024 to $24.2 billion in 2025. This growth is attributed to the advancement of CRISPR-Cas9 technology and the expanded application of CAR-T cell therapy. Particularly, the clinical success rate of gene therapy in rare diseases and cancer treatment has significantly improved, drawing increased attention from investors.
Novartis, headquartered in Basel, Switzerland, reported that its CAR-T cell therapy Kymriah achieved global sales of $1.8 billion in the first half of 2025, a 127% increase from the same period last year. The number of CAR-T therapies approved by the U.S. FDA currently stands at 12, with 8 of them approved since 2024. Domestically, Celltrion’s CAR-T therapy ‘CT-P1’ received clinical phase 3 approval from the Ministry of Food and Drug Safety in March this year, bringing it closer to commercialization. Celltrion projects annual sales of 500 billion won by 2027 through this therapy.
Korea’s K-Bio Belt policy also plays a crucial role in the development of the gene therapy sector. The government has allocated a total budget of 2.3 trillion won for the ‘K-Bio Grand Challenge’ project, with 40% or 920 billion won focused on gene therapy research and development. Currently, 143 biotech companies are based in the Osong Bio Cluster, and their cumulative sales in 2025 are expected to reach 4.12 trillion won, a 34.7% increase from the previous year. Notably, the growth of gene therapy specialized companies is prominent, with Genexine’s gene therapy-related sales increasing by 156% from the previous year.
Internationally, investment in gene therapy is also surging. From January to November 2025, venture capital investment in global gene therapy startups totaled $8.7 billion, surpassing the entire 2024 investment of $6.2 billion by 40%. In the U.S., the NIH has allocated a budget of $3.4 billion for gene therapy research in 2025, while the European Union is investing €2.8 billion through the Horizon Europe program. China is also investing $1.5 billion annually in the gene therapy sector as part of its 14th Five-Year Plan, intensifying global competition.
Another major trend in the biotech industry is the spread of precision medicine. The precision medicine market, which provides optimized treatments by analyzing individual genetic information, has grown to $124 billion in 2025, maintaining an annual growth rate of 13.8%. With the commercialization of Illumina’s next-generation sequencing (NGS) technology in the U.S., the cost of personal genome analysis has fallen below $1,000, accelerating the popularization of precision medicine. Domestically, SK Biopharm’s epilepsy treatment ‘Cenobamate’ has shown 2.3 times improved efficacy compared to existing treatments in clinical trials by considering patients’ individual genetic variations.
The digital transformation of the pharmaceutical industry is also accelerating. Roche in Switzerland has invested $1.2 billion in its digital healthcare division in 2025 to build an AI-based diagnostic platform, raising cancer diagnosis accuracy to 92.7%. Johnson & Johnson in the U.S. is investing $800 million in digital therapeutics development through its subsidiary Janssen, with 7 digital therapeutics currently under FDA review. The adoption of these digital technologies has improved clinical trial efficiency by an average of 35%, and new drug development costs have been reduced by 28% compared to traditional methods, according to industry analysis.
Innovation continues in the biopharmaceutical manufacturing sector as well. The introduction of continuous manufacturing technology has improved productivity by 40% compared to traditional batch manufacturing methods, and manufacturing costs have been reduced by 25%. Samsung Biologics has introduced continuous manufacturing facilities at its 4th plant in Songdo, Incheon, expanding its annual production capacity from 240,000 liters to 360,000 liters. This is the largest single biopharmaceutical production facility in the world, and contract manufacturing orders from global pharmaceutical companies are surging. Samsung Biologics’ sales in the third quarter of 2025 increased by 43.2% year-on-year to 984.7 billion won, with an operating profit margin of 28.3%, maintaining the highest level in the industry.
The growth of the biosimilar market is also noteworthy. The global biosimilar market has grown to $28.7 billion in 2025 and is expected to grow at an annual rate of 15.2% until 2030. The expiration of patents for expensive biopharmaceuticals is driving the surge in demand for biosimilars. Celltrion’s biosimilar product line is expected to achieve cumulative sales of 2.84 trillion won in 2025, a 22.1% increase from the previous year. Notably, Celltrion’s breast cancer treatment biosimilar ‘Herzuma’ has captured a 34.2% market share in Europe, establishing itself as a leading product.
The United States has distinct expedited programs, including Fast Track, Breakthrough Therapy, Accelerated Approval and Priority Review. FDA guidance describes a six-month action goal for Priority Review and ten months for standard review, but this is not a blanket six-to-nine-month approval period for orphan drugs or gene therapies. The Cures 2.0 bill was introduced in the House in 2021.
From an investment perspective, the biotech industry still holds high growth potential. The global biotech IPO market in 2025 is valued at $18.4 billion, a 67% increase from the previous year. Particularly, IPOs of AI-based drug development companies are active, with their average company valuation reaching $1.2 billion. In Korea, the number of biotech companies listed on KOSDAQ is increasing, with 23 companies listed in 2025, significantly surpassing the 14 companies listed in the previous year. The average market capitalization of these newly listed biotech companies is 234 billion won, recognized for their technology and growth potential.
However, the biotech industry also faces numerous challenges. The high failure rate of new drug development remains a major risk factor, with the failure rate at the clinical phase 3 stage still at 45%. Additionally, in AI-based drug development, there is uncertainty due to the lack of clear algorithm reliability and regulatory approval standards. Global supply chain instability also affects biopharmaceutical manufacturing, with geopolitical risks being a concern, particularly due to high dependence on Chinese raw materials.
The future outlook for the biotech industry is generally positive. The expansion of medical demand due to global population aging and the increase in chronic diseases, continuous advancement of AI technology, and government policies to foster the biotech industry are expected to act as growth drivers. The global biotech market is projected to grow at an annual rate of 12.4% until 2030, reaching a scale of $2.8 trillion, with Korea expected to secure a market share of 3.2%, or $89.6 billion. From a long-term perspective, biotech companies with technology and pipelines are analyzed to be attractive investment targets for investors.
This article is intended for general informational purposes and does not constitute a recommendation or guarantee for specific investments. Please consult with a professional before making investment decisions.
