A New Paradigm of Biotech Innovation: AI-Based Drug Development and Personalized Medicine Shaping the 2025 Market Inflection Point
Editor
Structural Changes in the Biotech Industry Brought by the AI Revolution
As of December 2025, the biotech industry is undergoing fundamental changes due to the rapid development of artificial intelligence and machine learning technologies. The global biotech market has grown by 22.4% from $980 billion in 2024 to $1.2 trillion in 2025, with AI-based drug development driving market growth. This innovation, which began around the biotech hub in Boston, USA, is now spreading to South Korea’s Pangyo Bio Valley and China’s Shanghai Bio Park, forming a global competitive landscape.
Roche Holding, based in Basel, Switzerland, announced a $1.5 billion investment in an AI-based drug development platform in the first half of 2025, projecting that it could reduce drug development time from the traditional 10-15 years to 5-7 years. AbbVie, headquartered in Chicago, USA, invested a total of $800 million in four AI drug development startups in the third quarter of this year, accelerating the development of next-generation cancer and immunotherapy drugs. These large-scale investments demonstrate that AI technology has become a core competency in the biotech industry, beyond just a supplementary tool.
South Korea’s biotech ecosystem is also rapidly evolving. Samsung Biologics, located in Songdo, Incheon, reported a 35% improvement in production efficiency by introducing an AI-based production optimization system in its CMO (Contract Manufacturing Organization) business in 2025. Additionally, Celltrion, headquartered in Yeonsu-gu, Incheon, achieved a 40% reduction in development costs by applying machine learning algorithms to biosimilar development. These innovations provide South Korean biotech companies with a strategic advantage in securing cost efficiency and technological prowess in the global competition.
A particularly noteworthy change is the rapid growth in the field of personalized medicine. The global personalized medicine market grew by 30.9% from $68 billion in 2024 to $89 billion in 2025, driven by the cost efficiency of genomic analysis technology and the improvement of AI-based data analysis capabilities. Pfizer, headquartered in New York, USA, launched a new platform for developing personalized cancer treatments in the fourth quarter of this year, embarking on the development of therapies based on individual genomic information. Johnson & Johnson, based in New Brunswick, New Jersey, announced plans to invest $2.5 billion in the personalized medicine sector throughout 2025.
Changes in Global Competitive Landscape and Market Dynamics
The competitive landscape of the biotech market in 2025 is characterized by a complex interplay of collaboration and competition between traditional pharmaceutical giants and innovative biotech startups. Novartis, based in Basel, Switzerland, signed licensing agreements with 12 biotech startups in the first half of this year alone, employing an open innovation strategy to actively absorb external innovations. This approach is evaluated as a win-win model that reduces internal R&D costs while securing access to innovative technologies.
In the Asian market, biotech companies in China and South Korea are experiencing rapid growth. China’s biotech market grew to $240 billion in 2025, a 28% increase from the previous year. Particularly, biotech clusters centered around Shanghai and Beijing are rapidly securing global competitiveness under strong government support. Meanwhile, South Korea, despite its relatively small market size, continues to expand its global market share in the CMO/CDMO business, led by Samsung Biologics and Celltrion.
In the U.S. market, traditional Big Pharma companies are actively pursuing large-scale M&A to maintain competitiveness in the biotech sector. The scale of M&A in the biotech field reached $125 billion in the first half of 2025, a 45% increase compared to the same period last year. Pfizer strengthened its next-generation therapeutic portfolio by acquiring a biotech company specializing in immuno-oncology for $18 billion in August this year, and Johnson & Johnson invested $12 billion in acquiring a startup in the gene therapy field. These large-scale investments indicate that access to innovative technology has become a key factor determining competitiveness in the biotech industry.
Changes in the regulatory environment also significantly impact market dynamics. The U.S. FDA began implementing new guidelines for AI-based drug development in the second half of 2025, designed to enhance transparency and safety in the development process. The European Medicines Agency (EMA) has introduced a similar regulatory framework, making it inevitable for global biotech companies to revise their development strategies to meet new regulatory requirements. The Korean Ministry of Food and Drug Safety also introduced a new system in October this year to simplify the approval process for personalized medicine products, supporting the innovative activities of domestic biotech companies.
Looking at investment trends, global biotech venture capital investment reached $68 billion in 2025, with 45% focused on AI-based drug development and personalized medicine. Particularly, seed-stage investment increased by 60% from the previous year, recording $8.5 billion, indicating a significant increase in investor interest in early-stage innovative companies. In South Korea, the government-led K-Bio Fund expanded to a scale of 1.2 trillion won this year, playing an important role in revitalizing the domestic biotech ecosystem.
Future Outlook and Investment Opportunity Analysis
As of the end of 2025, the biotech industry stands at a turning point where technological innovation and market expansion are occurring simultaneously. Industry experts predict that AI-based drug development will enter the commercialization stage in earnest over the next 3-5 years, with the development success rate expected to rise from the current 12% to 25-30%. This is anticipated to lead to a dramatic reduction in drug development costs and improved profitability for biotech companies. According to a recent report by the McKinsey Global Institute, the AI-based biotech market is projected to grow at an average annual rate of 35%, reaching a scale of $500 billion by 2030.
In the field of personalized medicine, the continuous decline in genomic analysis costs and the advancement of big data analysis technology are expected to accelerate its popularization. The cost of whole-genome analysis has fallen to around $500 and is expected to drop below $100 by 2030. This cost efficiency is likely to expand personalized medicine from the treatment of rare diseases to the management of common chronic diseases. The global consulting firm Boston Consulting Group analyzed that the personalized medicine market will grow to $350 billion by 2030, with the Asia-Pacific region accounting for 40% of the market share.
From an investment perspective, the current valuation of biotech stocks is significantly discounted due to technological uncertainty and regulatory risks. In the case of Samsung Biologics, there is a dominant analysis that its current market capitalization is relatively undervalued compared to the expected sales of 4.5 trillion won in 2025. Celltrion is also evaluated as having high mid- to long-term investment attractiveness at the current stock price level, considering the growth potential of the biosimilar market. Among global pharmaceutical companies, Novartis and Roche are analyzed to be in the most competitive position in terms of AI-based drug development capabilities and personalized medicine portfolios.
However, significant risk factors still exist in biotech investments. The inherent uncertainty of drug development, long development periods, and high failure rates remain unresolved fundamental challenges. Additionally, the risk of technological obsolescence due to the rapid advancement of AI technology and the uncertainty of the regulatory environment are important factors that investors need to consider. Particularly, the strengthening of regulations related to personal data protection may act as a constraint on the growth rate of the personalized medicine field. Industry experts recommend that biotech investments be comprehensively evaluated for technological superiority, regulatory response capabilities, partnership-building capabilities, and sufficient funding capabilities.
In conclusion, the biotech industry in 2025 is at the heart of a paradigm shift centered on AI and personalized medicine. At this point where technological innovation and market expansion are occurring simultaneously, investors and companies need a cautious yet proactive approach from a long-term perspective. In particular, South Korean biotech companies should focus more on building strategic partnerships along with technological innovation to secure global competitiveness.
