A New Turning Point in Biotech Innovation: The Rapid Growth of AI-Driven Drug Development and Personalized Medicine
Editor
As of early 2026, the global biotechnology industry is at a historic turning point due to the convergence of artificial intelligence and personalized medicine technologies. According to a recently released global biotech market report, the worldwide biotech market size is projected to reach $1.2 trillion in 2026, reflecting a 15.3% increase from the previous year. Notably, the AI-driven drug development sector is driving the overall growth of the biotech market with a steep annual growth rate of 32.7%. This rapid growth is underpinned by the accelerated digital healthcare transition post-pandemic and a surge in demand for precision medicine.
South Korea’s biotech ecosystem is also at the heart of these global trends. According to the latest data from the Korea Biotechnology Industry Organization, the domestic biohealth market size is estimated to reach 23.8 trillion won by 2025, a 78% increase from 2020. The K-Bio Belt, centered around the Pangyo and Songdo bio clusters, currently houses over 430 biotech companies, 37% of which possess AI-driven drug development or digital healthcare-related technologies. Leading domestic biotech companies like Samsung Biologics and Celltrion are continuously expanding their market share in the global CDMO (Contract Development and Manufacturing Organization) market. Notably, Samsung Biologics recorded an 18.2% market share in the global biopharmaceutical contract manufacturing market as of Q4 2025.
One of the most notable technologies in the AI-driven drug development field is protein structure prediction and molecular design automation. Since the commercialization of DeepMind’s AlphaFold3 in the second half of 2024, revolutionary changes have occurred in the drug development processes of pharmaceutical companies worldwide. According to the latest analysis by Boston Consulting Group, AI-driven drug development shortens the development period by an average of 3.2 years and reduces development costs by 42% compared to traditional methods. This signifies a dramatic reduction from the average 13-year development period and $2.6 billion development cost of conventional drug development. Currently, 18 of the world’s top 20 pharmaceutical companies have invested a total of $14.7 billion in AI-driven drug development platforms, with more than half of this investment concentrated in 2025-2026.
Acceleration of Commercialization in Personalized Medicine Technologies
The field of personalized medicine has entered a full-fledged commercialization phase by 2026. As the cost of genome analysis has dropped from $1,000 in 2020 to $299 currently, the development of personalized therapeutics utilizing individual genomic information is rapidly expanding. The CAR-T cell therapy market, in particular, is projected to grow from $18.9 billion in 2025 to $24.7 billion in 2026, a 30.7% increase, driven by the clinically proven efficacy of personalized immunotherapy. Swiss company Roche achieved an annual revenue of 31.2 billion Swiss francs in 2025 solely from its personalized cancer treatment portfolio, accounting for 47.3% of its total revenue.
In South Korea, the growth of the personalized medicine sector is also noteworthy. Major domestic medical institutions such as Seoul National University Hospital, Samsung Medical Center, and Asan Medical Center have established biobanks that currently hold genomic information from 1.48 million individuals. Based on this data, research on precision medicine tailored to Koreans is actively underway. Korean researchers are achieving global success in developing personalized treatments for diseases with high incidence rates among Asians, such as gastric and liver cancer. Celltrion, for example, recorded $1.7 billion in sales in the Asia-Pacific region in 2025 through the development of biosimilars reflecting Korean genomic characteristics, a 23.8% increase from the previous year.
The liquid biopsy market, a key component of personalized medicine technology, is also experiencing rapid growth. This technology, which detects circulating tumor DNA in bodily fluids like blood or saliva for early cancer detection, has reached a global market size of $6.7 billion in 2026, with an annual growth rate of 19.4%. Following FDA approval of Grail’s multi-cancer early detection product Galleri, competitors like Illumina and Guardant Health are accelerating the development of similar products. In South Korea, companies like Macrogen and Theragen Etex are investing a total of 34 billion won in developing domestic liquid biopsy technology, aiming for commercialization in the second half of 2026.
The digital therapeutics market, another core area of personalized medicine, is also showing remarkable growth. Digital therapeutics, which use software to prevent, manage, and treat diseases, are projected to reach a global market size of $13.4 billion by 2026, a 187% increase from 2023. Digital therapeutics in the mental health sector account for 34.2% of the total market, representing the largest share. The number of FDA-approved digital therapeutics has reached 23, with more than half approved between 2024 and 2025, indicating a significant acceleration in commercialization.
Global Competitive Landscape and Investment Trends
Competition in the global biotech market is becoming more multipolar, shifting from a US-Europe-centric structure to the rise of Asian countries. China’s biotech market grew to $289 billion by 2025, accounting for 24.1% of the global market. With the Chinese government’s ’14th Five-Year Plan’ announcing an investment of 120 billion yuan (approximately $18 billion) in the biopharmaceutical sector over the next five years, global competition is expected to intensify. China’s BGI Genomics maintains the world’s top market share in the genomic analysis field, while WuXi AppTec ranks third in the global CRO market with a 15.7% share.
Japan also demonstrates unique strengths in regenerative medicine and cell therapy. Since the Japanese government enacted the world’s first regenerative medicine-related legislation in 2014, the regenerative medicine market has grown rapidly, reaching $4.7 billion by 2025. Takeda Pharmaceutical recorded annual sales of $2.2 billion with its hemophilia treatment Adynovate, and Astellas Pharma holds global competitiveness in the stem cell therapy field. Japan’s iPS cell technology, accelerated by Kyoto University Professor Shinya Yamanaka’s Nobel Prize, has led to the commercialization of seven iPS cell-based therapies currently in clinical trials.
From an investment perspective, global venture capital investment in the biotech sector totaled $28.7 billion in 2025, with AI-driven drug development accounting for $8.9 billion (31%) of the total. While the US still accounts for 64% of the total investment, the proportion of investment in Asia has significantly increased from 12% in 2020 to 23% in 2025. In South Korea, investment in the biotech sector reached 2.14 trillion won in 2025, an 18.7% increase from the previous year, with the government-led K-New Deal Biohealth Project accounting for 890 billion won.
Major multinational pharmaceutical companies are also actively engaged in M&A activities. The total value of biotech M&A deals reached $124.7 billion in 2025, a 34% increase from 2024, with a focus on acquiring AI-driven drug development startups. Johnson & Johnson acquired four AI-driven drug development companies for a total of $12.7 billion in 2025, while Pfizer invested $8.9 billion in three startups in the personalized cancer treatment field. Novartis announced plans to invest 1.5 billion Swiss francs over the next three years to strengthen its digital therapeutics sector by establishing a digital innovation center in Basel, Switzerland.
Changes in the regulatory environment also play a crucial role in the growth of the biotech industry. In December 2025, the US FDA released new guidelines for AI-based medical devices, establishing transparency and explainability of AI algorithms as key approval criteria. The European Medicines Agency (EMA) also introduced an expedited review process for personalized therapeutics starting January 2026, reducing the approval period from 18 months to 12 months. South Korea’s Ministry of Food and Drug Safety is expanding the regulatory sandbox system through amendments to the ‘Advanced Regenerative Medicine and Advanced Biopharmaceuticals Safety and Support Act’ in the second half of 2025 to support the commercialization of innovative biotech technologies.
The outlook for the biotech industry in 2026 is highly positive. According to the latest report from global market research firm McKinsey, the convergence of AI and biotech is expected to create $60 billion in new market value annually by 2030. The personalized medicine sector, in particular, is projected to grow at an annual rate of 27.3% over the next five years, indicating a paradigm shift from the traditional blockbuster drug development model to niche therapeutics based on precision medicine. The South Korean biotech industry has set a goal to become one of the world’s top five biohealth powerhouses by 2030 through the K-Bio Grand Challenge Project, with a total investment of 18 trillion won planned. Considering these global trends and strategic national investments, the biotech industry is expected to maintain sustained high growth in the coming years.
