A New Turning Point in Biotechnology: 2026 AI-based Drug Development and Precision Medicine Market Analysis
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Paradigm Shift in Biotechnology Driven by the AI Revolution
As of 2026, the biotechnology industry is undergoing unprecedented changes due to the rapid advancement of artificial intelligence and machine learning technologies. The global biotechnology market size grew by 9.1%, from $1.1 trillion in 2025 to $1.2 trillion in 2026, with the AI-based drug development sector accounting for $38 billion, or 3.2% of the total market. Notably, the traditional drug development process, which used to take an average of 10-15 years, is now reduced to 7-10 years with the introduction of AI technologies. This change not only shortens the time but also increases the success rate of drug development from 12% to 18%, significantly improving the industry’s overall return on investment (ROI). In the United States, 42% of the new drugs approved by the FDA in 2025 were developed using AI technologies, a significant increase from 23% in 2023.
At the heart of this change are deep learning-based molecular design platforms and large-scale bio-data analysis technologies. Currently, global pharmaceutical companies are investing an average of 35% of their R&D budgets in AI and digital healthcare technologies, up 7 percentage points from 28% in 2024. Swiss company Roche announced a $4.5 billion investment in AI-based personalized therapies by 2026, while American company Johnson & Johnson is analyzing 127 candidate substances simultaneously through its AI drug development platform. Korea’s Samsung Biologics reported a 23% improvement in production efficiency by implementing an AI-based biopharmaceutical production optimization system by the end of 2025.
Innovative advancements continue in the precision medicine field as well. The precision medicine market, which provides customized treatment methods by comprehensively analyzing individual genomic information, lifestyle patterns, and environmental factors, is currently valued at $289 billion in 2026, maintaining a high annual growth rate of 13.7%. The effectiveness of precision medicine is particularly notable in cancer treatment, with survival rates improving by an average of 28% compared to existing standard treatments, and side effects decreasing by 35%. According to a recent report by the U.S. National Cancer Institute (NCI), 67% of newly diagnosed cancer patients in 2026 receive gene analysis-based personalized treatment, a significant increase from 45% in 2024.
The gene therapy and cell therapy sectors are also experiencing significant growth. With the commercialization of gene editing technologies like CRISPR-Cas9 accelerating, the global gene therapy market reached $18.4 billion in 2026, a 22.3% increase from 2025, showing groundbreaking results especially in the treatment of rare diseases. The U.S. FDA approved 17 gene therapies in 2025, with 9 targeting rare diseases that previously had no treatment options. Korea’s Celltrion is poised for global market entry as its CAR-T cell therapy achieved a complete remission rate of 73% in phase 3 clinical trials compared to existing treatments.
Global Competitive Landscape and the Rise of the Korean Biotech Industry
The competitive landscape of the global biotechnology market is becoming more complex and dynamic in 2026. While traditional powerhouses like U.S. and European companies still dominate the market, the rise of companies from the Asia-Pacific region, particularly Korea and China, is notable. According to McKinsey’s latest report, as of 2026, Asian companies account for 28% of the top 100 global biopharmaceutical companies by revenue, up 6 percentage points from 22% in 2024. Among these, Korean companies make up 8%, with 8 companies, alongside 12 Chinese companies (12%) and 8 Japanese companies (8%), showcasing Asia’s biotechnology capabilities.
The growth of the Korean biotech industry is particularly prominent in the biosimilar and CDMO (Contract Development and Manufacturing Organization) sectors. Samsung Biologics ranks second in the global CDMO market with a 14.2% share in 2026, achieving annual sales of 3.8 trillion won, an 18.7% increase from the previous year, with recognized technological prowess in mRNA vaccine and antibody therapy production. Celltrion holds a 12.8% share in the global biosimilar market, achieving annual sales of 2.1 trillion won. Notably, Celltrion’s trastuzumab biosimilar secured a 35% market share in Europe at 40% lower prices than the original drug, contributing to healthcare cost savings.
Meanwhile, global pharmaceutical giants are maintaining their market dominance through innovation. Swiss company Novartis recorded $1.4 billion in sales for its CAR-T cell therapy Kymriah in 2026, solidifying its leading position in personalized therapy. American company AbbVie’s Skyrizi, a successor to Humira, achieved annual sales of $8.9 billion, setting a new standard in the immuno-oncology market. The cancer vaccine development based on mRNA COVID-19 vaccine technology by German company BioNTech and American company Pfizer is also gaining attention, showing tumor size reduction effects in 58% of melanoma patients in phase 2 clinical trials.
The growth of Chinese biotech companies cannot be ignored. China’s biotechnology market reached $184 billion in 2026, ranking second globally after the U.S. ($421 billion). Under the Chinese government’s 14th Five-Year Plan for biotechnology industry development, Chinese biotech companies’ R&D investment reached $58 billion in 2026, a 27% increase from the previous year. Chinese biotech companies like BeiGene and Innovent Biologics are enhancing their competitiveness in the global market, with some products receiving FDA approval for global market entry. This intensified competition positively impacts global biopharmaceutical prices and accessibility.
In terms of investment trends, global venture capital investment in the biotechnology sector totaled $89.2 billion in 2026, an 8.3% increase from 2025, with a focus on AI-based drug development ($18.7 billion), gene therapy ($15.6 billion), and digital healthcare ($13.4 billion). In Korea, the combination of the government’s K-Bio Ragon Project and private investment led to a 34% increase in biotechnology investment in 2026, reaching 8.2 trillion won, with 70% focused on innovative drug development and digital healthcare technologies, and the remaining 30% used for expanding bioproduction infrastructure.
Future Outlook and Evolution of the Industry Ecosystem
As we enter the second half of 2026, the biotechnology industry is encountering several critical inflection points. The most notable is the combination of quantum computing and biotechnology. With the commercialization of molecular simulation technology using quantum computers developed by IBM and Google, predicting protein structures, which took months with traditional supercomputers, is now possible within hours. This is expected to further accelerate the drug development process, with quantum computing-based drug development anticipated to become mainstream from 2027. The Alzheimer’s treatment development project by Roche and IBM, utilizing quantum computing, has achieved a 65% reduction in time to derive candidate substances compared to existing methods.
Changes in the regulatory environment also have a significant impact on industry development. The U.S. FDA announced the ‘AI-based Medical Device and Therapy Approval Guidelines’ in 2026, emphasizing transparency and explainability of AI algorithms as core requirements. Consequently, biotech companies are focusing on developing ‘Explainable AI’ technologies that can clearly explain AI model decision-making processes. In Europe, stricter standards are applied to genomic data utilization due to the strengthening of GDPR (General Data Protection Regulation), prompting global biotech companies to establish complex strategies to address regional regulatory differences. Korea’s Ministry of Food and Drug Safety also introduced the ‘Advanced Biopharmaceutical Approval Special System’ in 2026 to accelerate market entry of innovative biopharmaceuticals.
Sustainability and ESG (Environmental, Social, and Governance) management are emerging as new focal points in the biotech industry. With increasing instability in raw material supply due to climate change, biotech companies are focusing on developing alternative raw materials using synthetic biology technologies. For example, Denmark’s Novo Nordisk achieved a 40% reduction in carbon emissions in insulin production compared to 2025, resulting in an annual CO2 reduction of 1.2 million tons. Korean biotech companies are also actively engaging in ESG management, with Samsung Biologics expanding its renewable energy usage ratio to 85% by 2026, promoting the establishment of carbon-neutral bioproduction facilities.
The convergence of digital healthcare and biotechnology is also accelerating. The preventive medicine service market, combining real-time bio-data collection through wearable devices and AI analysis, has grown to $45 billion in 2026. The ECG monitoring function of the Apple Watch improved early detection rates of atrial fibrillation by 78%, while Google’s AI-based diabetes complication prediction model detected blindness risk in advance with 93.2% accuracy. These digital healthcare technologies are showing an average 35% reduction in overall medical costs through disease prevention and early diagnosis, influencing healthcare policies in various countries.
The outlook for the biotechnology industry over the next five years is very positive. Global market research institutions predict that the biotechnology market will grow at an average annual rate of 11.2%, reaching $2.1 trillion by 2031. The AI-based drug development sector is expected to grow at an average annual rate of 28.7%, forming a $124 billion market by 2031. The Korean biotech industry is also expected to grow at an average annual rate of 15.3% to reach 38 trillion won by 2031, further solidifying its position as a global biotech hub through the achievements of the K-Bio Ragon Project. This growth is expected to bring fundamental changes to extending human health span and improving quality of life, beyond mere market expansion.
This analysis is based on publicly available market data and industry reports, and additional due diligence and expert consultation are recommended for investment decisions. The biotechnology industry can exhibit significant volatility due to regulatory changes and clinical trial results.
