Which trends are set to shape the biotech industry in 2025?

Last year, we took a look at the biotech trends that we thought would shape 2024. Now, as we enter the new year, the biotech industry is continuing to evolve at a rapid pace, and 2025 is shaping up to be a pivotal year for groundbreaking innovations and new drug approvals. 

For this article, we reached out to industry experts to get their thoughts on the trends that will shape the biotech field this year. From artificial intelligence (AI) to precision medicine, here is what they said to keep an eye out for in 2025.

The evolution of AI: A consistent trend reshaping the biotech industry

It is difficult these days to talk about biotech without mentioning the revolutionary role that AI is playing – and will continue to play – in the industry. When making these same predictions last year, we said that AI was likely to be a key biotech trend in 2024. This was most certainly the case, and as the year continued, we discussed all things AI, from whether the biotech AI sector is in the midst of a market bubble to how the technology is transforming cancer care. 

Advancements in AI are expected to continue in 2025, with the technology likely to become more mainstream, allowing for an even better understanding of potential drug candidates earlier in the discovery and development process. 

Kelly Abernathy, vice president (VP) of Clinical Development at Arrivo BioVentures, told Labiotech: “Biomarkers and evidence of target engagement are essential in studying disorders where, in the past, we relied only on subjective rating scales. From drug discovery and design where AI is speeding the creation of novel structures, to the ability to compare the profile of a drug candidate across a variety of parameters, to databases of both human subjects with disease and normal volunteers, the amount of information available to drug developers earlier in the process will allow for more efficient and potentially faster development.”

Agreeing with this sentiment, David Del Bourgo, chief executive officer (CEO) and co-founder of WhiteLab Genomics, commented that AI is already starting to help analyze massive datasets to predict molecular interactions, enabling quicker and more targeted therapeutic development, in turn reducing time and cost for research and development (R&D). He noted that companies such as Insilico Medicine and DeepMind’s AlphaFold have already demonstrated the potential of AI in protein structure prediction and drug design, setting a precedent for wider adoption in 2025.

Meanwhile, Cara Brant, CEO of Clinical Trial Media, expects that we will see a hybrid technology-human approach take hold across healthcare in everything from drug discovery to hospital operations. “The key for healthcare organizations will be building on what they’ve already learned and toeing the line between using AI to optimize and scale data-driven processes while reserving deeply personal and intimate tasks for humans. The latter is one of the largest limitations of AI, but one of the unequivocal strengths of human healthcare providers.”

It will certainly be interesting to see what miracles AI can contribute to the biotech industry this year. 

2025: The expansion of the gene therapy field

With the potential to cure numerous genetic disorders by introducing, modifying, or repairing genetic material within a patient’s cells, gene therapy has been a hot topic in the biotech industry for a good few years now and is continuing to evolve. 

“Regardless of potential changes within the drug regulatory organizations globally, we believe innovations in gene therapies will continue to grow,” said Cem Zorlular, CEO of Er-Kim Pharmaceuticals. “In years past, logistical commercial challenges have been holding back therapies, however, with improved data (based on successes and failures) as well as more advanced technology, the industry has a better understanding of what works and what needs to be improved. We believe we will see more approved novel therapies as a result of this.”

CRISPR in particular could have a big role to play this year. As the end of 2023 saw the approval of the first-ever CRISPR-based gene therapy, Casgevy, for the genetic conditions sickle cell disease and beta-thalassemia, Svetlana Lucas, chief business officer (CBO) of Scribe Therapeutics, believes that 2025 could signal a turning point in the sentiment toward the commercial potential of curative CRISPR-based genetic medicines. 

With Casgevy finally gaining traction in the market with wider access and adoption, plus other CRISPR-based therapies entering early and late-stage clinical trials in larger indications such as cardiovascular disease, Lucas said that this type of genetic medicine will be poised to drive a paradigm shift in how we approach and treat not just rare disease, but chronic diseases as well.  

“Advancements in CRISPR engineering will enable increasingly precise genetic and epigenetic modifications to address the underlying causes of cardiometabolic diseases, targeting genes like PCSK9, APOC3, and LPA. Key innovations, including improved delivery methods and tissue-specific editing, will enhance the specificity, efficiency, and safety of these therapies, minimizing off-target effects and making in vivo genetic medicines a reality. Global partnerships will accelerate this effort to move breakthrough science from bench to bedside and tangibly change our standard of care for the better.”

According to a report released in December 2024, the global CRISPR and Cas gene market is expected to grow from $3.3 billion in 2023 to $8.8 billion in 2028 at a rate of 21.90%, before continuing to grow at a compound annual growth rate (CAGR) of 22.76% from 2028, reaching $24.6 billion in 2033. This suggests that CRISPR-based gene therapy will remain an extremely significant field in the biotech industry for the foreseeable future. 

Del Bourgo told Labiotech that the overall gene therapy field will likely also see growth when it comes to viral and non-viral delivery methods. As gene therapy expands, the demand for safer, more effective delivery systems is driving innovations in these areas, and advances in synthetic biology and delivery technologies are leading to more refined, customizable solutions, ultimately providing more precise and versatile options for genetic correction.

“Viral vectors, such as AAV and lentiviruses, will be optimized for safety and efficiency, while non-viral approaches, including lipid nanoparticles and electroporation, will continue to reduce immune risks and improve target specificity,” explained Del Bourgo. “This will extend gene therapy’s reach from rare disorders to more prevalent conditions, such as muscular dystrophies, hemophilia, and genetic eye diseases.”

GLP-1 drugs: Still an attractive proposition to biotechs, but challenges will mount

Since their approval, GLP-1 drugs have been a hot topic in the biotech industry. Despite the competition, startups and big pharma are still looking to create a better version of this drug class than blockbusters Wegovy and Zepbound. 

Last year, the demand for GLP-1 drugs led to widespread stock shortages, which is expected to continue to be an issue in 2025. Michael Grosberg, VP of Model N, told Labiotech that there will be ongoing tensions between branded manufacturers and compounding pharmacies, which have been in the news lately due to reports of some of them marketing and selling in-demand weight loss drugs due to the branded drugs not being commercially available. 

“…When a drug like tirzepatide is no longer on the shortage list, those taking compounded versions legally can no longer access that version and must try to get prescriptions for the branded drug,” said Grosberg. “This could reignite the shortage. Additionally, we should be prepared for more issues like contamination related to substandard compounded versions, potentially leading to a consumer backlash against compounding pharmacies.”

An article in Fierce Pharma, however, forecasts that there won’t be as many shortage issues in 2025, as both Novo Nordisk and Eli Lilly have poured billions of dollars into capacity expansions and have recently managed to largely erase their GLP-1 drugs from the U.S. Food and Drug Administration (FDA)’s online shortage roster. But, in line with what Grosberg said, Fierce Pharma’s article points out that analysts at consulting and technology firm ZS believe that there could indeed be a showdown with the compounding pharmacies that helped provide patients with a consistent supply of GLP-1 drugs when Novo and Lilly were facing shortages.

Furthermore, despite their undeniable success, some experts are wondering whether the GLP-1 drug market has reached its peak. Mizuho healthcare expert Jared Holz wrote in a note to Yahoo! Finance that it’s doubtful that “patients are seeking to lose more weight than what drugs like Zepbound and Wegovy are providing.”

While Lilly’s Zepbound provides up to 24% weight loss, Novo’s Wegovy provides up to 16%. Even Novo’s most recent clinical trial data for its new GLP-1 drug CagriSema showed just 23% weight loss, putting it just under Lilly’s ceiling for Zepbound. The company had indicated it expected higher results, and its shares subsequently plunged. 

According to Yahoo! Finance’s analysis, the question facing investors is whether or not Lilly and Novo can keep their lead in the market or if incoming competition from other players is going to dilute the market.

For now, though, investors do not seem to be put off. Just last week, London-based Verdiva Bio launched with a weekly-dosed oral GLP-1 drug, having raised an incredible $410 million in series A funding. 

Precision medicine: A key trend for biotech in 2025

Precision medicine, or personalized medicine, is rapidly transforming healthcare by tailoring treatment plans to the unique genetic makeup, environment, and lifestyle of each patient, differing from a “one-size-fits-all” approach, which often only works for certain people and certain conditions, but not others. Ultimately, this precise approach allows healthcare providers to predict which prevention strategies and treatments will work with which groups of people.

Advancements in genome sequencing technologies are helping to progress precision medicine by making it faster and more affordable to decode an individual’s DNA, allowing companies to identify genetic mutations associated with specific diseases. This is particularly evident in oncology, where more and more companies are developing targeted therapies that are designed to inhibit cancer growth based on a tumor’s unique genetic profile, for example. 

According to Nathan Buchbinder, chief strategy officer and co-founder of Proscia, precision medicine business units will gain more prominence at both biotech and pharma companies in 2025, as more organizations form them and shift work under them. These types of units include various platform, technology, and functional teams, and will increasingly influence portfolio strategy and execution. 

“As we’ve seen from some of the precision medicine business units that are already up and running, it will integrate and oversee activities across early discovery, preclinical and clinical development, and commercial to spearhead a more integrated approach that accelerates the introduction of targeted therapies to the most appropriate markets and patients. This reorganization will have as big of an impact – if not bigger – as the rise of translational medicine as an R&D group in the early-to-mid 2000s,” commented Buchbinder.

Meanwhile, Andrea Choe, CEO of Holoclara, believes that one particular area of precision medicine that will step into the spotlight in the biotech industry in 2025 is metabolomics, an emerging field that is broadly defined as the comprehensive measurement of all metabolites and low-molecular-weight molecules in a biological specimen. Building on genomics and proteomics, companies now have advanced tools and data platforms to uncover critical molecules, which Choe describes as “needles in infinite molecular haystacks.” 

“This expansion will redefine therapeutics. Rather than refining old targets, we’ll discover entirely new molecules that complement precision medicine. Just as CRISPR and GLP-1 drugs revolutionized genetic and metabolic therapies, metabolomics will further unlock novel strategies that match the complexity of human biology. The result will be more diverse, robust, personalized treatments that transform healthcare, guiding us into an era of truly customized medicine.”

So, as it gradually becomes more mainstream, it seems that precision medicine will progress even further in 2025, potentially transforming disease management across a wide range of applications.

Immunology and inflammation (I&I) expected to see continued growth in 2025

Last year saw the immunology and inflammation (I&I) sector attract a major wave of investment, as inflammatory diseases became one of the hottest areas of drug development, spurred on by an interest in novel therapies that have the potential to be more precise and powerful than existing treatments. There were several high-profile buyouts of I&I drug developers by big pharma, and multiple companies raised impressive financing rounds to advance the development of their immune-related drugs.

Natalie Dolphin, managing director of Investor Relations at HLTH Communications, said that the I&I sector is expected to continue its robust growth in 2025, driven by advancements in understanding immune system mechanisms and the development of targeted therapies. “Innovations in biologics and personalized medicine are enhancing treatment efficacy for autoimmune and inflammatory diseases, leading to increased investment and research in this area.”

In the next few years, multiple new therapies for immune-related conditions are likely to receive approval. Ebru Karpuzoglu, an immunologist trained in molecular medicine and skincare specialist, and chief scientific director and founder of AveSeena, told Labiotech in a previous article: “The recent surge of investment in the immunology and inflammation sector is poised to catalyze a significant breakthrough in therapeutic development. This influx of capital, coupled with rapid advancements in scientific understanding and technology, has created a fertile ground for innovation in the field. The convergence of these factors suggests that we are on the cusp of a new era in I&I treatments, with the potential to address a wide range of conditions more effectively than ever before.”

Valued at $97.58 billion in 2023, the global immunology market is now projected to grow from $103.18 billion in 2024 to $257.39 billion by 2032, exhibiting a CAGR of 12.1% during the forecast period. The U.S. immunology market in particular is expected to grow significantly, reaching an estimated value of $131.25 billion by 2032, driven by the surge in cases of autoimmune disorders.

M&A and investment could surge in 2025

After a downturn following the COVID-19 financial bubble between 2020 and 2022, biotech investment finally saw an upswing in 2024. 

In October last year, biotech IPO activity in the U.S. spiked for the second time in 2024, following an initial boost in Q1, largely driven by the Federal Reserve’s decision to cut interest rates. Meanwhile, looking at private funding, more than 50 companies announced $100 million-plus in private equity financing rounds in 2024, according to an article by Bryan Spielman in BioSpace. The article also noted that UBS Investment Bank stated that biotech follow-on issuance activity was up 64% in 2024 compared with 2023 and overall volume surpassed five of the last six years’ totals. 

According to Spielman, while last year did not bring the sector back to pre-pandemic levels of investment, he predicts that it may reach that milestone in 2025, as activity continues to increase. Another important factor, he noted, is that the incoming Trump administration will likely be more open to M&As than the Biden administration has been.

Dolphin agreed that the biotech industry is likely to witness a surge in M&A activities in 2025, as companies seek to diversify their portfolios, access new technologies, and expand their market reach. “Smaller biotech firms with innovative solutions may become attractive acquisition targets for larger pharmaceutical companies aiming to bolster their pipelines and maintain competitive advantage.”

Artem Trotsyuk, operating partner at LongeVC, said that there is in fact now a trend of bigger companies buying smaller biotechs to get new medicines and technologies, especially when their old drug patents run out. “Even medium-sized companies are now buying other companies, showing this trend is growing.”

In terms of the areas that investors might be taking bets on in 2025,  Katrina Rice, chief delivery officer of Biometrics Services at eClinical Solutions, believes that we will see more investments in rare and specialty medicine. “The aftermath of the IRA’s drug pricing negotiations and the Rare Disease Voucher Program will drive a shakeup in investment strategies. Investors will adopt a more fearless approach, taking calculated risks on specialty and rare disease R&D where breakthroughs can yield unmatched returns. This shift will fuel innovation in areas once considered too niche or high-risk.”

We will have to wait and see what happens, but there does seem to be a certain buzz in the biotech industry of late with regard to investment prospects, and it seems to be a perfect time for new startups to come into the game. 

The path to better clinical trials in 2025 

Given her position at eClinical Solutions, Rice helped us understand which clinical trial trends would likely take place in 2025. She noted three distinct trends:

• The FDA’s Diversity Action Plans will break down barriers to inclusive trials: With the FDA’s Diversity Action Plans raising the stakes, sponsors will finally abandon outdated recruitment models. “By forging bold alliances with urban leagues, faith-based organizations, and HBCUs, they’ll tackle entrenched issues of accessibility and trust, delivering trials that are not only faster but also far more representative – and transformative for patient outcomes,” explained Rice.

• Predictive analytics will emerge as biotech’s superpower: Here, Rice said that AI will “leap from buzzword to backbone,” and we can expect predictive analytics to pinpoint high-impact patient groups, streamline complex trial designs, and catch safety risks before they escalate. “AI will cut inefficiencies, align trials with real-world needs, and ultimately make precision medicine more than just a lofty goal.”

• RBQM will set the new standard for trial operations: Risk-based quality management is evolving into a critical strategic tool. In 2025, clinical teams will integrate AI-driven RBQM solutions to unearth hidden risks, safeguard patient safety, and elevate data quality. “This isn’t just operational efficiency – it’s a new standard of excellence for trial execution,” said Rice.

Michel van Harten, CEO of myTomorrows, concurred with Rice’s opinion that clinical trials will focus more on inclusion in 2025, saying that emerging strategies for this will include decentralized trial designs that minimize geographic and socioeconomic barriers, along with enhanced community engagement through local trial sites and partnerships with trusted patient advocacy groups. Biotech companies are also implementing multilingual resources, such as patient navigator services, and providing cross-border travel support to improve participation from underrepresented groups. 

“Investments in diverse investigator teams and inclusive study designs aim to build trust and produce more representative trial outcomes. These efforts highlight a broader industry shift towards delivering equitable healthcare solutions and fostering greater inclusivity in medical research,” said van Harten.

Meanwhile, Brant agreed that AI will be significant for clinical trials in 2025, noting patient recruitment as a key area for the technology to improve outcomes. “For instance, AI has proven its ability to effectively pre-screen participants by comparing prospective participant data against trial requirements. It’s also able to scale outreach to identify untapped audiences and make sure different demographics see the messages that are right for them. This not only ensures that clinical trials are fully populated – and faster – but also that trials can significantly increase the diversity of patients.”

2025: An interesting year for the biotech industry, with political shifts potentially playing a key role

Whether we are talking about the evolution of AI, a rise in M&As and investment, or the potential of precision medicine and CRISPR, the trends in this article are set to play a key part in shaping innovation in the biotech industry in 2025.

It is also worth keeping an eye on the political landscape and its potential impact on the biotech industry, particularly in the U.S., as the country gets ready to welcome Donald Trump in for his second tenure as President, with some highly contentious healthcare picks.  

Dolphin agreed that the recent presidential election is anticipated to have an effect on the biotech industry, stating that the appointment of Robert F. Kennedy Jr., known for his skepticism towards vaccines, as the head of the Department of Health and Human Services (HHS), has raised concerns within the pharmaceutical sector. “Kennedy’s potential policy shifts could affect vaccine development and approval processes, introducing uncertainties for biotech companies involved in immunology and inflammation research.”

Additionally, as touched upon previously, the new administration’s stance on healthcare regulations and drug pricing may influence M&A activities, as companies reassess strategies in response to potential policy changes. The industry’s ability to adapt to these developments will be crucial in navigating the evolving landscape.

Furthermore, Kennedy’s advocacy for the legalization of marijuana and psychedelics could open new avenues for biotech companies specializing in these areas. “Companies like Enveric Biosciences, which are developing non-hallucinogenic psychedelic treatments, may find a clearer pathway to FDA approval and commercialization under policies that favor such innovations. This shift could lead to increased research and development in alternative therapies, potentially transforming treatment paradigms for various mental health conditions,” said Dolphin.

Looking at the overall outlook for the global biotech market in 2025, however, there is a cautious optimism in the air: ​​it is projected to expand from $483.0 billion in 2024 to $546.0 billion by 2025, reflecting a robust compound annual growth rate (CAGR) of approximately 13%.

So, whatever happens politically, one thing is for certain: 2025 is set up to be a very interesting, and potentially crucial, year for the biotech industry, which is bound to once again provide patients with more life-changing – and life-saving – treatment options.

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