Summary: Dr. Andrew Lewis, Chief Scientific Officer at Quotient Sciences, examines trends and news that shaped drug development in 2025. He highlights how global policy changes, accelerated regulatory frameworks, and rapid advances in artificial intelligence reshaped R&D productivity, clinical trial design, and decision‑making. Dr. Lewis discusses how AI‑enabled modeling, data integration, and automation are redefining early‑phase development and improving the speed and efficiency of taking new therapies to patients.
One thing that has been a constant through my career has been the ever changing landscape of our industry, and when I look back at 2025 there have been some huge shifts fueled by the macro environment, the rise of digital technology and capital markets that will no doubt have significant implications for years to come.
With the USA as the largest pharmaceutical market, perhaps the most significant cause of change has been the policies of the Trump administration designed to protect the US industry, reduce healthcare costs and increase resilience. The pharmaceutical industry responded rapidly with around $360 billion of investment committed to build manufacturing capacity by various companies and drug pricing deals made on both sides of the Atlantic. One policy that is likely to have significant long term implications is the reduction in the NIH budget by $18 billion (40%). The NIH is the world largest funder of basic science and I would expect not only will it reduce scientific discoveries, and the potential creation of new biotech companies, but will also have a significant impact on the development of new talent.
While there has been some recovery and optimism in biotech funding it is far from the heights of 5 years ago and it remains a challenging funding environment. Even so, there seems to be a trend for fewer companies to raise larger investments with several firms securing over $100 million each this year - such as Braveheart Bio, Pelage Pharmaceuticals, and RayThera – so there is still an appetite to fund the most promising innovations. One development this year I found particularly striking has been the rise of the Chinese biotech industry. A report from Jefferies issued in July showed that China represented 32% of outlicensing biotech deal value in Q1 2025, up from 21% in 2024-2023. Since 2022, biotechnology companies in China have developed 639 first-in-class drug candidates, a 360% increase from 2018-2021. The country has started more clinical trials than any other country this year, surpassing the USA for the first time and it is estimated that a third of the clinical trials conducted globally in 2024 were in China. This trend is reshaping the entire biotech landscape, and its effects may be long-lasting.
Above all, for me 2025 stands out as the year of AI. Whilst it has been already used for many years in drug discovery – and we have supported the development of multiple compounds discovered using AI – this year has seen its applications expand throughout the drug development process. From 2026-2022, the US FDA received more than 300 applications that incorporate AI or ML in drug development; over 90% of those came in the past two years and most were for the use of AI in clinical development.
Here at Quotient Sciences, we've just announced a strategic partnership with Intrepid Labs building on a long-standing collaboration. Intrepid Labs’ technology uses active learning with Bayesian optimization to learn the relationship between formulation composition and performance. This means it can learn on relatively sparse data sets, so is ideal for early development and perfectly synergizes with our Translational Pharmaceutics platform. In our testing to date it reduced the number of formulations screened to obtain target in vitro performance by 30 – 50% - reducing API demands in early development, and reducing time spent in formulation development. Furthermore, it effectively builds an in silico model of the relationship between composition and performance in real time to enhance data-driven decision making. In 2026, we plan to further explore the potential of this technology and how it complements our established modelling and simulation capabilities with select clients.
For all its benefits, I am reminded that the successful use of AI in drug development is not a magic solution, nor a complete replacement for human decision-making, innovation, and creativity. As presented by Christine Allen, CEO and Founder of Intrepid Labs, and myself at AAPS in San Antonio, TX, the effective application of AI necessitates deep domain expertise, high-quality data quality input into tailored algorithms, and thorough experimental validation. While AI acts as a powerful catalyst to advance scientific innovation, the knowledge and judgment of the individuals and teams implementing these tools remain essential for formulating relevant questions, validating output, and interpreting predictions.
The evolution of the pharma/biotech landscape we have seen this last year reveals some underlying structural shifts that have been building up over several years and accelerating innovation that may well have revolutionary impact on the way new medicines are developed.
But as we move into the new year I’m reminded of a quote, I think from Socrates, that said, “The secret of change is to focus all of your energy, not on fighting the old, but on building the new.”
Wishing you all a very happy and prosperous new year.