AI in Pharma and Biotech: Market Trends 2025 and Beyond

Key Takeaways:

• AI powers digital twins of cells/molecules, speeding early drug discovery and cutting trial-and-error work.
• Biotech firms use AI in trials to target patients more accurately and predict side effects, boosting safety and speed.
• AI, genomics, and gene therapy are expanding biotech’s market and unlocking new routes to growth.

How Artificial Intelligence is Shaping the Future of Biotechnology

Biotechnology has long stood at the intersection of science and innovation, driving advances that transform human health. But in 2025, a new catalyst is redefining the pace and potential of the field: artificial intelligence. Across genomics, drug discovery, and personalized medicine, AI is enabling biotech companies to uncover insights that once took years, now in days or even hours.

The global biotech industry continues to expand, supported by aging populations, growing healthcare needs, and breakthrough therapies. Yet what’s igniting fresh excitement is not just scientific progress, but computational power. By combining biological data with AI, biotech firms are decoding disease mechanisms at unprecedented speed, redefining what’s possible in healthcare innovation.

Biotechnology Market Size 2025 to 2034 (USD Trillion)

Source: Precedence Research. Data as of 11/2025. For illustrative purposes only. Not intended as a forecast or prediction of future results.

AI is Taking Over Every Step of Drug Discovery

The convergence of biology and machine learning is transforming every stage of the biotech value chain. AI models can now predict how molecules will interact with disease targets, significantly shortening development timelines and reducing costs. Genomic analysis, once a massive computational challenge, has become faster and more precise, enabling researchers to identify new genetic drivers of disease.

Industry leaders across the biotech landscape are already applying AI at scale to accelerate discovery, enhance precision, and reduce development costs. Advanced modeling and machine learning tools are helping researchers predict molecular interactions, identify new therapeutic targets, and optimize clinical trial design, transforming drug development from a process of trial and error into one of data-driven insight.

Together, these advancements mark a clear shift from trial-and-error experimentation to a new era of data-driven precision. As artificial intelligence becomes foundational to research and development, biotechnology is evolving into a discipline where insight and innovation move at the speed of computation.

How AI is Already Changing Drug Development

Artificial intelligence isn’t replacing biology, it’s amplifying it. By compressing research cycles and improving predictive accuracy, AI has the potential to boost success rates in drug development, historically a costly and uncertain process.

Across the industry, researchers are building “digital twins” of molecules and cells to simulate behavior before entering the lab. AI-driven tools are also improving clinical trial design by identifying optimal patient cohorts and predicting adverse reactions earlier. The result is reduced risk, greater efficiency, and a faster path from concept to clinic.

AI Impact on Clinical Development

Source: McKinsey & Company.

Recent studies suggest that AI is already driving measurable efficiency gains across nearly every stage of development, from protocol design to regulatory submission. As these technologies mature, they are set to transform how biotech companies innovate, operate, and grow.

Why BBH is Positioned for the AI-Biotech Convergence

The convergence of artificial intelligence, genomics, and gene therapy is shaping one of the most powerful innovation trends in healthcare. As AI expands the addressable market for biotech firms and accelerates time from concept to clinic, the industry is entering a new phase of productivity and profitability, setting the stage for renewed investor opportunity. Within this transformation, VanEck’s Biotech ETF (BBH) is positioned at the forefront. The fund’s holdings include companies pioneering breakthrough therapies while leveraging AI to accelerate research, improve precision, and unlock new frontiers in personalized medicine.

Top 10 Holdings

As of October 31, 2025. These are not recommendations to buy or to sell any security. Securities and holdings may vary.

Across BBH’s holdings, innovation is compounding. Amgen is expanding its research pipeline through AI-driven molecular modeling; Vertex is harnessing machine learning to advance gene-editing technologies; Regeneron is using genomics-based AI to decode complex disease mutations faster than ever; and Gilead Sciences is applying AI to uncover novel therapeutic strategies in virology and oncology. Together, these leaders exemplify how artificial intelligence is transforming biotechnology from experimentation to foresight and precision.

With its focus on established innovators, BBH provides exposure to companies with strong balance sheets, proven development capabilities, and deep data ecosystems, qualities that are increasingly critical as AI becomes central to biotech’s evolution.

AI Accelerating the Next Generation of Medical Innovation

Biotech’s story has always been one of discovery. Now, with artificial intelligence, that story is accelerating. Algorithms are helping scientists predict, model, and test with unprecedented speed and precision, unlocking therapies that were once beyond reach.

For investors looking to participate in the next generation of medical innovation, VanEck’s Biotech ETF (BBH) offers a focused, research-driven way to do so. The fund sits at the forefront of the AI revolution in healthcare, providing targeted exposure to companies leading this transformation. Tracking the MVIS^® US Listed Biotech 25 Index, BBH captures the performance of firms driving advancements in genetic analysis, diagnostic innovation, and the development and commercialization of next-generation therapies.