What’s on the industry’s horizon?

In 2024, more people than in any previous year voted in elections across the globe, bringing in new governments in many countries. As such, 2025 will be a key year to see how new administrations prioritise the life sciences and what impact any new policies may have. 

In the UK, the new Labour government has committed to invest £520m in life sciences manufacturing and at least £40m in proof-of-concept funding for university spin-outs over the next five years. Investment in the earliest stages of technology validation will always require governmental support and the £40m is indeed welcome. However, it is a tiny sum in the context of UK academia, especially when compared with places like Belgium and the Netherlands, which spend five times as much on this early-stage gap. Much (worthwhile) attention has been paid to the scale-up gap and the creation of pension megafunds to address it, but we need support across all stages of our innovation continuum to deliver sustained growth for the UK.

Maintaining the R&D tax credit rate was also useful in providing industry with some certainty, but our rates still lag behind Australia, France and Spain. Combined with the recent changes to medicine pricing calculations, this is making the UK appear as an increasingly hostile place to develop, launch and sell drugs. We need entrepreneurs to stay here, businesses to do R&D here, and investors to make money here.

Across the pond, Trump’s election threatens to usher in a new era of US protectionism in 2025. If the president-elect's love for tariffs is borne out, it may become difficult for UK medtech companies to break into the US market. The Inflation Reduction Act continues to shape investors' attitudes towards biologicals, but Trump is likely to roll at least some of these measures back. Although the BIOSECURE Act, which would prevent federal contracts linked to some Chinese biotechs, has been delayed, the Trump administration could revive it. This may have a knock-on effect for Cancer Grand Challenges, which is jointly funded by the US National Cancer Institute.
 

The growing focus on commercialisation within UK academia is likely to have a significant impact on translation in cancer research in the coming years. As more universities recognise how spin-out formation and industry partnerships can maximise the impact of their discoveries and generate income for future research, they are putting a greater emphasis on translation. Nevertheless, ongoing funding challenges in academia could limit exploratory or early-stage research, even as translational opportunities expand in areas like AI-driven diagnostics, personalised cancer vaccines, and multi-modal therapies. 

The push for translation will require greater interdisciplinary collaboration and investment to bridge the gap between lab discoveries and clinical application. This is extremely important to advance academic discoveries, which are very early stage and require support to reach the maturity needed to attract interest from a partner or investor. It is crucial for academic institutions and facilitators like us to consider the right level of resource allocation to ensure we can maximise the impact of academic research. 

After a tough few years for the pharmaceutical industry, defined by widespread layoffs, the downsizing seems to be finally slowing down. There is now a lot of excitement about the opportunities in GLP-1 drugs used to treat obesity and diabetes. As a result, oncology is no longer as dominant as it was, with sector focus and funding shifting to these rapidly growing therapeutic areas.

To compete and succeed, oncology companies will need either drugs that are used across a broad spectrum of indications, or high-impact drugs in smaller indications. Cancer Research UK and Cancer Research Horizons are well-placed to be at the forefront of this trend given our access to a stellar scientific and clinical network.  

There will also be plenty of opportunities in AI. Early detection and diagnosis tools are increasingly using machine learning models, which need to be trained on well-annotated datasets incorporating biological and clinical data. As such, the value of these datasets will continue to rise. The researchers and clinicians in our network produce a huge amount of high-quality data, and we are in a good position to help maximise its impact through collaboration with industry.

In a world where disruptive technologies and big data are driving innovation and accelerating drug discovery from idea to patient, the role of mechanistic insight can often be overlooked, or even dismissed as ancient history. However, understanding how potential drugs interact with their targets, and for how long, is critical to making more informed dose predictions and improving translation to patient benefit.    

Furthermore, while more companies are using machine learning to enhance their drug discovery efforts, such as accelerating design–make–test–analyse (DMTA) cycles, they are currently training their models using mostly simple data, captured at a specific moment in time. They will need to use more complex data – including insight gathered through classical pharmacology and enzymology – to enhance their models’ predictive powers.   

Unfortunately, as job losses swept across the pharmaceutical industry in 2024, a number of companies eliminated roles held by pharmacologists and enzymologists. As the rate of layoffs is likely to slow down in 2025, however, I hope that that the value of these roles will be recognised once more as key to helping to identify novel therapies, and the mechanistic insights that they can provide will undergo a renaissance.

Despite growth in the advanced therapy pipeline in recent years, the bulk of FDA approvals in 2023 and 2024 were small molecule and antibody therapies: 13 small molecules and nine antibody therapies, of which five are bispecific T-cell engagers, and, despite huge industry interest, only one new antibody drug conjugate (ADC).

However, the diversification of therapeutic sub-modalities that we have witnessed in recent years is now feeding through to the clinic. In the small molecule class, these include targeted protein degraders, some of which are now moving through Phase 3 trials.  

The ongoing investment in ADCs, with novel targets, linkers, payloads and tuneable antibody–drug ratios will continue to build the pipeline in this space, with several new approvals anticipated before the end of 2025.  

There are a vast number of CAR-T trials ongoing and that will continue, but challenges of cost, time and the ability to address solid tumours remain. In vivo CAR-T is an emerging field that can address some or all of these challenges through targeted gene therapy. Trials initiated in 2023 and 2024 will begin to readout as early as 2026.  

Finally, personalised cancer vaccine approaches, built on promising early trials in melanoma and pancreatic cancer from the companies that spearheaded the COVID-19 vaccines, are entering pivotal trials and we may see some early readouts by the end of next year. 

Overall, it is an incredibly exciting time for novel cancer therapies, with a plethora of new modalities and sub-modalities now well-established in clinical trials, while increased disease understanding is opening up new opportunities for tried and tested small molecule and Ab modalities. 

Oncology is set to remain a high-priority area in 2025, and I am cautiously optimistic about an improving investment climate. This will be driven by sustained enthusiasm for cutting-edge technologies in areas of high interest, particularly antibody drug conjugates (ADCs) and radiopharmaceuticals. 

ADCs continue to generate excitement because they combine the specificity of antibodies with potent cancer-killing payloads. After a year of investment in this space – including our portfolio company Myricx Bio raising £90m in one of the largest Series A rounds in European biotech – I expect interest to continue into 2025, particularly in novel payload technologies that enhance efficacy and specificity.  

The recent flurry of deals in radiopharmaceuticals, which offer improved safety over traditional radiotherapy through targeted delivery, will continue to drive investment in this area. Following big pharma acquisitions of RayzeBio, Fusion, and Mariana in 2024, earlier backers will have received a return on their investments, increasing the appetite for more.

There is also growing excitement around bispecific antibodies, which can simultaneously bind two targets on the same cell to create varied mechanisms of action. The Keytruda-beating clinical data from Akeso and Summit’s ivonescimab has generated significant interest for PD-1/VEGF bispecifics in particular. 

Outside of therapeutics, AI and digital health will continue to draw investment, especially in new technologies that could deliver transformational impact on drug discovery, development and healthcare.