2025 Investment to Swing Toward I&I, Obesity, More: Experts

Therapeutic mainstays oncology and neuroscience have dominated the headlines—and reeled in serious investment dollars—over the past couple of years as novel treatments for Alzheimer’s disease, schizophrenia and several cancers have hit the market. And those spaces continue to attract plenty of attention, as highlighted by Johnson & Johnson’s $14.6 billion purchase of leading neuropsychiatric firm Intra-Cellular Therapies to kick off last week’s J.P. Morgan Healthcare Conference. But other early 2025 investment announcements suggest the tide may be turning toward obesity and immunotherapy and immunology, among other surging spaces.

Last year, Andrew Pannu, biotech executive and founder at Sleuth, told BioSpace that immunology and inflammation (I&I) could be a “a particularly attractive space” for biopharma. With the global immunology market projected to hit more than $257 billion by 2032, pharma sees the potential revenue streams. Last year saw myriad high-value deals, and with last week’s $1.7 billion commitment from Gilead Sciences for LEO Pharma’s small molecule oral STAT6 program targeting inflammatory diseases, Pannu’s prediction could be coming to fruition.

And there’s a cell therapy twist. With the novel approvals of Iovance’s Amtagvi and Adaptimmune’s Tecelra, cell therapy came into its own in 2024, and now the sector has autoimmune disease in its sights.

Much of the excitement stems from a series of small studies led by Georg Schett of the German Center for Immunotherapy, including one published in February 2024 showing that eight systemic lupus erythematosus (SLE) patients treated with CAR T therapies had achieved remission at 15 months.

“The fact that we could potentially completely reprogram the immune system to change or cure an autoimmune disease like lupus is an utter miracle,” Christiana (Chris) Bardon, managing partner of MPM BioImpact, told BioSpace.

Pannu agreed, saying, “I think that kind of kicked off a wave of excitement. You saw a ton of cell therapy companies kind of rebrand overnight and start to share the space.”

For Graig Suvannavejh, senior biopharmaceuticals and biotechnology equity research analyst at Mizuho Americas, this represents a broader shift. “I think you’re going to continue to see a lot of interest in the application of immuno-oncology and those drugs that have been developed for cancer . . . into autoimmune disease,” he told BioSpace.

This momentum is starting to extend to T cell engagers (TCEs), Pannu said, noting recent M&A action in the space. In October 2024, GSK paid $300 million to acquire a dual CD19 and CD20-targeted TCE from Chimagen Biosciences aimed at SLE and lupus nephritis, among other autoimmune indications. The British pharma followed that up this month, co-founding Ouro Medicines, which raised $120 million to leverage TCEs targeting immune-mediated diseases. Also this month, Candid Therapeutics inked a deal with WuXi Biologics worth a potential $925 million for a preclinical trispecific TCE aimed at autoimmune and inflammatory diseases.

In oncology, too, analysts are bullish on TCEs—particularly when it comes to targeting solid tumors. “I think we’re also seeing a lot of enthusiasm now again for T cell engagers for cancer,” Bardon said. TCEs got off to a “little bit of a rough start,” she added, as they were difficult to make and use in clinical trials. “But I think we’ve finally figured that out in terms of how to dose patients, how to step-dose patients and titrate them up to their target dose.”

Another hot commodity throughout 2024, the obesity space shows no signs of slowing as drug developers continue their quest to break through against Novo Nordisk and Eli Lilly’s dual stronghold on the weight loss market. Earlier this month, Verdiva Bio launched with $411 million in an oversubscribed series A to develop next-generation oral and injectable treatments—besting fellow obesity player Metsera’s $290 million in April 2024. Meanwhile, Metsera filed for an IPO on Jan. 10.

Second-generation GLP-1 drugs—specifically orally administered options—as well as non-GLP-1 mechanisms will command attention this year, Suvannavejh said, noting the cannabinoid receptor 1 (CB1) class and muscle-sparing mechanisms of action as particular areas of interest.

Bardon said GLP-1 drugs and GLP-1 combinations with GIP analogs and amylin are “really kind of in their heyday,” noting the maturation of this class in terms of efficacy and outcomes. Despite this, she said future innovation is needed. “We would like to see drugs that have oral dosing, which can achieve similar efficacy.” Bardon also highlighted CB1s, as well as therapies targeting mutations in the INHBE gene and myostatins to address muscle wasting.

Given the potential for $50 billion in annual revenue, “I think we’re just going to continue to see a lot of activity and a lot of ongoing acquisition in this space as well because every major pharma company really needs to be in this space to get a part of that pie,” she predicted.

Further down the list, the experts diverged in their opinions of which therapeutic areas would command more investments in the near term, indicating a potentially broad therapeutic focus in 2025.

Bardon spotlighted work being done in neuromuscular diseases. “We’re seeing so much incredible innovation in the fields of Duchenne muscular dystrophy, myotonic dystrophy [and] even some of the newer ones that we’ve never seen treatments [for] before,” such as facioscapulohumeral muscular dystrophy (FSHD), she said.

Indeed, the past couple of years have seen meaningful progress in Duchenne muscular dystrophy (DMD), with the June 2023 approval of Sarepta’s Elevidys as the first-ever gene therapy for the disease. In fact, three new DMD drugs have hit the market over the past two years—Elevidys, ITF Therapeutics’ nonsteroidal treatment Duvyzat and Santhera Pharmaceuticals and Catalyst Pharmaceuticals’ novel corticosteroid Agamree—and up-and-coming therapies from Regenxbio and Dyne Therapeutics are sparking further excitement. The one blight on this momentum was the Phase III failure of Pfizer’s gene therapy fordadistrogene movaparvovec in June 2024.

Meanwhile, Suvannavejh said that kidney diseases, “which haven’t been hot for a long time,” could be an increased area of focus for industry and investors. “It got interesting last year, and I think it’s going to continue to be interesting this year,” he said, suggesting that this is another space where immuno-oncology drugs could be co-opted. Early-year action also supports this prediction, with nephrology-focused Maze Therapeutics launching the 2025 IPO class with an unspecified bid on Jan. 7.

Another trending space noted by Suvannavejh, cardiovascular disease, has also started the year strong with the launch of Kardigan, which raised $300 million in Series A funds to support its mission of making cardiovascular disease curable and preventable. GLP-1s and gene therapies are also making headway in this area.

Overlaying these therapeutic focuses, Pannu noted a couple of overarching trends the industry can expect this year. The first is a continuing uptick in assets being licensed from China. Pannu pointed to a recent Stifel report showing that one-third of external molecules brought in by Big Pharma are now coming from China—up from zero in 2019.

“There was a time five years ago when no one trusted data [that had] come out China . . . I think that is largely seeming to go away,” he said. Today, a U.S.-China duopoly is evolving. “You can’t operate globally unless you consider both.”

This trend is again evidenced by recent deals, including Roche spending potentially $1 billion to license Innovent’s DLL3-targeted antibody-drug conjugate (ADC) and GSK’s ADC licensing pacts with Hansoh Pharma and DualityBio, worth $1.7 billion and $1 billion, respectively.

Pannu also highlighted the duopolies that have developed in several therapeutic spaces, specifically noting Novo Nordisk and Eli Lilly in obesity and diabetes, Lilly and Biogen/Eisai in Alzheimer’s disease, Gilead and GSK in HIV and, in depression, AbbVie and Intra-Cellular Therapies, the latter of which was scooped up last week by J&J for a cool $14.6 billion—by far the biggest biotech acquisition in more than a year.

These duopolies “benefit a lot from the existing payer incentives that make it difficult for later incumbents to kind of push those [companies] out,” he said. “It almost feels like if you’re not the first or second player in a lot of spaces, it’s really, really tough.”

He likened the current obesity market to that of PD-1 inhibitors in the 2010s. “It’s almost one of those things where investors want everyone to have an obesity play, but it doesn’t make sense for you to be the ninth company in obesity.” The alternative argument is that these second-generation assets could be the foundation for potential combinations, he said. “I think that that same conversation is going to happen a lot more across a number of therapeutic areas.”