Life Sciences 2025 2H Trends: Regulations, Precision Medicine, Oncology Investment
By Kristin Pothier and Amy Matsuo
As we find ourselves at the midpoint of the year, now is a perfect time to reflect on not only what has transpired thus far but more importantly what are some trends to focus on for the remainder of 2025 and beyond in life sciences.
Indeed, the first half of the year has brought about a continued rapid pace of change propelled by the advancements of generative artificial intelligence (GenAI) and a challenging M&A environment that has carried over from 2024.
While much uncertainty persists heading into the second half of the year, here are a few trends of note to watch for:
An Evolving Regulatory Landscape
We’ve all heard the expression that ‘change is inevitable’ and that sentiment certainly holds true when assessing the regulatory landscape. In conversations with C-level leaders, one of the main themes emerging in the first half of the year is that the pace of policy changes brings a sense of constant uncertainty; one that is necessitating robust monitoring processes for organizations.
Significant changes in policies and regulations, including drug pricing and deal activity, as well as changes in funding models and the impacts of tariffs on healthcare and life sciences are just some of the regulatory items to keep an eye on for the second half of the year.
Another area to keep an eye on is increased coordination among U.S. regulatory bodies and divergence from international entities. Expect to see a focus on managing impacts of global divergence, especially for multinational companies (for example, withdrawal from the World Health Organization).
As we move ahead in 2025, U.S. life sciences is still fighting for the regulatory clarity and balanced oversight needed to protect patients and drive innovation. At the same time, companies as noted previously are contending with federal policy shifts and tariff threats that hit the industry at its core. It’s a high-stakes environment that demands the sector not only stay informed, but several steps ahead.
Precision Medicine Reshaping Research And Development Models
Precision medicine (PM) continues to reshape not just the future of healthcare but also life sciences organizations as well. As the sector continues to focus on PM drugs and devices to ensure optimal outcomes for patients, it is also having to reassess how research and development (R&D) operates today. As more therapies become biomarker-driven, development teams face added complexity that requires new ways of thinking, working, and decision-making. Across the sector we’re seeing standardizing assessment criteria that emphasizes developing consistent inputs across scientific, clinical, regulatory, commercial, and financial domains to determine if and when a diagnostic is required for a given asset. Another trend is the push for enabling data driven decision making by integrating informatics and data science capabilities early, to refine biomarker strategies and accelerate insights across development phases. These trends are just the beginning of the proverbial boulder rolling faster and faster downhill. As we progress through the year, expect to see a continued evolution in the R&D process across life sciences fueled by the expansion and focus of PM.
Private Equity Focus On Oncology
Last but certainly not of least importance is where to look for private equity (PE) investment across the second half of the year. One of the main areas to watch is oncology. Despite a slowdown in R&D spending and uncertainty regarding government funding, private equity (PE) continues to be more interested in clinical solutions given the increasing complexity of trials for new molecular entities (NMEs) discovered over the last decade of oncology innovation. Investors are aiming to capitalize on medical affairs and commercialization to bring therapeutics to patients globally. PE aims to capitalize on industry interest and a reliance on outsourced service providers to bring life-changing therapeutics to patients globally, doubling down on innovation in real world data, specialized hardware and software solutions, and manufacturing for advanced therapeutics. While much uncertainty remains regarding macroeconomic trends and in particular monetary policy direction, PE is continuing to strategically assess areas of investment across life sciences as they push aside short-term concerns while keeping an eye on longer term priorities.
About the Authors:
Kristin Pothier is the National Sector Leader for Life Sciences at KPMG US.
Amy Matsuo, is the Regulatory Insights Leader at KPMG U.S.
The views expressed are the authors alone and do not necessarily represent those of KPMG LLP.