USA – MASSACHUSETTS Trends and Developments Contributed by: Patti Melick, Toby Bannon, Katherine Rubino and Kelsey Loomis, Wiggin and Dana LLP
midwifery care, birth centers and postpartum mental health services. On the research side, in June 2025, the Healy-Driscoll Administration and Massachusetts Life Sciences Center (MLSC) awarded USD3.7 mil- lion to support 16 women’s health innovation research products. Overall, Massachusetts maintains a strong set of companies focused on women’s health who contribute to the increased innovation and focus on women’s health in the life sciences industry broadly. AI in Drug Research and Development The influence and impact of artificial intelligence (AI) in drug development has been transformative over the last few years and deal-making is reflected in each step of the drug research and development process, including partnerships for discovery services, AI-ena- bled platforms and services, and deploying AI for use in clinical trials. The biotechnology AI industry has garnered some of the largest financings over the last year. Industry-wide, there were fewer financing deals with more selectiv- ity, but mega rounds persisted and AI biotechnology companies benefitted from this mega round trend. Noteworthy AI deals in the industry included Isop- morphic Labs’ USD600 Million capital raise in March 2025, Pathos AI’s USD365 Million Series D round in May 2025, and Boston-based Insilico Medicine’s USD123 Million Series E in June followed by its IPO on the Hong Kong exchange, which raised a total of HKD2.277 billion (approximately USD293 million). According to PitchBook, over the past 12 months (article published in November 2025), VC investment in AI drug development totaled USD3.2 billion across 135 deals and AI-native biotechnology companies (AI- native biotechnology companies are defined as a bio- technology company that utilises AI as a fundamental piece or element of their preclinical or clinical develop- ment process and main source of differentiation) had a nearly 100% valuation premium in 2024 significantly higher than the broader biopharma median highlight- ing a “frenzied AI investment environment and inves- tor conviction in the ability of AI integration to drive greater R&D efficiency and improve clinical success”. AI platforms that aim to derisk drug discovery and increase efficiencies in clinical timelines and success rates in clinical trials, offer promising solutions to sig-
nificant challenges faced by the industry. Notably, in 2025, 87% of life sciences researchers reported using AI for work-related research tasks, an increase from 75% in 2023. [Artificial Intelligence (A.I.) in Life Sci- ence: New Survey of 408 Researchers Reveals Split Sentiment, Surging Adoption, and Rising Trust Bar- riers ] In addition to the noteworthy referenced financings reference above, in 2025 and early 2026 a number of significant big pharma partnering and M&A deals with AI-focused biotechnology companies were announced, including Eli Lilly’s recent (January 2026) USD1 billion collaboration with Nvidia for the develop- ment of an AI co-innovation lab focused on AI-driven drug discovery, and its USD1.3 billion deal with Super- luminal Medicines for the discovery of small-molecule drugs for cardiometabolic disorders; and AstraZene- ca’s acquisition of Boston-based Modella AI (January 2026) to integrate oncology research and develop- ment to support clinical development and biomarker discovery and its collaborations with BostonGene and Algen Bio in the oncology and immunology space. Massachusetts is leading efforts to integrate AI into pharmaceutical development. The Massachusetts AI Hub aims to establish the state as a global leader in AI innovation with a focus on collaboration between government, industry, emerging companies, and aca- demia. The AI Hub will leverage resources from the Mass Leads Act to support AI initiatives with the aim for Massachusetts to become a global leader in AI development. AI has become a workforce requirement in the Bay State, not just a niche skill. For instance, MassBio and Google hosted an AI for Drug Discovery training and Merck, J&J, and Eli Lilly rolled out internal generative AI platforms and training programmes. AI in drug development is likely to continue to increase throughout the industry as evidenced by the financ- ings and M&A activity in 2025 as well as the utilisation of AI platforms and tools generally in development. Cell and Gene Therapy: From Miracles to Milestones The cell and gene therapy space continues to show- case potential breakthrough science while navigating the challenges of a complex development, manufac- turing and commercial landscape. As these therapies
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