What is driving renewed interest in small molecule therapeutics — and how is it shaping investment?

Renewed interest in small molecule therapeutics has been driven by several factors, but scientific innovation and the emergence of novel modalities have been key to driving the resurgence. Advances, particularly in artificial intelligence (AI)-driven drug design and new synthetic technologies in discovery and manufacturing, have helped to enable faster discovery, with fewer, better-informed design–make–test–analyze cycles and safer, more scalable drug development. The breadth of small molecule targets has also significantly expanded, aided in part by advances in proteomics and genomics; protein degraders, molecular glues, and RNA targeted therapies are increasingly being pursued, allowing access to previously “undruggable” space.

The emergence of biologics, cell/gene therapies, and mRNA platforms have undoubtedly revolutionized treatment for many diseases. However, small molecules continue to benefit from higher patient convenience, wider therapeutic potential, lower manufacturing risk, clearer regulatory pathways, and a broader global reach, particularly into emerging markets where affordable/accessible treatments are sought.

From an investment perspective, these benefits and technological advances have led to increased confidence in the ability of small molecule therapies to deliver a return on investment. Venture capital funding has been a key funding source for small molecules in the recent past, which in addition to funding from government grants, charitable foundations and philanthropic sources, among others, has seen investment in small molecule therapeutics generally increase over the last 10 years; albeit with peaks and troughs, highlighting that more still needs to be done to further shorten development timelines and improve clinical translation in order to ensure continued investment in small molecule therapies.

Small molecules offer some advantages over biologics that continue to make them an attractive modality. Small molecules readily enter cells, traverse the blood–brain barrier, and modulate intracellular targets that large biologics cannot reach. Small molecules are also compatible with oral dosing, and their manufacture is typically cheaper than expressed protein manufacture.

What is new is the convergence of these strengths with advances in biology and medicinal chemistry. These advances are unlocking targets that were historically considered inaccessible to small molecules. For example, bifunctional chemotypes, such as molecular glues and protein degraders, wherein a synthetic molecule is able to bind two proteins simultaneously for a therapeutic effect. While bispecific biologics able to similarly engage two proteins have been around for a while, they are difficult to manufacture and often have poor metabolic profiles

Another new target for small molecules is RNA. Investigators have identified small molecule targets on RNA that can be engaged to modify RNA functions that could have therapeutic benefit.

Medicinal chemists have also identified large synthetic peptide-like molecules that can disrupt protein-protein interactions once through to be druggable only with mAbs. Merck’s PCSK9 inhibitor MK-0616 is an example of this new class of synthetic drugs. MK-0616 is a macrocyclic peptide that violates the traditional Lipinski rule of five with a molecular weight of over 1,586. Also noteworthy is that MK-0616 cannot be expressed because most of the peptides that comprise MK-0616 are non-canonical complex amino acids.

Beyond the consistently high percentage of FDA approved drugs classified as “small molecules,” there has been a rise of hybrid modalities, such as antibody–drug conjugates, synthetic peptides, and radiotherapeutics, all of which require synthetic manufacturing technology but are not classed as “small molecules.”

Considering all these factors, it is not just a renewed interest in small molecules but a growing demand for synthetic manufacturing capabilities and capacity.

Renewed interest in small molecule therapeutics is being driven by several factors. Small molecules remain attractive for their ability to efficiently penetrate cells and act on intracellular targets. Poor bioavailability and off-target effects can be a drawback for large molecule therapeutics, including standard mAbs and whole-antibody multispecifics.

The market for small molecule therapeutics is expected to grow significantly in the future, especially in the treatment of central nervous system disorders, infectious diseases, and oncology treatments. This is driven by their simpler structure, lower production costs, and ease of administration. This trend is reflected in the increased number of partnerships, acquisitions, and funding rounds focused on small molecule therapeutics. As a result, small molecules are poised to play a crucial role in the future of precision medicine and targeted therapies.

Biotage, a leading provider of solutions in the field of life sciences, has a diverse portfolio that aligns well with this renewed interest in small molecule therapeutics. Biotage's offerings include advanced tools and technologies for drug discovery and development, including a portfolio of flash purification media and hardware and analytical sample preparation tools, which are essential for the efficient synthesis, purification, and analysis of small molecules.

Renewed interest in small molecule therapeutics, from GLP-1 receptor agonists to novel modalities that target previously undruggable protein, is driven by how chemistry-based innovation is expanding what’s possible in areas traditionally dominated by peptide- or protein-based biology. Today, small molecules are increasingly viewed as modern modalities that combine biologic-like precision and efficacy with efficiency, stability, and scalability.

Importantly, this isn’t an either-or strategy. Investments in innovation are being directed toward the therapies that best address unmet patient needs. Biologics and small molecules complement each other, often serving different therapeutic and patient requirements. We see the future as multimodal, and our focus is on helping customers reach markets and patients faster with reliable, scalable solutions across all modalities.

Small molecules are experiencing a renaissance driven by their precision and patient-friendly profiles. Unlike large biologics, many are orally available, a convenience that boosts adherence and access. Advances in chemistry enable exquisite pathway targeting that maximizes efficacy while minimizing off-target effects. At the same time, multi-target strategies are emerging to overcome resistance; for example, at Faeth Therapeutics, we combine a PI3Kα inhibitor with an mTORC1/2 inhibitor to shut down an entire cancer growth pathway, side-stepping the escape routes tumors use. The result is a surge of confidence and capital and acquisitions, such as Eli Lilly acquiring Scorpion Therapeutics for $2.5 billion, that highlight investors see these next-gen small molecules as transformative.

Over the last few years, the list of New Drug Approvals by the FDA has included more than twice as many small molecule products as biologics. I think we’ve seen this renewed interest in small molecule therapeutics for a variety of reasons. For starters, small molecules are often easier and less expensive —compared with biologics — to discover, optimize, and manufacture. The regulatory pathways are also more mature, accounting for a smoother approval process. Biologics, on the other hand, require a sterile facility and often have a more difficult FDA approval process to navigate, both of which can serve as obstacles to greater participation in this space.

In terms of development and manufacturing, most major pharma companies will likely already have internal capabilities to advance their high potential projects, for both the drug substance and drug product. For smaller or virtual companies that lack the required infrastructure and capabilities, they will likely look to a contract development and manufacturing organization (CDMO) as a strategic partner to help advance their programs. We’re not only seeing the expansion of CDMO capacity, but also an uptick in technology investments, such as sophisticated AI platforms to develop and manufacture new complex and high-value therapeutics.

Several developments and market dynamics have contributed to the renewed interest in small molecule therapeutics. Recent practical implementation of technological advancements has made an impact on the development timeline and effectiveness of the resulting candidate. For example:

• AI and machine learning (ML) have been utilized effectively to accelerate hit identification and lead optimization of promising molecules.

• Innovations in structure-based drug design (SBDD), such as cryogenic electron microscopy, time-resolved crystallography and AI-derived protein models, enable rational design of complex targets.

• Expansion into new small molecule modalities, such as targeted protein degraders (proteolysis targeting chimeras (PROTACs), molecular glues), which help remove harmful proteins, and small molecule–drug conjugates (SMDCs), which deliver drug more precisely to diseased cells.

• Incorporation of amorphous solid dispersion technologies, such as spray drying, hot melt extrusion and beyond, have enabled biopharmaceutics classification system (BCS) II/IV molecules to achieve suitable bioavailability profiles.

In tandem with these technological advances, there has been a refined focus in the market on the overall timeline to develop and obtain marketing authorization for new therapeutics due to scarcity of funding and concerns over patent protection once marketing authorization is obtained. Small molecule therapeutics often offer the advantages of generally shorter development timelines, lower costs of goods and a well-established manufacturing infrastructure. These benefits propel stronger industry and investor interest, as they enable faster, more scalable, and economically sustainable innovation compared with other drug modalities.

Renewed interest in small molecules is being driven by technological leaps and economic advantages. AI is now central to molecular design and absorption, distribution, metabolism, excretion, and toxicity (ADMET) prediction, compressing timelines and development spend. Meanwhile, cryo-electron microscopy and high-resolution structural biology now enable selective design of small molecules against targets once considered “undruggable.” Biologics still lead on specificity, but when a viable small molecule option exists, speed and cost efficiency often tip the scales.

While recent capital favored novel biologics and new modalities, small molecules still account for the majority of approvals. We see investment funneling to small molecule AI-first discovery platforms and core assets that can branch into multiple indications, formulations, or route switches under 505(b)(2). Ultimately, small molecules offer lower risk, faster proof-of-concept, and globally scalable products.

Renewed interest in small molecule therapeutics is being driven by their versatility, cost-effectiveness, and recent technological advances. These drugs remain essential for treating chronic and complex diseases such as cancer, cardiovascular conditions, and neurological disorders. Innovations like AI-driven drug design and targeted protein degraders, particularly PROTACs, are expanding their potential. PROTACs represent a paradigm shift in drug discovery by enabling the selective degradation of disease-causing proteins, including those previously considered "undruggable." This novel modality is attracting significant attention from both biotech and pharma investors due to its promise of enhanced efficacy and reduced resistance profiles.

Almac is at the forefront of this innovation, offering comprehensive support for PROTAC development, and our capabilities span the synthesis of complex bifunctional molecules, as well as the design and optimization of linkers to ensure optimal pharmacokinetics and degradation efficiency. Our integrated analytical and cGMP manufacturing services further support the progression of small molecule candidates from discovery through to clinical development and beyond, making us a trusted partner in this rapidly evolving field.

Our broader expertise in small molecule development is underpinned by our vertically integrated service offering, which spans from the manufacture of registered starting materials (RSMs) through to commercial API manufacture and integration of technology, including biocatalysis, flow chemistry and reactive crystallization. This end-to-end capability enables seamless project progression, reduces risk, and accelerates timelines for our clients by ensuring greater control over quality, supply chain continuity, and regulatory compliance.

Despite the rise of biologics, small molecule APIs continue to be a cornerstone of drug development. Renewed momentum is also being driven by their high share of FDA approvals, patient-friendly oral administration, global supply chain shifts, sustainability imperatives, and regulatory pressures, which are prompting investment in regional manufacturing and greener processes, reinforcing the strategic value of small molecules in the pharmaceutical landscape.

Small molecule therapeutics are experiencing a resurgence, fueled by growing demand for breakthrough innovations in oncology, central nervous system (CNS) disorders, and endocrine conditions like diabetes and weight loss. Further, ADCs remain a rapidly growing technology due to strong clinical data, attracting strong investor interest. These trends are shaping investment decisions across the sector, as companies seek to capitalize on emerging opportunities and ensure long-term resiliency.

As demand grows, investing in new capabilities and facilities remains essential. This is largely due to the increasing complexity of clinical pipelines and the need to address challenges, such as limited solubility and reduced bioavailability. At Lonza, we are responding to these industry needs by expanding our capabilities. This includes enhancing our clinical bottling and labeling services for tablets and powder-filled capsules, as well as offering spray-dried protein formulations for pulmonary delivery at our Bend, Oregon (U.S.), site.

Technological innovation, particularly in artificial intelligence, continues to reshape investment strategies, as speed and efficiency remain important priorities for biopharma companies. With the industry advancing rapidly, both investors and innovators are prioritizing partners who can accelerate development and scale-up with precision and reliability. Our Design2Optimize™ platform, for example, addresses these needs by helping improve efficiencies and enhance timelines to clinical trials for small molecule-based drugs.

Small molecule therapeutics offer many advantages. They can modulate extracellular and intracellular targets, offering broader applicability. Many can be taken orally, improving patient ease and compliance. They are typically manufactured via well-established, scalable processes and are often room-temperature stable, contributing to their affordability.

Technological improvements have accelerated discovery of novel candidates with high potency and safety. Compound libraries (e.g., fragment, covalent, and DNA-encoded libraries) and high-throughput methodologies facilitate screening, while AI supports in silico screening and optimizes structure prediction and refinement.

Achieving a balance between strong target potency and favorable ADMET profiles is challenging for emerging small molecule therapeutics like target protein degraders, peptide mimetics, and protein–protein interaction modulators due to their larger size and lower solubility, cell permeability, and bioavailability. Advanced drug delivery systems (DDS) like liposomes can help overcome ADMET issues and even allow access to previously undruggable targets. DDS also enable effective use of small molecules in combination therapies, allowing for tailored, multi-pronged therapeutic strategies.

Fujifilm offers high-throughput screening (HTS), induced pluripotent stem cell (iPSC)-mediated compound screening, and AI-based small molecule drug design and is currently advancing several projects through different development stages. FF-10832 (liposomal gemcitabine) and FF-10850 (liposomal topotecan) have FDA orphan drug designation for the treatment of biliary tract cancer and Merkel cell carcinoma, respectively.

Small molecules always make sense from a development perspective, particularly if they are already approved. The 505-B2 process is generally less expensive and requires less time compared with obtaining approval for a new chemical entity. The barrier to entry for small firms is lower.

For developers, the risks are much lower. The fear that toxicity will rear its head is much smaller than with large molecules. Reduced development time allows for longer periods of exclusivity. Additionally, often, but not always, the formulation process for a small molecule is easier to accomplish. Routes of administration, dosing and related concerns can still be challenging and are generally more easily managed than with large molecules.

Further, global development programs have a little more certainty. Regulatory expectations are more harmonized, and clinical programs can be handled by more centers than with large molecules that require infusion or a series of injections.

So, at a time when investor capital is more concerned with certainty, it is not surprising that small molecules have continued to attract attention.

ADCs are rapidly transforming oncology by uniting the precision of monoclonal antibodies with the cytotoxic power of small molecule payloads. This modality enables targeted delivery of potent agents directly to tumor cells, minimizing systemic toxicity and expanding the therapeutic window. First-generation ADCs established clinical proof-of-concept and subsequent waves have introduced topoisomerase I inhibitors, DNA crosslinkers (and duocarmycins) to overcome resistance and improve efficacy in solid tumors.

Now, the field is entering a new phase, with immune-stimulatory payloads — such as TLR agonists and STING activators — poised to reshape the tumor microenvironment and synergize with checkpoint inhibitors. These innovations are expanding ADC utility into previously refractory cancers and enabling novel combination strategies.

To accelerate development, biopharma companies are increasingly adopting a dual-region strategy that leverages both U.S. and Asia-Pacific (APAC) ecosystems.

• USA and China and the broader APAC region — particularly South Korea, and Australia — are emerging as pivotal hubs for early-phase ADC trials.

• China’s vast treatment-naïve population, streamlined National Medical Products Administration (NMPA) regulatory pathways, and expanding clinical infrastructure make it an ideal setting for rapid phase I/II enrollment.

• When integrated with U.S.-based pivotal trials, this transregional approach enables faster go/no-go decisions, de-risks development, and enhances global regulatory alignment.

With over 1,100 ADCs in development and a market projected to exceed $25 billion by 2030, the modality is no longer niche — it is foundational to the future of precision oncology. As payload chemistry, linker design, and biomarker-driven targeting continue to evolve, the convergence of biologic specificity and small molecule engineering is unlocking new therapeutic frontiers. Strategic global trial execution — anchored in U.S. innovation and APAC acceleration — is now essential to capturing first-mover advantage in this rapidly advancing field.