The Regulatory Shift: 2022â2025
On December 29, 2022, President Biden signed the FDA Modernization Act 2.0 into law, ending the 1938 mandate requiring animal testing for all new drugs. For the first time in 85 years, the FDA began accepting organoids, microphysiological systems, digital twins, and AI-based models as legitimate alternatives for establishing drug safety and efficacy.
On December 16, 2025, the U.S. Senate unanimously passed FDA Modernization Act 3.0, directing the FDA to replace "animal" with "nonclinical" in Title 21 regulations within one year. This landmark legislation makes New Approach Methodologies (NAMs) the default pathway for drug safety assessment.
In December 2025, the FDA also released draft guidance on streamlining nonclinical safety studies for monoclonal antibodies, proposing weight-of-evidence approaches that could eliminate routine animal toxicity studies.
Major Players Are Moving (2024â2025)
The Emerging Paradigm: Clinical Trials in a Dish
The convergence of iPSC-derived organoids, cell villages, and AI/ML models has created a new paradigm: the ability to conduct "clinical trials in a dish" â pooling cell lines from diverse patient populations to predict drug response before human trials begin. This approach captures human variability that animal models fundamentally cannot replicate.
December 2025 milestone: Researchers announced automated methods for growing lung organoids, promising faster drug testing and reduced animal reliance. Meanwhile, brain organoids have reached unprecedented complexity, prompting new ethical discussions about advanced neural models.
2025 Market Projections
2025's $500M+ in biotech M&A activity signals contested infrastructure. Leading institutions are securing simulation nomenclature and platform positioning ahead of regulatory standardization cycles.
"Simulation portfolios define the decade." â Industry analysis, Q4 2025