The global DNA encoded library market size is expected to be worth USD 1.06 Billion in 2025. It can balloon to an outsized valuation of USD 3.11 Billion by 2032. The market is anticipated to exhibit a CAGR of 16.6% during the forecast period (2025-2032). 

The expansion of DNA encoded libraries (DEL) is driven by increasing R&D investments, applications in target validation, and the emergence of new biologics. The focus of pharmaceutical companies towards new screening techniques can drive the market growth over the forecast period.

However, the mislabeling of small molecules with DNA encoded libraries, which could hinder scientific breakthroughs, can hamper the market growth.

Key Market Insights

The DNA encoded library market growth is driven by the growing need for new active compounds, innovative drug discovery approaches, and advancements in biotechnology.

• By therapeutic area, the immunological disorders segment is expected to score 27.2% share in 2025. The use of DEL to identify modulators for immune pathways associated with inflammatory and autoimmune diseases can drive segment growth.
• By library type, the peptide-based DEL segment is anticipated to attain a 36% market share in 2025. This can be attributed to the demand for larger molecules and the development of active compounds to be used in molecular therapies. The advantages of antimicrobial peptides (AMPs) compared to traditional antibiotics are likely to support the segment growth throughout the forecast period.
• By application, the target identification & validation segment is expected to carve a market share exceeding 35% in 2025. Advances in DNA barcoding techniques and the demand for efficient discovery solutions can fuel the segment growth.
• By end user, the pharmaceutical and biotechnology companies segment is expected to capture more than 40% market share in 2025. This is on account of outsourced and in-house DEL services for faster identification of promising drug candidates. Collaborations with technology providers and investment in drug discovery programs can boost the segment growth over the forecast period.
• By region, Europe is expected to display a robust growth rate during the forecast period in the DNA encoded library market. This can be attributed to the presence of various biotechnology firms and collaborative efforts between countries for the development of DNA encoded libraries. Strategic partnerships and collaborations between biotechnology firms and universities can fuel research efforts in the region, boding well for the region.

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DNA Encoded Library Market Report Coverage

Market Dynamics

The discovery of novel small molecules is predicted to drive the growth of the DNA encoded library market. The application of DEL for the identification of small molecule ligands for targeting of live cancer cells can open up new avenues in precision medicine. Identification of biomarkers can mark a new era in cancer therapy development.

Researchers are employing machine learning (ML) techniques in the pursuit of this discovery. The new strains of viruses require compounds that help the immune system fight external threats to the body.  Use of ML can train the AI system for improving their hit validation technique. The use of ML can train the AI system to improve its hit validation technique. The identification of potential drug candidates using molecular interactions can drive market growth.

Market Opportunity: Partnership Led Expansion

Several collaborations between biotechnology firms and DEL service providers are likely to provide a prime opportunity for expansion. Companies are even outsourcing DEL services to gain a lead in their drug discovery process. For instance, ETH Zurich's Department of Biosystems Science and Engineering (D-BSSE) and the Botnar Institute of Immune Engineering IIE have established a significant long-term strategic partnership on March 20, 2025. The transformation of high-throughput screening (HTS) is expected to be driven by the use of computational biology and artificial intelligence.

Market Challenge: Mislabeling of Small Molecules to be a Setback for Drug Discovery

The mislabeling of small molecules can prove expensive to drug manufacturers. The application of machine learning to the drug discovery process has expedited it exponentially. But it has also led to the miscategorization of molecules within DNA encoded libraries. A recent study on the reliability of DNA encoded libraries by the University of Utah on July 04, 2025, revealed that they had mislabeled many good molecules as bad. This led to the dismissal of various compounds that could be used in the development of various drugs. The failure to act on these findings can be detrimental to the DNA encoded library market growth.

Analyst’s View

• The focus on personalized medicine and the identification of drugs at an early stage are factors driving the DNA encoded library market.
• The pharmaceutical and biotechnology companies segment is expected to dominate the market in 2025 owing to the need for active compounds for targeting of live cancer cells.
• Key players are leaning on product innovations, partnerships with healthcare providers, and collaborations to keep their lead in the global market.

Recent Developments

Evotec SE, a Germany-based biotechnology company specializing in drug discovery and development, partnered with X-Chem on September 05, 2024, to strengthen its early drug discovery process. The former aims to leverage the latter’s DNA encoded library for identifying potential drug candidates.

Competitor Insights

• Vipergen
• Philogen S.p.A
• Pfizer
• Philochem AG
• Merck & Co.
• NovAliX
• AstraZeneca
• WuXi AppTec
• PROVendis
• Roche
• X-Chem
• Bristol-Myers Squibb
• SpiroChem
• Amgen
• GSK (GlaxoSmithKline)

Market Segmentation

• By Therapeutic Area
• Oncological Disorders
• Immunological Disorders
• Neurological Disorders
• Respiratory Disorders
• Dermatological Disorders
• Cardiovascular Disorders
• Infectious Diseases
• By Library Type
• Oligonucleotide-based DEL
• Peptide-based DEL
• Hybrid DEL
• By Application
• Drug Discovery
• Target Identification and Validation
• Chemical Biology Research
• By End User
• Pharmaceutical and Biotechnology Companies
• Academic and Research Institutes
• Contract Research Organizations (CROs)

Regional Insights

• North America
  • U.S.
  • Canada
• Latin America
  • Brazil
  • Argentina
  • Mexico
  • Rest of Latin America
• Europe
  • Italy
  • Germany
  • U.K.
  • Spain
  • Russia
  • France
  • Rest of Europe
• Asia Pacific
  • South Korea
  • India
  • China
  • Japan
  • Australia
  • ASEAN
  • Rest of Asia Pacific
• Middle East
  • GCC Countries
  • Israel
  • Rest of Middle East
• Africa
  • South Africa
  • North Africa
  • Central Africa