Oncolytic Virus Therapy Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Virus Type (Adenovirus, Herpes Simplex Virus (HSV), Measles Virus, Reovirus, Vaccinia Virus, Vesicular Stomatitis Virus (VSV), Others), By Application (Solid Tumors, Hematological Malignancies), by End User (Hospitals, Cancer Research Institutes, Biopharmaceutical Companies), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 16.92 Billion
CAGR (2026-2031)	23.19%
Fastest Growing Segment	Reovirus
Largest Market	North America
Market Size (2031)	USD 59.14 Billion

Market Overview

The Global Oncolytic Virus Therapy Market will grow from USD 16.92 Billion in 2025 to USD 59.14 Billion by 2031 at a 23.19% CAGR. Oncolytic virus therapy is a distinct immunotherapeutic approach utilizing native or genetically engineered viruses to selectively replicate within and lyse malignant cells while stimulating a systemic antitumor immune response. The primary drivers propelling this market include the escalating global prevalence of cancer and the urgent requirement for targeted treatments that offer favorable safety profiles compared to conventional chemotherapy. Additionally, the capability of these therapies to transform cold tumors into hot environments enhances the efficacy of combination regimens and supports their increasing adoption in oncology.

Despite the promising trajectory, the sector encounters a significant challenge regarding the complex manufacturing and standardization processes required to ensure consistent viral potency and biosafety. These production hurdles can impede rapid commercial scalability and increase development costs. Validating the clinical potential of these agents, according to the American Society of Clinical Oncology, in 2025, the oncolytic virus OH2 demonstrated a significant six month recurrence free survival rate of 66.7 percent in patients with high risk bladder cancer. Such clinical milestones are critical for overcoming regulatory hesitations and securing the investment necessary for market expansion.

Key Market Drivers

Rising Public and Private Investment in Immuno-Oncology is a primary force driving the market, as sustained capital influx enables biotechnology firms to navigate costly developmental phases and manufacturing challenges. This financial momentum is evident in the sector's accelerating growth metrics; according to the Alliance for Regenerative Medicine, January 2025, in the 'State of the Industry Briefing', investment in the cell and gene therapy landscape increased by 30 percent compared to the prior year. Such funding is crucial for advancing early-stage candidates into pivotal trials and securing commercial viability. Reinforcing this trend of robust capitalization, according to Transgene, in November 2025, the company successfully completed a fundraising of approximately 105 million euros to accelerate the clinical development of its viral immunotherapy portfolio.

Advancements in Genetic Engineering for Enhanced Viral Potency are simultaneously revolutionizing the therapeutic landscape by overcoming historical efficacy limitations and safety concerns. Developers are now utilizing precise modification techniques to increase tumor selectivity and immune activation, resulting in superior clinical outcomes for difficult indications. For instance, according to Labiotech.eu, August 2025, in the article 'Oncolytic virus therapy for cancer', CG Oncology's genetically engineered oncolytic virus demonstrated a significant 75.2 percent complete response rate in phase 3 studies. These technological strides not only validate the mechanism of action but also position oncolytic viruses as a potent, targeted modality for patients unresponsive to standard treatments.

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Key Market Challenges

The complex manufacturing and standardization processes required to ensure viral potency and biosafety represent a substantial impediment to the growth of the Global Oncolytic Virus Therapy Market. Unlike conventional small-molecule drugs, oncolytic viruses are live biological agents that necessitate highly specialized, aseptic production environments to maintain their infectivity and therapeutic efficacy. The inherent biological variability of these agents complicates the establishment of standardized protocols, leading to frequent batch-to-batch inconsistencies and high failure rates during production. These technical difficulties result in a fragile supply chain and exorbitant cost of goods sold, which directly limits the ability of manufacturers to scale operations to meet global patient demand.

This inability to rapidly scale production creates a bottleneck that restricts market expansion and commercial adoption. The high capital expenditure required to establish Good Manufacturing Practice (GMP) compliant facilities deters investment and keeps the final price of the therapy prohibitively high for widespread healthcare reimbursement. This consolidation of success among a limited number of players is evident in the sector's financial landscape. According to the Alliance for Regenerative Medicine, in 2025, 75 percent of global revenue in the advanced therapy sector was generated by fewer than ten products. This high concentration of revenue underscores how manufacturing and scalability hurdles prevent the broader oncolytic virus pipeline from translating clinical success into commercially viable, widely accessible treatments.

Key Market Trends

Strategic Shift Toward Combination Therapies with Immune Checkpoint Inhibitors is redefining the market by addressing the limitations of monotherapies, particularly in patients who have exhausted standard immunotherapies. By modifying the tumor microenvironment, oncolytic viruses can sensitize "cold" tumors to checkpoint inhibition, thereby overcoming resistance mechanisms. This synergy is proving critical for market growth as developers prioritize regimens that combine viral lysis with systemic immune activation. Validating this approach, according to Replimune Group, June 2025, in the 'IGNYTE Clinical Trial' update, the combination of RP1 and nivolumab achieved a notable one-year overall survival rate of 75.3 percent in patients with anti-PD1 failed melanoma. Such data underscores the clinical viability of combinatorial strategies in extending survival for difficult-to-treat patient populations.

Expansion of Clinical Pipelines Targeting Refractory Solid Tumors like Glioblastoma and Pancreatic Cancer represents a crucial evolution beyond the sector's initial focus on melanoma. Manufacturers are increasingly designing viral agents capable of penetrating the dense stroma of these aggressive malignancies to deliver therapeutic payloads effectively. This broadening of indications is vital for unlocking new commercial opportunities in high-unmet-need areas where conventional modalities have stalled. Highlighting this progress, according to Candel Therapeutics, February 2025, in the 'Final Survival Data' report, the oncolytic virus CAN-2409 demonstrated a median overall survival of 31.4 months in patients with borderline resectable pancreatic cancer, significantly outperforming the control group. This success signals a maturing capability to engineer viruses that can function within hostile solid tumor environments.

Segmental Insights

The Reovirus segment represents the fastest-growing category in the Global Oncolytic Virus Therapy Market, fueled by the accelerating clinical success of its lead candidate, Pelareorep. This growth is driven by the virus's ability to synergize with chemotherapies and checkpoint inhibitors, effectively activating the immune system against difficult-to-treat tumors. The segment's trajectory is significantly bolstered by regulatory endorsements, specifically the Fast Track designations granted by the US Food and Drug Administration (FDA) for metastatic breast and pancreatic cancers. These designations expedite the development pathway, establishing Reovirus as a critical area of expansion within the broader oncolytic landscape.

Regional Insights

North America maintains a dominant position in the Global Oncolytic Virus Therapy Market, driven by substantial investments in research and the presence of established biotechnology firms. The region benefits from a robust healthcare infrastructure that supports extensive clinical trials for cancer treatments. Furthermore, favorable regulatory frameworks established by the U.S. Food and Drug Administration streamline the approval process for new biologics, fostering innovation. The high prevalence of cancer across the continent creates sustained demand for effective therapies, reinforcing North America as the central market for oncolytic virus advancements.

Recent Developments

• In December 2025, Oncolytics Biotech unveiled significant translational research findings relevant to the Global Oncolytic Virus Therapy Market regarding its lead asset, pelareorep. The announced data supported the use of the immunotherapeutic agent in treating second-line metastatic colorectal cancer, particularly in patients with KRAS-mutant, microsatellite-stable disease. The findings demonstrated that the treatment could effectively activate T cells specific to the mutation, resulting in a 33% response rate in a difficult-to-treat patient subgroup. This research underscored the virus's potential to overcome resistance mechanisms and improve clinical outcomes in gastrointestinal malignancies.
• In February 2025, UroGen Pharma strengthened its footprint in the Global Oncolytic Virus Therapy Market through the acquisition of assets from IconOVir Bio. The transaction, which included the investigative oncolytic virus candidate ICVB-1042, was valued at an upfront payment of $4 million. This strategic expansion added a next-generation adenoviral therapy to the company's pipeline, designed to selectively replicate in and destroy cancer cells while sparing healthy tissue. The deal highlighted the company's commitment to diversifying its portfolio with potent viral immunotherapies capable of treating bladder cancer and potentially other solid tumors.
• In December 2024, CG Oncology reported pivotal breakthrough research results impacting the Global Oncolytic Virus Therapy Market from its Phase 3 BOND-003 clinical trial. The study assessed the efficacy of cretostimogene grenadenorepvec as a monotherapy for patients with high-risk, BCG-unresponsive non-muscle invasive bladder cancer. Topline data revealed that 74.5% of participants achieved a complete response, with a highly favorable safety profile devoid of severe treatment-related adverse events. These findings positioned the viral immunotherapy as a potential backbone treatment and a viable bladder-sparing alternative for patients facing limited therapeutic options.
• In November 2024, the Replimune Group advanced its commercialization efforts in the Global Oncolytic Virus Therapy Market by submitting a Biologics License Application to the U.S. Food and Drug Administration. The submission for RP1 (vusolimogene oderparepvec), combined with nivolumab, targeted adult patients with advanced melanoma who had progressed on anti-PD1 containing regimens. Alongside this regulatory milestone, the company received Breakthrough Therapy designation for the therapy, underscoring its potential to address significant unmet medical needs. This step marked a critical transition for the company towards becoming a commercial-stage entity with a novel oncolytic immunotherapy.

Key Market Players

• Amgen Inc.
• Merck & Co., Inc.
• Oncolytics Biotech Inc.
• PsiOxus Therapeutics Ltd.
• Vyriad, Inc.
• SillaJen Inc.
• Cold Genesys Inc.
• Sorrento Therapeutics, Inc.
• Takara Bio Inc.
• Replimune Group Inc.
• Genelux Corporation

By Virus Type	By Application	By Region
Adenovirus Herpes Simplex Virus (HSV) Measles Virus Reovirus Vaccinia Virus Vesicular Stomatitis Virus (VSV) Others	Solid Tumors Hematological Malignancies	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Oncolytic Virus Therapy Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Oncolytic Virus Therapy Market, By Virus Type:

• Adenovirus
• Herpes Simplex Virus (HSV)
• Measles Virus
• Reovirus
• Vaccinia Virus
• Vesicular Stomatitis Virus (VSV)
• Others

• Oncolytic Virus Therapy Market, By Application:

• Solid Tumors
• Hematological Malignancies

• Oncolytic Virus Therapy Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE