Shares of Indian CDMO players rallied up to on October 10 after US Senate passed the Biosecure Act.
US Senate passed National Defense Authorisation Act with 77 votes in favour and 20 votes against it.
The NDAA Bill embedded an amended version of US Biosecure Act.
The Act prohibits federal agencies from procuring/contracting with/using biotech equipment or services from companies of concern originating from China.
Brokerages said Divi's Laboratories, Syngene, Jubilant Pharmova, Neuland Labs will benefit from this, reported CNBC-Awaaz.
At 12:45 pm on October 10, Nifty Pharma was trading 1.56% higher with Divi's Labs, Piramal Pharma, Wockhardt Pharma leading gains by rising 5%, 4.36% and 3%, respectively.
India has the highest number of USFDA approved plants outside of US. Imports from India have increased from $6 million in CY00 to $11 billion in CY23. India provides meaningful cost advantages aside from China, said Bajaj Finserv last month.
"These growth metrics are expected to accelerate over the next decade with the passage of Biosecure Act. Eight-year grandfathering clause will help India CRAMS (Contract Research and Manufacturing Services) players to evolve the supporting ecosystem by working with large global innovators. Low-cost, well-trained supply of talent as well as supporting infrastructure backed by growth capital drove the China CRAMS market to flourish. India stands at a similar inflection point today," added Bajaj Finserv.
Based on industry feedback an amendment added a clause which allowed the US companies to find an alternative by 2032.
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