Shares of several Indian pharmaceutical and biotech contract manufacturing firms surged, with stocks like Divi’s Laboratories, Syngene, Laurus Labs, Piramal Pharma, and Blue Jet Healthcare rising up to 5%. This rally was directly triggered by the US Senate’s passage of the National Defense Authorization Act (NDAA), which contained a significant amendment impacting the global biotech supply chain.triggered by the US Senate’s passage of theShares of several Indian pharmaceutical and biotech contract manufacturing firms surged, with stocks like Divi’s Laboratories, Syngene, Laurus Labs, Piramal Pharma, and Blue Jet Healthcare rising up to 5%. This rally was directly triggered by the US Senate’s passage of the National Defense Authorization Act (NDAA), which contained a significant amendment impacting the global biotech supply chain.

The Biosecure Act was included within the NDAA, which passed with 77 votes in favor. This act aims to restrict reliance on Chinese entities for sensitive biotechnology services. Specifically, the amended Biosecure Act prohibits the use of “biotechnology equipment or services” from Chinese companies designated as “biotechnology companies of concern” in Federal contracts.

This legislative prohibition creates a huge opportunity for the Indian Contract Research, Development, and Manufacturing Organization (CRDMO) industry. Indian companies believe that the global manufacturing business that currently flows to China will be redirected, potentially causing the Indian CRDMO sector to triple or quadruple in size over the next four to five years. The industry is already seeing growth based on the strong possibility of this business shifting to India.

Post the announcement, Divi’s Laboratories Ltd. surged up to 6%, reaching an intraday high of ₹6,507.50. Blue Jet Healthcare Ltd gained over 4%. Laurus Labs Ltd. and Syngene International Ltd. traded over 2% higher.