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  5. Laurus Labs, Piramal Pharma, Syngene hit 52-week high after the US House passes Biosecure Act; here is why

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Laurus Labs, Piramal Pharma, Syngene hit 52-week high after the US House passes Biosecure Act; here is why

Upstox
By Upstox News Desk

3 min read | Updated on September 10, 2024, 13:16 IST

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SUMMARY

It was the first floor vote for the Biosecure Act, which would prohibit federal contracts with targeted firms and those that do business with them. Supporters argue the measure is necessary to protect Americans' personal health and genetic information as well as US pharmaceutical supply chains.

Stock list

LAURUSLABS
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PPLPHARMA
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SYNGENE
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NEULANDLAB
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Laurus Labs hit the 52-week high level of ₹517.90 on the BSE

Laurus Labs hit the 52-week high level of ₹517.90 on the BSE

Pharma stocks were in the pink of health in the domestic market on Tuesday, September 10, after the US House of Representatives on Monday passed a bill that aims to restrict business with China's WuXi AppTec, BGI, and several other biotech companies on national security grounds. 

It was the first floor vote for the Biosecure Act, which would prohibit federal contracts with targeted firms and those that do business with them. Supporters argue the measure is necessary to protect Americans' personal health and genetic information as well as US pharmaceutical supply chains, said a Reuters report. 
This China's loss is expected to be India's gains. The biggest beneficiaries of this move are said to be companies such as Laurus Labs, Piramal Pharma, Syngene, and Neuland Laboratories. 
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As per a report by CNBC-TV18, Laurus Labs believes that this potential shift towards Indian pharmaceutical companies will unfold over the long term, and companies will first begin by handing over small projects. Syngene is expected to gain more traction, likely due to its existing long-term contracts with multinational corporations. 

"Syngene has indicated that it is participating in pilot projects related to the 'China Switch' opportunity and has seen a 50% year-over-year increase in RFPS in terms of value in the first quarter—its best performance in four years," the report added. 

Similarly, Piramal Pharma and Neuland Labs are also engaging in more conversations, customer visits, and meetings with US firms. 

Reacting to the development, barring Neuland Labs, all three pharma stocks, i.e., Laurus Labs, Syngene, and Piramal Pharma, hit their 52-week high levels in the trade today. 

Neuland Labs was trading over 1.7% lower at ₹12,422.60 apiece on the BSE.

Laurus Labs hit the 52-week high level of ₹517.90 on the BSE, while Piramal Pharma hit the 52-week high of ₹229.70. Syngene shares touched ₹938.35 level, their 52-week high mark. 

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The said bill was passed by 306 to 81, easily topping the two-thirds majority necessary under the process. However, the legislation must pass the US Senate before it can be sent to President Joe Biden to be signed into law, added the Reuters report.

Healthcare index up 1%

Besides these, other pharma stocks, too, were trading with decent gains after the GST Council on Monday decided to slash tax rates on cancer drugs to 5% from 12%. The BSE Healthcare index was trading 1% higher at 43,803.16 levels. The biggest contributors to the index's gains were Divi's Lab, Sun Pharma, and Cipla.
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