A decision from the US sent pharma sector shares soaring by 5%

Pharma stocks have seen a surge amid a rally in the Indian stock market. Shares of pharmaceutical companies surged after the US Senate passed the BioSecure Act on December 19th. 

This legislation prevents certain Chinese biotech companies from receiving funding from the US government. The Nifty Pharma index closed at 22,751.25, up 0.86 percent today. Pharma stocks saw gains of up to 5 percent.

Biosecure Act

The US Senate on Wednesday passed the National Defense Authorization Act (NDAA) for Fiscal Year 2026. This nearly $1 trillion defense-related legislation, which sets Pentagon policies and has been passed by Congress for the past 65 years, has now been approved by the Senate, following approval by the House of Representatives last week. The bill will then be sent to the White House for President Donald Trump's signature, making it law.

The NDAA includes a modified version of the Biosecure Act, which excludes certain Chinese biotech companies from US 

government funding. It was originally introduced in 2024 but failed to pass Congress. The bill aims to reduce China's influence on the US biotech supply chain and protect against biotechnology-related espionage. 

India could benefit significantly from US efforts to reduce its dependence on China. This impact was also seen on the shares of Indian pharmaceutical companies.

Who will be affected

According to Citibank, the US Department of Defense has indicated that a major contract development and manufacturing organization (CDMO) could be affected. 

The brokerage firm says this could benefit Indian CDMO companies, particularly Divi's Laboratories. According to global brokerage firm Macquarie, Divi's Laboratories is one of the companies most likely to benefit from the US Biosecure Act.

Piramal Pharma Chairperson Nandini Piramal said the Biosecure Act is a positive step for India. Speaking to CNBC-TV18, she said it's forcing their customers to consider a Plan B. 

China is cheaper and faster, but now people at the board level are weighing the risks. They're deciding when and where to resume production. She added that this is a good opportunity for India, though it will take time to see results.

Top pharma stocks gaining today

Wockhardt shares rose 5% to ₹1,446.70 per share, becoming the top gainer on the Nifty Pharma index. Laurus Labs shares rose nearly 3%, while Divi's Laboratories gained nearly 2%. 

Ajanta Pharma and Biocon shares rose more than 1%. Piramal Pharma, Aurobindo Pharma, Cipla, and Glenmark Pharma also gained around 1%.

Shares of Mankind Pharma, Lupin, Glenmark Pharmaceuticals, Zydus Lifesciences, Abbott India, Sun Pharmaceutical Industries, IPCA Laboratories, and Dr. Reddy's Laboratories were trading in the green with slight gains. 

Contrary to the market sentiment, JB Chemicals & Pharmaceuticals, Alkem Laboratories, and Torrent Pharmaceuticals were trading in the red with slight losses.

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