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Bio Secure Act – Boon for Indian CRAMs companies

ICICIdirect Research 19 Dec 2025 DISCLAIMER

The US House of Representatives has passed the National Defense Authorisation Act, which includes a revised Biosecure Act that effectively restricts over-dependence on the Chinese CRAMS players.


The Biosecure Act reiterates the risks of full-time engagement with the Chinese firms. This could pave the way for incremental outsourcing to Indian CRAMS players in the long run.


Global pharma innovators are extensively engaging with CRAMS players to manage high R&D costs for a new drug which in some cases goes beyond US$ 2 billion. As per 2024 industry estimates, global CRAMS opportunity is ~US$ 200 billion and growing at 9-10% p.a.


With the possible passage of this act, we expect US and other global players, to reconsider their strategy of over boarding of Chinese CRAMS players for future projects.


For comparison, while Chinese CRAMS players earned ~US$ 28 billion of sales in 2024, Indian players earned ~US$ 8 billion of sales in 2024. Although we do not expect immediate shift, we expect gradual de-risking by the US players by way of China re-balancing in the coming years.


By sniffing this opportunity (Biosecure Act) along with other structural demand drivers, Indian companies have aggressively undertaken capacity expansion capex. A case in point is Divi’s Labs’ capex plan of ~ ₹ 2000 crore based on customer orderbook


We expect Divi's Labs, Piramal Pharma, Laurus Labs, Syngene and among others to be the long-term beneficiaries.


We have a positive view on Piramal Pharma with a TP of ₹ 260 and Laurus Labs with a TP of ₹ 1075

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