Divis, Neuland, Jubilant Pharmova: Biosecure Act is back, valuations may rise again

The US Biosecure Act has resurfaced and that could spell good news for Indian pharma contract manufacturers. According to Nuvama Institutional Equities, the revised draft bill, submitted under the National Defense Authorization Act, no longer singles out the WuXi group companies of China that had unnerved global biotech outsourcing in the past. Instead, it refers to a broader list of companies of concern under an existing defense law and even provides a five-year window for innovators to unwind existing contracts.

Nuvama believes this change in tone is a positive for India’s contract development and manufacturing organisations. The brokerage noted that when the earlier version of the Act was floated, several global innovators began looking beyond China, which resulted in new project wins for Indian firms. With the discussion on the Biosecure Act revived, Nuvama expects a similar trend of supply chain diversification to play out again, strengthening the role of Indian CDMOs in the global market.

Within its coverage, Nuvama sees Divi’s Laboratories emerging as a key beneficiary, supported by capex-led growth and its growing presence in the GLP-1 space. It highlighted Neuland Laboratories, recently added to its CDMO coverage, as well as Jubilant Pharmova, which is set to commission its third CDMO line in the US by the second half of FY26. Beyond these, the brokerage also pointed to companies such as Aurigene, Syngene and Aurobindo Pharma’s upcoming biologics CMO unit as incremental beneficiaries of the shifting outsourcing landscape.

“While the bill has been softened compared to its earlier avatar, the underlying direction is clear: US innovators are focused on supply chain security and will continue to seek partners outside China. This should keep Indian CDMOs in the spotlight,” Nuvama said, reiterating its ‘Buy’ stance on Divi’s, Neuland and Jubilant Pharmova.