US Biosecure Act To Boost Indian Pharma Sector, Says Syngene International Management

The announcement of the US Biosecure Act has created a positive environment for Indian pharma companies, according to the management of Biocon-backed Syngene International Ltd.

Talking to NDTV Profit, Syngene International Ltd.'s Managing Director and Chief Executive Officer, Jonathan Hunt, and Executive Director and Chief Financial Officer, Sibaji Biswas, said the US Biosecure Act would have a positive impact on the business of Indian companies.

The US Biosecure Act, enacted earlier this month, plans to reduce the reliance of US pharmaceutical companies on China and restrict the transfer of technology. The Act specifically targets five Chinese companies – WuXi Apptec, Wuxi Biologics, BGI, MGI and Complete Genomic. It proposes to prevent US firms from working with these companies.

“India as an economy, and companies like Syngene are possibly the closest in capability and scale to work the Chinese companies off,” Hunt said.

He added that in this scenario, companies like Syngene International will become the obvious choice for US clients.

“Our customers are coming to India—probing, testing, searching—and trying to gauge the preparation to bridge the gap that can balance their supply chain,” he said.

However, opportunities arising out of the Act may not be visible immediately as the pharmaceutical and biotechnology industries inherently have long cycles, Hunt said.

“I think it will be a positive wind for five years or a decade,” Hunt said.

Biswas agreed that even though Syngene was seeing some healthy lead indicators, the trend is mid- to long-term.

According to him, the positive results arising out of the opportunities created by the US Biosecure Act would take time to show in the financial books of the company.

“As I mentioned, there are a lot of pilot projects and inquiries. When those start getting converted into opportunities over the next 12-24 months, it will start showing on the financials as well,” Biswas said.

Goldman Sach in April had initiated a ‘buy’ call on Syngene. Since then, most analysts have maintained their positive stance on the stock.

Shares of Syngene International Ltd. opened marginally lower at Rs 880 apiece as compared to the previous close of Rs 880.35 on the National Stock Exchange.

The stock was trading 1.06% higher at Rs 889.70, as of 9:27 a.m., compared to a 0.07% rise in the benchmark Nifty 50.