Nifty Pharma index declined 2.67% intraday on Friday after US President Donald Trump announced a 100% tariff on the sector with an exception for companies that have manufacturing capacity in the United States.
Specific details are yet to be shared, but preliminary details show that the US tariffs mainly target branded and patented drugs. So, consequently, it is unclear whether complex generics and specialty drugs from India could also face scrutiny.
However, stocks of Sun Pharmaceutical Industries Ltd., Cipla Ltd., Dr Reddy's Laboratories Ltd., Lupin Ltd., and Biocon Ltd. still declined on Friday.
Sun Pharmaceutical Industries Ltd. declined nearly 5% as the company is likely to see some impact until it announces its US capex plans. Cipla Ltd. declined 2.29%, Biocon Ltd. declined 2.78%, Dr Reddy's Lab declined 2.27% intraday to trade at Rs 1,246.20 apiece, and Lupin Ltd. declined 2.47% intraday to trade at Rs 1,915 apiece.
Notably, the US tariffs mainly target branded and patented drugs, a market dominated by multinational companies like Pfizer Inc. and Novo Nordisk Inc. Sun Pharmaceutical Industries Ltd. and Biocon Ltd. are also key branded players in the US.
Bengaluru-based Biocon, through its wholly owned subsidiary Biocon Generics Inc., commissioned its US manufacturing facility earlier this month in Cranbury, New Jersey. Biocon acquired the Oral Solid Dosage (OSD) facility from Eywa Pharma Inc. in 2023 and has since invested over $30 million to establish a state-of-the-art plant with an annual production capacity of two billion tablets.
Meanwhile Sun Pharma too may have some impact until it announces its US capex plans. It exports specialty drugs like ILUMYA, CEQUA, WINLEVI and ODOMZO. This category contributes 19% to overall revenue.
In FY25, Global Specialty sales rose by 17.1%, reaching $1,216 million. Additionally, Specialty R&D accounted for 36% of the company's total R&D spend in Q4FY25.
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