US Biosecure Act, China Plus One, and Trump’s Tariff War: CDMOs Are Hot Topic, As This Small-Cap Pharma Gains 2.66% on CDMO Expansion

Regulatory changes, such as the US Biosecure Act, may accelerate growth for CDMO businesses. However, uncertainties remain, especially if Donald Trump returns to power. Trump has criticized India on trade issues, including pharmaceutical tariffs, which could impact domestic pharma strategies.

Shares of Granules India, a key player in the pharmaceutical sector, rose 2.66% to ₹522 per share on Monday, February 24, after announcing its acquisition of Senn Chemicals AG to enter the CDMO and peptide business. Contract Development and Manufacturing Organizations (CDMOs) provide drug formulation, manufacturing, and launch support for pharmaceutical and biotechnology firms.

Granules India Ltd. has agreed to acquire Senn Chemicals AG, a Switzerland-based CDMO specializing in peptides. The transaction is expected to close in the first half of 2025, pending regulatory approvals.

Founded in 1963 and headquartered in Dielsdorf, Switzerland, Senn Chemicals AG is a leading manufacturer of custom peptides. This acquisition enhances Granules' European presence and innovation capabilities, meeting the growing demand for Amino Acid Derivatives (AAD) and peptide-based therapeutics. The acquisition is valued at CHF 20 million (approximately ₹1,925 million), excluding additional charges and expenses. Granules India will acquire a 100% stake in Senn Chemicals AG. Granules India’s expansion into peptides and CDMO services aligns with its strategy to strengthen its footprint in peptide-based therapeutics.

Management Commentary

• Dr. Krishna Prasad Chigurupati (Chairman & Managing Director, Granules India): Calls the acquisition a strategic milestone, reinforcing the company’s focus on innovation and affordability.
• Dr. Rico Wiedenbruch (Chairman, Senn Chemicals AG): Highlights the synergies between Senn and Granules India, foreseeing substantial growth opportunities in peptide therapeutics.

India’s Contract Research, Development, and Manufacturing Organization (CRDMO) industry is rapidly growing. Regulatory initiatives like the US Biosecure Act could drive the sector to a high-teens CAGR. As global pharmaceutical firms seek cost-effective, reliable partners, India becomes a key hub for small-molecule drug development and manufacturing.

Additionally, shifting global pharmaceutical supply chains—partially due to the US Biosecure Act—are reducing reliance on China. However, uncertainty persists with the possibility of Donald Trump returning to office. His stance on imposing tariffs on Indian pharmaceutical exports could create challenges for the sector.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.