
The Valuation School
January 28, 2025 at 02:21 AM
*US Foreign Aid Pause Hits Indian Pharma Companies: HIV Drugmakers See Stock Plunge*
By The Valuation School
*US Government's Funding Pause Creates a Stir*
The US government has hit pause on its foreign aid funding, potentially impacting the AIDS relief program. This decision could directly affect Indian pharmaceutical companies that produce HIV medicines.
Domestic giants like Laurus Labs, Aurobindo Pharma, Cipla, and Strides Pharma might feel the pinch since HIV-related drugs contribute significantly to their earnings. It’s a big deal for these companies, which have long relied on this aid program as a major revenue driver.
*Pharma Stocks Take a Sharp Hit*
On Monday, Laurus Labs’ stock nosedived by 11.6%, while Strides Pharma saw a 5% drop. Aurobindo Pharma and Cipla weren’t spared either, with their shares declining by 2% and 1.1%, respectively.
To put it in perspective, 19 out of 20 pharma stocks faced declines. The uncertainty has clearly spooked investors, reflecting their concerns about the future of WHO-funded programs.
*Laurus Labs Speaks Out: Market Size Keeps Impact Manageable*
Laurus Labs stepped in to calm fears, stating that the overall ARV medicine market stands at $1.5 billion, accounting for 10% of global HIV funding. This, they say, minimizes the potential damage.
Still, the uncertainty has created ripples, and pharma companies are now facing challenges in planning their next steps.
*Source:* https://tinyurl.com/yc4h4f3b
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