IDT Australia -September update
It takes a special kind of investor (some would say crazy) to invest in biotech companies. Extreme patience is required as the timelines for progress are often measured in years. In dispersed with this can be brief periods where the ground can shift under you surprisingly rapidly.
Many long-term IDT Australia investors would understand this all too well. After what many would call IDT’s “lost decade”, the last few months are proving that fortunes can turn around in a flash.
Opportunity knocks
Central to this turn around is the C19 pandemic and the unexpected opportunities it is providing to what’s left of Australia’s domestic pharmaceutical manufacturers.
Due to the massive media publicity of Australia’s woes in accessing the best C19 vaccines, the federal government need some good news fast if it has any chance of being re-elected in the poll due by May 2022. It is with this in mind that opportunities for IDT appear to be opening up.
Much of what was written about IDT in the July update remains accurate today, including commentary on Novavax and Moderna.
SRA
Recently IDT announced a “Sterile Readiness Agreement” (SRA)with the federal government. The near $11.5M provided by the government will fully fund the recommissioning of IDT’s 4000L containment facility, which had been mothballed for much of the last decade. This is a significant win for IDT.
Central to the SRA is the commitment to “bring IDT’s Boronia sterile manufacturing facilities into a state of sterile readiness so that IDT can use those facilities to potentially
provide assistance to Health in connection with Health’s rollout of COVID-19 vaccines in Australia.”
Under the terms of the SRA, “IDT agrees to ensure the production capacity of its sterile facility will be retained exclusively for Health or Health’s nominee until the earlier of: executing a Supply Agreement to deliver a COVID-19 vaccine, or 4 months from completion of IDT’s sterile
readiness works. There is no obligation on Health to use the IDT sterile facility or enter into any Supply Agreement.”
Based on this disclosure it would be fair to assume that IDT has more than a fleeting chance to become a population scale, vaccination manufacturer in the near term. To put this in perspective, the biotech giant, CSL, is currently the only Australian company with that capability.
Moderna
Recent media commentary that Moderna had abandoned the prospect of manufacturing its mRNA based C19 vaccine in Australia may be wide of the mark after the company’s CMO, Paul Burton, confirmed the company remained in discussion with the government about vaccine manufacturing onshore.
CSL recently ruled out the possibility of licensing mRNA vaccines and will instead work on developing their own IP. This development opens up short term opportunities for remaining applicants to the federal governments approach to market (ATM)
MIPS & IDT
In further developments with the MIPS/IDT partnership, a recent flurry of media articles announced IDT had taken delivery of NanoAssemblr machine used in the manufacture of mRNA vaccines, albeit of a relatively small scale.
The machine will be used to complete the vital step of inserting the mRNA into a protective fat particle, or more correctly, a lipid nano particle.
Clinical trials of the MIPS vaccine are due to begin next month so completion of the vaccine would presumably be imminent. Though production numbers will likely be measured in hundreds, rather than millions of doses, it will catapult IDT to being Australia’s first mRNA vaccine manufacturer.
Modern Manufacturing Initiative (MMI)
In another exciting development, IDT also announced news regarding the governments MMI – “The objective of the Australian Government’s Modern Manufacturing Strategy (Strategy) is to transform Australian manufacturing by building scale and creating income in high-value areas of manufacturing where Australia either has established competitive strength or emerging priorities. Accordingly, the aims of the Strategy are to help Australian manufacturers scale-up, build resilience, compete internationally and create jobs.”
IDT made a submission to the MMI in its own right though it is collaborating 4 leading Australian universities to develop “clinical-scale capability” and “commercialization paths for Australian research”.
Minimum MMI grants are $20M and the maximum amount is $200M and although grant funding would comprise “up to 33% of eligible project expenditure”, contributions from other sources such as state governments could see funding up to 65% of any approved project.
Grant funding would “be distributed between IDT and the research institutions” to further the aim of “advancing Australia as a significant player for mRNA and gene therapies.”
Conclusion
In the context of the usual biotech timelines, IDT is currently moving at a cracking pace. Though it’s natural for investors to want answers immediately, the pragmatic investors who show a little more patience may see their investment skyrocket in the months ahead.
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