Why are shares of IDT Australia (ASX:IDT) soaring high?

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Why are shares of IDT Australia (ASX:IDT) soaring high?

 Why are shares of IDT Australia (ASX:IDT) soaring high?
Image source: Monster Ztudio, Shutterstock.com

Highlights

  • Share price of biotech company IDT Australia Limited (ASX:IDT) skyrocketed since last week.
  • Investors are mulling on IDT’s potential to become a manufacturer of mRNA vaccines in Australia.
  • In a bid to meet the domestic requirement of the Covid 19 vaccine, the federal government has been negotiating with the companies to secure a licence for their COVID vaccines production in Australia.

Share price biotech company IDT Australia Limited (ASX:IDT) was trading 29% up during the intraday session. However, the stock closed at AU$0.685, up 24.545% from the previous close.

The company’s share price has been in an upward journey ever since a market release showcased IDT as a potential manufacturer of mRNA COVID-19 vaccine candidate.

What’s the hype regarding IDT?

According to today’s market update, in addition to IDT’s announcement on 22 June 2021, strong media interest has been witnessed regarding IDT's continuing discussions with the Victorian Government and Monash Institute of Pharmaceutical Sciences (MIPS).

The discussion is over IDT providing cGMP manufacturing services to produce MIPS’ receptor binding domain mRNA COVID-19 vaccine candidate.

On Monday, IDT said that the discussions are progressing well and include the Commonwealth government,  Victorian Government and Monash University at present as well.

Image Source: © Spukkato | Megapixl.com

Moreover, IDT mentioned that it has finalised its sterile readiness agreement (SRA) with the Department of Health. The SRA intends to recommission activities to make IDT’s Melbourne based sterile manufacturing facilities sterile ready for IDT to use those facilities to assist the Department of Health in rolling out COVID-19 vaccines in Australia.

Related Article: IDT Australia (ASX:IDT) eyes best day since 1989 on exploring production of COVID-19 vaccine

According to the release, IDT has agreed on its sterile facility’s production capacity to be retained exclusively for the Department of Health till executing a Supply Agreement to deliver a COVID-19 vaccine or four months from completion of IDT's sterile readiness works.

IDT expects the rest of the activities regarding the sterile facility recommissioning and sterile readiness works to continue for the next 1-2 months. After completing these activities, IDT will maintain the facility in a sterile state, exclusively for the Government.

Covid jab business entices firms

Since the outbreak of Covid 19, more and more biotech companies are jumping into the fray of getting regulatory approvals and government nods for manufacturing mRNA vaccines. Australia is witnessing an alarming surge in daily Covid-19 cases. The Federal Government is leaving no stone unturned to vaccinate as many people as possible to contain the spread of the deadly virus.

Pfizer Inc (NYSE: PFE), BioNTech SE (NASDAQ: BNTX), and Moderna Inc (NASDAQ: MRNA) are prominent jab producers today globally.

In a bid to meet the domestic requirement of the Covid 19 vaccine, the federal government has been negotiating with the companies to secure a licence for their COVID vaccines production in Australia.

Earlier, CSL Limited (ASX:CSL) had welcomed the government's plan to develop onshore mRNA vaccine manufacturing capability. The biotech giant had also expressed interest in the domestic production of mRNA vaccines with the support of the Federal Government to protect the country from the threat of any future waves of Coronavirus. 

On 21 May this year, the Scott Morrison government opened its "approach to market" (ATM), wherein it sought proposals from manufacturers to set up an end-to-end mRNA vaccine manufacturing facility in Australia. Reportedly, over a dozen applications, including those from CSL, IDT, BioCina, and Luina Bio are now being assessed for this purpose.

Related Article: PM sees hope for AstraZeneca Vaccine in Australia while lockdowns still a reality

Bottomline 

IDT has a market capitalisation of AU$110.33 million and has given a return of 302.94% in a year. Given the drastic jump in the shares of IDT in recent days, it can be said that the possibility of IDT being awarded a high-paying government contract may be enticing to investors. However, the discussions are still at an ongoing stage. It remains to be seen if the federal government can reach a consensus with vaccine producers like Pfizer or Moderna to license their mRNA vaccine technology to an Aussie partner.

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