IDT (ASX) IDT media thread

Originally posted by Ratfink: ↑

Below is a cut/paste of a blog post I wrote. Sometimes HC screws up the formatting of these posts. Apologies if it does.

https://www.undiscoveredbiotech.com/2021/07/17/idt-july-update/
IDT Australia - July update
IDT are not terribly forthcoming with regular updates to markets but we can begin to piece together various sources to picture what the near future may look like.
The submissions deadline for theAustralian governments approach-to-market (ATM)to onshore mRNA manufacturing passed on July 16th, with around a dozen applications.
Most of the applicants will not have a realistic chance of winning the government contract, mostly due to the fact that they do not have either FDA/TGA approved facilities or hands on experience manufacturing pharmaceuticals in Australia.
The Australian government will weigh up all of the proposals, believed to number around a dozen, and I’ve outlined some of the likely candidates here.
1) IDT Australia.
Since the late 1970’s IDThave been manufacturing complex small molecule pharmaceuticals in their FDA/TGA approved facilities in the Melbourne suburb of Boronia.
Since the pandemic began, IDT have made a number of submissions to the Australian government regarding its capacity to produce pharmaceuticals, including vaccines, onshore.
It’s unclear whether IDT have previously manufactured vaccines but their long track record of pharmaceutical production, along with the fact that IDT are the last remaining Australian manufacturer of active pharmaceutical ingredients (API’s) would suggest that the company will be involved with the government contract in some capacity.
Even if another company wins the government manufacturing contract, IDT are likely to be a supplier of the key components needed for production.
The Australian government is looking for proposals that deliver an end-to-end vaccine capability on a population-scale. IDT have a market cap of circa $75M with cash on hand of around $7.5M and would require government funding of more than their market cap.
As impressive as IDT’s facilities are, and I’ve seen them first hand, the sheer scale required would indicate the company’s most likely pitch is as part of a consortium.

2) CSL.
There can be little doubt that CSL is the hot favorite. The company is well funded, has global reach, regularly manufactures other vaccines and has a proven track record of delivering on its promises. CSL has world class facilities and its ability to attract the best people is unmatched in this country.
The company is the only Australian based company with the resources and experience to address every requirement the taskforce has laid down to manufacture end-to-end on its own.
Though CSL are likely to be strongly favored by the federal government the same may not be true for the holders of the patents to currently approved mRNA vaccines, Moderna and Pfizer/BioNTech.
CSL may be seen as a future competitor to these companies and it remains to be seen if they wish to transfer their tech know-how to a company that may compete with them in the years ahead.
3) BioCina.
The South Australian government have been lobbying hard to win the federal government contract to manufacture mRNA vaccines at the former Pfizer site, now owned by BioCina, in the Adelaide suburb of Thebarton.
BioCina will partner with the University of Adelaide and have FDA/TGA approved facilities in place along with local clinical trial facilities (ironically these facilities were recently divested by IDT Australia).
Despite facilities being located in Adelaide, BioCina is owned by a US investment company and it remains unclear how this may affect this company’s pitch to the Aussie government. It should be noted that the current approach to market is not restricted to Australian companies.
BioCina will also likely struggle with taskforce requirements to have access to mRNA IP or vaccine manufacturing experience. Lack of access to raw materials may be an issue also.
Despite the lobbying, the most realistic chance BioCina have is also as part of a consortium.
4) BioDiem
Another company likely to have made a pitch is the Melbourne based, BioDiem, who propose to manufacture mRNA vaccines on the existing GlaxoSmithKline site not far from the IDT site in Boronia.
BioDiem certainly have experience with vaccines but have previously contracted out their vaccines manufacturing to low-cost countries. The complete lack of hands-on manufacturing experience, along with the fact that the government would need to fund the purchase/ fit out of the GSK site probably draws a line through this bid.
Government decision
The Australian governments Vaccines Manufacturing Taskforce will now consider the merits of all applications before making a decision later in the year. There is no guarantee that the process will result in any proposal being funded.
Among the key considerations for the government taskforce will be candidates’ ability to access mRNA intellectual property (IP). The most obvious method of obtaining this IP is to partner with an existing player such as Moderna.
The video linked below provides further clarity on the federal governments guidelinesfor the ATM.
At around the 28 minute mark there’s a Q&A session with some of the questions indicating a few companies were hoping to have their hands held.
https://youtu.be/FOiKD7zlm8I
IDT may have found a different way to access mRNA IP in an unexpected way, detailed below.
MIPS
Late last month Monash University received $5M grant from the Victorian governments $50M set aside to develop mRNA manufacturing in that state.
https://www.monash.edu/news/articles/monash-receives-$5m-grant-for-covid-19-mrna-vaccine
Monash Institute of Pharmaceutical Science** (MIPS) collaborating with the Doherty Institute have developed a mRNA vaccine candidate right here in Melbourne and will conduct a phase 1 clinical trial beginning in October 2021.
The press release from MIPS mentions a “Melbourne-based manufacturing company” preparing the product for the trial. Though it was not mentioned in the PR, that company is IDT. Evidence is provided below.
https://research.monash.edu/en/projects/development-of-the-mipsdoherty-mrna-sars-cov-2-vaccine-for-phase-
A tweet from Professor Peter Doherty on June 20thalso let the cat out of the bag.
https://twitter.com/profpcdoherty/status/1406444183355748353

A PR from IDT a couple of days later on June 22ndwas pretty vague.
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02386811-3A569219?access_token=83ff96335c2d45a094df02a206a39ff4
It’s likely IDT will provide an update on this development when it releases its FY results in late August.
Moderna
Considerable media focus on the government’s mRNA onshoring process appear to be missing the other huge possibility – Moderna setting up shop locally.
Moderna recently told investors it planned to set up Australian operations in 2021 and quietly filed to set up a local company, Moderna Australia.
It’s not yet clear how Moderna intend to move forward. Is it a clue that one of the four directors (James Rozsa) of Moderna Australia is a merger and acquisitions lawyer?
Regardless, local biotech companies will be clamoring to partner with Moderna.
Novavax
Media and investors appear to have forgotten Novavax is looking at the possibility of Australian manufacturing its vaccine candidate. The vaccine is in the final weeks ofits phase 3 trialand will read out it’s headline numbers in the next few months Preliminary data showed efficacy around 90%.
The Australian government has ordered 51M doses of the protein-based vaccine and Novavax has already indicated that they’re looking for a local manufacturing partner.
Novavax’s chief commercial partner isreported to have saidthe company has had early conversations with potential manufacturing partners to produce doses locally, for Australians and to export across the Asia-Pacific region.
CSL appear an obvious partner for Novavax at first glance however it’s likely CSL will focus instead on mRNA vaccine opportunities which may open the door to IDT. This possibility has not been factored into IDT’s share price.
Conclusion

Winning a contract to manufacture any vaccine candidate (mRNA, protein, etc) or even the supply of raw ingredients would be transformational for IDT.
To that end IDT have put considerable time and resources into its vaccine pitch and have been quietly hiring key staff to support its proposals. These people will add to staff costs however the fact that the company is hiring indicates its level of confidence in the future.
Investors should also understand that as exciting as winning a government vaccine contract would be for IDT, the significance of the purported deal with MIPS has long term implications. This deal will deliver mRNA capability to IDT, a capability few companies globally currently possess.

**MIPS was formerly called the Victorian College of Pharmacy and IDT was spun out of that organization in 1975 as the Institute of Drug Technology.

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Really fantastic post @Ratfink, thanks for putting in the effort. I agree with @bluekidds, you write very clearly and your conclusions are measured, but still give grounds for optimism!

Tonight's Newspoll results put a bit more pressure on the govt to make more headway with vaccination policy, but despite this, based on its general worldview and past behaviour, I believe it will continue to focus on short-term import supply options (such as bringing forward Pfizer deliveries, waiting for Moderna to come online later this year, and it's deal with Novavax for the medium term). Long-term investment in manufacturing capacity is just not something Liberal governments like to do if they have any choice in it.

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IDT media thread, page-296

IDT Australia - July update

Government decision

MIPS

Moderna

Novavax

Conclusion

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IDT media thread, page-296

IDT Australia - July update

Government decision

MIPS

Moderna

Novavax

Conclusion

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