MMI translation stream round 2

The MMI translation stream round 2 is the likeliest catalyst for growth for IDT in the short term. I also think IDT's chances or securing a grant from this stream are higher than the Collaboration one. As per the government's website, the translation stream is described as the one that "helps Australian manufacturers translate high quality research and ideas into commercial outcomes." as opposed to the Collaboration stream which "supports large-scale manufacturing projects with business-to-business collaboration and business-to-research collaboration, to build economies of scale".

Further, according to the MMI translation stream guidelines: "Projects under the Manufacturing Translation Stream can include collaboration between manufacturing businesses and a research institution to invest in the creation of new or improved products or processes. As a general guide, we anticipate projects undertaken through this stream would considerably advance their maturity level on the Technology Readiness Level (TRL) scale by the conclusion of the project (refer to Glossary section 14). For example, this could include the production and deployment of manufacturing of prototypes to take to market or for final validation and testing or undertaking final trial production runs of a new manufacturing process before scaling up to production volumes. At the successful completion of your project, the product, process or service should be close to or ready for full commercial deployment."

This fits where IDT is at - manufacturing for research institutions like MIPS to develop for instance a new COVID vaccine using mRNA. Hopefully this concept would have been expanded in the proposal to other vaccines (and other mRNA applications) from other labs to make their case more compelling. If I recall properly the original announcement re the collaboration stream grant application mentioned the like of Uni of Melbourne and ANU.

On reflection, IDT does not have any product to manufacture at a large scale as yet (now that the Feds have made a separate deal with Moderna) so I feel like the translation stream is definitely a better match for IDT's current situation.

There were $72M awarded in round 1 across 16 companies for an average of $4.5M per grant (lowest being $1.25M and highest being $9.8M), 3 grants were under the medical products segment (the other eligible sectors being defense, space, minerals, food and beverage). All details are available on this link. Interestingly there were no companies based in VIC that were awarded a grant in the first round. I think this could play in IDT's favour for round 2. The government is planning to spend another $280M in round 2 for the translation stream. Under the MMI, up to 50% of a project’s total cost can be funded by the government and the grant value can range from $1 million up to $20 million.

The timing for the award of the grant is as per the below table (Extract from the government guidelines). Applications for round 2 closed on the 14th of January 2022 and using 12 weeks as a guide, we could expect to hear back around mid April. From my research round 1 applications closed late April 2021 and awards were granted late July which confirm the 12 weeks timeframe. And with the federal election around the corner, I imagine they would be happy with an outcome in April.



So how much money are we talking about?
- the average for round 1 was $4.5M and the grants can be up to $20M and for up to 50% of the project cost
- IDT has $13M cash in the bank (at the end of 2021) and the rules of the federal grant allow them to use as part of their 50% of the cost up to 25% from other funding sources which could include the VIC State government (which is very proactive in this space through mRNA Victoria and has already partly funded the manufacturing of the first MIPS vaccine doses).
Possibly (and I have listed above some of the assumptions I am working on) we are looking at a project between $10M and $30M - this might not be as transformative for the company as some might hope but it would surely provide a massive boost to their development and hopefully their share price.

What can you do with this sort of money?
I will be honest... I don't know and I would welcome feedback from people within industry on this... Assuming mRNA is their focus for the project, they could procure more equipment to manufacture doses of the MIPS vaccine at the scale required for stage 2 trials? (or other mRNA based drugs/vaccines)?