Why the IDT (ASX:IDT) share price is rocketing 25% on Wednesday

The company claims it can make 100 million doses of mRNA vaccine within 18 months.

| More on:
A happy doctor in a white coat dancing due to his excitement over the EBOS acquisition

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The IDT Australia Limited (ASX: IDT) share price is shooting 25% higher after The Sydney Morning Herald (SMH) reported the company is seeking to work with the federal government to produce mRNA vaccines in Australia.

At the time of writing, shares in the pharmaceutical company are trading for 46.5 cents each – up 25.68%.

Let's take a closer look at what's getting investors so excited.

IDT says it can manufacture mRNA vaccines in Australia

The COVID-19 pandemic has heralded the first wide-scale use of mRNA vaccines. The leading products in this space are the inoculations jointly produced by Pfizer Inc (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX), as well as the Moderna Inc (NASDAQ: MRNA) jab.

In an effort to secure domestic supply through the production of the vector for single-strand RNA of viruses, the federal government has been in talks with the companies in a bid to secure a licence for their COVID vaccines to be made in Australia. As well as IDT, CSL Limited (ASX: CSL) is interested in the production of mRNA vaccines on our shores.

IDT says what differentiates its offer from CSL's is it will use existing manufacturing capabilities located near Melbourne's Monash University to make the product. CSL is proposing 2 new facilities for the endeavour, according to the SMH.

The prospect of IDT being awarded a lucrative government contract may be exciting investors, judging by the IDT share price rise.

"This is an established site with an established equipment train in it, which we will expand, and I think that gives us a material time advantage," IDT Chief Executive David Sparling is quoted in the SMH as saying.

"We've formed an alliance with numerous research bodies around the country, including Monash University, and that builds an ecosystem for mRNA."

Dr Sparling further went on to tell the paper his company could produce "100 million doses within 18 months."

IDT says it wants to build an mRNA research facility near its production site if it secures the licence to make the product. Dr Sparling did not reveal any financial details to the SMH.

Motley Fool Australia reached out to IDT for comment. Dr Spalding responded that the reports in the SMH are accurate and that he had nothing further to add beyond what was already in the public domain.

IDT share price snapshot

Over the past 12 months, the IDT share price has increased 141%. The company's shares faced a similar boom when IDT revealed it was in discussions with the Victorian government over a proposed mRNA vaccine plant.

IDT Australia has a market capitalisation of around $104 million.

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Moderna Inc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Healthcare Shares

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

CSL share price leaping higher amid $1.9 billion funding news

ASX 200 investors are bidding up the CSL share price on Wednesday.

Read more »

Two happy scientists analysing test results.
Healthcare Shares

Mesoblast share price rockets 36% on breaking FDA news

ASX investors are sending the Mesoblast share price soaring following promising FDA news.

Read more »

a doctor in white coat and stethoscope stands in front of a building holding an electronic device in his hands.
Healthcare Shares

Guess which ASX 200 healthcare share is jumping 7% on a guidance update

This healthcare share is performing better than expected in FY 2024.

Read more »

a biomedical researcher sits at his desk with his hand on his chin, thinking and giving a small smile with a microscope next to him and an array of test tubes and beackers behind him on shelves in a well-lit bright office.
Earnings Results

Chemist Warehouse merger target Sigma reports 149% FY24 profit jump

This could be the last set of results from Sigma as we know it if its merger is approved.

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

1 ASX healthcare stock that looks severely undervalued

I think this stock looks too cheap to miss.

Read more »

Stethoscope with a piggy bank and hundred dollar notes.
Healthcare Shares

Own Medibank shares? Here's why it's a rewarding day for you

Shareholders are getting a healthy boost today.

Read more »

Health professional looking at a laptop.
Healthcare Shares

Are CSL shares a must-buy in March?

Let's see what analysts are saying about this high-quality company.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Healthcare Shares

This ASX healthcare stock is up 72% on FDA news and 'historic moment'

Huge gains are been recorded by this stock on Tuesday. But why?

Read more »