The IDT Australia Limited (ASX: IDT) share price has soared into the green during early trade on Monday.
IDT shares are on the move as the pharmaceuticals company gave a key update.
Let's investigate further.
What did IDT announce?
IDT provided some additional colour on a previous announcement made on 22 July regarding the company "potentially providing cGMP manufacturing services" for an mRNA vaccine candidate.
Recall that IDT had previously stated it could manufacture up to 100 million doses of an mRNA vaccine within 18 months.
On Monday, IDT confirmed that these discussions "recently extended" to include the Commonwealth and Victorian Governments, alongside Monash University. IDT stated the discussions "are progressing well".
Moreover, IDT advised that its sterile readiness agreement with the Department of Health to bring "IDT's sterile manufacturing facility into a state of readiness to produce a Covid-19 vaccine" was finalised.
This agreement "provides for an exclusivity period" with the Australian government under one of two outcomes (as per the release):
- Executing a supply agreement for IDT to provide Covid-19 vaccine services to the department of heath, OR
- Four months from competion of IDT's sterile readiness works.
In other words, IDT's efforts to ready the facility is on a "vaccine agnositc basis", meaning the company will have the site prepared, and only if and when the government calls upon them to produce a Covid-19 vaccine will IDT do so.
In addition, an important note for consideration is that the decision to manufacture the vaccine is at the Government's discretion.
As a result, investors are buying IDT shares in droves after the news, pushing the IDT Australia share price higher.
IDT shares are now exchanging hands at 70 cents apiece, a 27% surge into the money from the open.
IDT Australia share price snapshot
The IDT share price has posted a year to date return of 278%, extending the previous 12 month's gain of 312%.
These returns have outpaced the S&P/ASX 200 Index (ASX: XJO)'s climb of around 25% over the past year.