IDT falls 40pc after Morrison government rejection; what now for the company's COVID vaccine manufacturing ambitions?

This week has been a good time to be a company helping in the front line fight against COVID-19 but the dreams of IDT (ASX:IDT) to be one of them appear to have been crushed yesterday.

Since March the pharmaceutical manufacturer, which was founded back in 1975, has sought to help in Australia’s COVID-19 vaccine production effort.

The launch of a feasibility study in March sent shares more than doubling in the following week.

At the time the Federal Government was producing the AstraZeneca vaccine but is now looking to make mRNA vaccines instead – specifically the Moderna vaccine.

And earlier this week it announced it would be building a new facility for this purpose and hoped to have it running by 2024.

Unfortunately, it wouldn’t be with IDT.

The rejection sent shares plunging ~40% on Thursday.

IDT (ASX:IDT) share price chart

What now for IDT?

Despite this setback, IDT told shareholders all was not lost as it fights to have some role in the fight against COVID-19.

It said its Collaboration Stream Grant application, to run a facility in its own right which could help with mRNA vaccines, remained live. Earlier this month it manufactured a separate mRNA vaccine candidate.

This candidate is being developed by Monash University and while currently avaliable vaccines target the whole spike protein, this one only targets the Receptor Binding Domain, a smaller function sub-unit of the spike protein.

It is hoped this will completely prevent infection and it could be faster to modify in response to new variants.

But even accounting for the faster pace COVID-19 vaccine candidates can do clinical trials and have them approved, it is still clearly some time away with the drug not expected to start Phase 1 trials until next year.