IDT Navigates Global Tariffs, Secures $4.5M in New Pharma Contracts

Strong Quarterly Growth Amid Global Uncertainty

IDT Australia Limited (ASX: IDT) has delivered a compelling update for the quarter ended 31 March 2025, reporting a 30.4% increase in unaudited revenue to $4.1 million compared to the previous corresponding period. This growth is particularly notable given the traditionally slow start to the calendar year for contract signings in the pharmaceutical manufacturing sector.

The company’s ability to secure $4.5 million in new contracts during Q3FY25 underscores its expanding footprint in the pharmaceutical development and manufacturing landscape. Despite ongoing global trade volatility and tariff concerns, IDT’s CEO Paul McDonald highlighted that demand remains resilient, with clients increasingly seeking regional manufacturing partnerships to mitigate tariff risks.

Robust Pipeline Fuels Optimism

Central to IDT’s positive outlook is its substantial pipeline of open proposals, valued at $61.8 million. While these figures are not weighted by conversion probability, the company’s historical contract conversion rate of 35% to 40% suggests a strong potential for future revenue growth. The surge in proposals, particularly within the Active Pharmaceutical Ingredients (API) vertical, bodes well for follow-on opportunities in finished drug manufacturing under the Advanced Therapies and Specialty Orals verticals.

The API vertical itself experienced a remarkable 72.4% increase in quarterly revenue to $2.4 million, an 812% jump from the previous quarter, signaling accelerating demand for IDT’s high-potency and high-containment pharmaceutical manufacturing capabilities. This momentum is further exemplified by a recently announced five-year agreement with Nacuity Pharmaceuticals, involving an initial $3.2 million statement of work to produce both active ingredients and finished tablets for an investigational therapy targeting retinitis pigmentosa.

Diverse Vertical Performance and Market Positioning

While the Advanced Therapies vertical more than tripled its revenue to $865,000, capitalizing on emerging technologies like Antibody Drug Conjugates and mRNA, the Specialty Orals segment faced a temporary setback with a 56.5% revenue decline due to an oversupply in the medicinal cannabis market. However, new contracts worth $741,000 and growing interest in psychedelics and CNS disorder treatments suggest a promising rebound.

IDT’s comprehensive end-to-end manufacturing services, combined with Australia’s favorable regulatory environment and skilled workforce, position the company well to capitalize on long-term industry tailwinds. The company’s cGMP-compliant facilities, regularly audited by the US FDA and Australian TGA, further reinforce its credibility as a trusted partner for both local and international clients.

Looking Ahead

With a growing base of repeat business and strategic contracts transitioning from clinical trials to commercialisation, IDT appears poised for sustained growth. The company’s focus on high-value pharmaceutical manufacturing niches and its ability to navigate a complex global trade environment will be critical as it seeks to convert its substantial proposal pipeline into binding contracts.