World-wideThiotepa shortages bonus for IDT

Reflecting on advice from March 2016 - IDT is contracted to supply the cytotoxic API to the manufacturers of the injectable dosage forms and was estimated to be worth over $12m over the 5 year period from 2015 to 2020.

"9 March 2016, Melbourne: IDT Australia Limited (IDT.AX) has secured an additional four years of contracted earnings for its oncology drug active pharmaceutical ingredient (API) Thiotepa. IDT is one of a very small number of
manufacturers of Thiotepa API globally.

The drug continues to be used in relapsing hormone dependent cancers and is also seeing market growth through its
use in preparing patients for bone marrow transplants. The current agreement was scheduled to expire at the end of CY2016. The exclusivity and minimums covered by this extension apply for two years in one major jurisdiction and four years for the rest of the world. Under the terms of the extension, both parties will be free to develop products using the
API material. The volumes contracted to be sold rise 67% above 2015 levels in the first two years of the extension.
During the period of exclusivity the price increases by 57% over the previous contractual price. The aggregate impact on IDT of these changes will result in income over the next five year period of between AUD12.2 million to AUD13.4 million at today’s exchange rate. The agreement extension can be renegotiated and further extended with the consent of
both parties at its conclusion."

There continues to be world-wide shortages of this important chemotherapeutic agent and has been on the FDA list of drug shortages constantly since 2009.

So this has been and continues to be a very important earner for IDT. It would not surprise if Thiotepa's revenue stream continues to increase significantly above budget. The sooner they can get approval for their own finished Thiotepa dosage forms the better.

It will be very interesting to see if IDT's half year financial report due next week shows significant year on year revenue improvements for the first half of the financial year. We will find out if Temozolomide (marketed by Mayne Pharma in the USA) has gained any significant market penetration. Looking forward also to news that IDT's prioritised generic products are finally making good progress through the FDA.