IDT Australia Eyes Best Quarter in Two Years as Sanofi Partnership Pays Off

In its Q3 FY26 update, IDT Australia (ASX: IDT) has forecast its best fourth quarter performance since beginning its strategic transformation over two years ago, despite March quarter revenue being impacted by scheduled maintenance and facility commissioning. The Company expects to narrow its FY26 EBITDA loss to $1.5M-$2M, representing a 68%-76% improvement on the $6.3M EBITDA loss reported in FY25, while revenue from its three manufacturing verticals is forecast to reach $15M-$16M, up 4%-11% on FY25’s $14.4M.

IDT Australia Sanofi Preferred Vendor designation opens global pharma doors

IDT Australia has been designated by Sanofi as a “Preferred Vendor” following the successful mRNA vaccine development partnership between the two companies. This designation is highly coveted within the pharmaceutical manufacturing sector and facilitates IDT’s access to submit proposals on additional Sanofi programs across multiple business units, therapeutic areas and dosage forms.

For investors, Preferred Vendor status with a top-10 global pharmaceutical company validates IDT’s quality standards and provides a pipeline of potential contract opportunities beyond the initial mRNA work.

What is Preferred Vendor status in pharma CDMO?

Contract Development and Manufacturing Organisations (CDMOs) compete for work from large pharmaceutical companies. A “Preferred Vendor” designation means the CDMO has passed rigorous quality and compliance reviews and is pre-approved to bid on multiple programs.

This designation reduces the procurement cycle for future contracts and positions the vendor ahead of competitors who lack the designation. For investors, it signals recurring revenue potential and validation from a creditworthy counterparty.

US policy shifts creating tailwinds for controlled substances work

Recent US policy developments are reshaping the regulatory landscape for controlled substances, creating a favourable environment for IDT’s specialty manufacturing capabilities:

1. Earlier this month (April 2026), President Trump directed federal agencies to remove barriers and provide financial support to develop psychedelic drugs as treatments for serious mental illnesses including PTSD.

2. These regulatory shifts are driving increased investment and programme activity in the controlled-drug sector.

3. IDT has already secured new work from an emerging controlled-drug manufacturer/distributor pursuing US market opportunities.

4. The Company expects demand to increase for its API and Specialty Orals services as a result.

US policy support for psychedelic-assisted therapies and cannabinoid medicines expands IDT’s addressable market in higher-margin specialty manufacturing work.

Recommissioned facilities driving margin improvement

IDT is beginning to realise the financial benefits of its multi-year programme to recommission mothballed manufacturing assets, including the 4,000-litre API plant and key sterile fill-finish line. The recommissioned assets provide IDT with:

• Enhanced flexibility and agility to run parallel manufacturing streams across API, sterile fill and specialty oral products
• Lower marginal cost per unit, as fixed overheads are spread across a larger production base
• Improved competitiveness when bidding for global CDMO contracts, particularly where quality and turnaround time are critical
• The ability to capture higher-margin work that was previously out of reach due to capacity constraints

The Company is already seeing increased utilisation across both the API and sterile fill assets, supporting the expectation for a strong Q4-FY26. Capital invested in prior periods is now generating utilisation uplift and improved unit economics.

Fierce Pharma partnership and Sanofi endorsement target US decision-makers

IDT has entered a strategic partnership with Fierce Pharma, one of the industry’s most influential media and events organisations, to expand its reach into global pharmaceutical and biotech markets. As part of the partnership, IDT will participate in Fierce Biotech Week (12-14 May) in Boston, a premier industry gathering attended by senior decision-makers from major pharmaceutical companies and emerging biotechnology organisations.

Fierce Pharma will host a dedicated event where IDT presents its capabilities to a curated audience of procurement leaders and technical executives. Sanofi has agreed to speak at the event in support of IDT, providing independent validation of IDT’s quality, reliability, and execution capabilities.

Third-party endorsement from an existing Tier 1 customer at a major industry gathering provides credibility that is difficult to replicate through marketing alone.

Q3-FY26 revenue impacted by operational factors

Q3-FY26 total operating revenue fell 25.2% versus the previous corresponding period and 37.7% quarter-on-quarter to $2.6M. The quarterly weakness was driven by scheduled maintenance shutdowns and commissioning of key facilities, rather than structural issues with the business model. Despite the weaker March quarter result, financial year-to-date revenue remained 6% ahead of the previous year.

Management framed the quarterly weakness as temporary and operational, with the strategic realignment strategy remaining firmly on track.

Revenue breakdown across IDT’s three verticals

API Manufacturing

Q3-FY26 API revenue of $0.5M was down from $1.0M in Q3-FY25 and $1.5M in Q2-FY26. The decline reflects the progression of contracts to other verticals rather than lost business.

IDT expects a rebound in API work in Q4-FY26. API Manufacturing is being re-established as a cornerstone of the business, targeting clients with the financial resources and drug pipeline to award follow-on contracts across the other two verticals.

Specialty Orals

Q3-FY26 revenue of $0.7M was down from $1.8M in Q3-FY25 but up from $0.6M in Q2-FY26. The vertical is being sharpened around radiopharmaceuticals while continuing to service medicinal cannabis and psychedelic drugs clientele.

This vertical is positioned to benefit from the US policy tailwinds discussed earlier, with new work already secured from an emerging controlled-drug manufacturer/distributor pursuing opportunities in the US market.

Advanced Therapies (Sterile Fill)

Q3-FY26 revenue of $1.3M was down from $2.4M in Q3-FY25 and $2.0M in Q2-FY26. This vertical is being positioned to capture higher-value CDMO programmes such as those involving mRNA technologies. The Sanofi mRNA vaccine work sits within this vertical.

Executive Chair outlines path to profitability

Mark Simari, Executive Chair

“We have made further progress in our strategic realignment of the business, and the results will be more obvious in our 2026 full year results. The changes we have made to the business in optimising resource allocation and focusing on recurring work from quality customers mark an important evolution of IDT’s business model – one that will return our Company to profitability in the near-term and drive additional growth in the periods beyond.”

Management is explicitly guiding toward profitability in the near-term, reinforcing the trajectory implied by the 68%-76% EBITDA improvement guidance.

What to watch in the quarters ahead

Investors should monitor the following catalysts over the next 6-12 months:

1. Q4-FY26 results to confirm whether the forecast “best quarter since transformation” materialises
2. New contract announcements stemming from the IDT Australia Sanofi Preferred Vendor status
3. Additional controlled-substances work driven by US policy shifts supporting psychedelic-assisted therapies
4. Utilisation rates at recommissioned API and sterile fill facilities
5. Outcomes from Fierce Biotech Week participation and Sanofi-supported event in May

These milestones provide a clear roadmap for tracking execution against management guidance and assessing whether the strategic transformation is translating into sustained financial improvement.

Ready to Explore IDT Australia’s Manufacturing Transformation?

With Sanofi Preferred Vendor status unlocking a pipeline of global pharma opportunities and newly recommissioned facilities driving margin expansion, IDT Australia is executing a strategic realignment designed to return the business to profitability in the near-term. The Company’s three-vertical manufacturing platform—spanning API, Specialty Orals, and Advanced Therapies—is now positioned to capture higher-value CDMO work across emerging therapeutic areas including mRNA, psychedelics, and radiopharmaceuticals.

For detailed insights into IDT’s facility capabilities, client partnerships, and growth strategy, visit the IDT Australia investor centre. Access the full Q3-FY26 quarterly update, management commentary, and technical specifications of the recommissioned manufacturing assets that are underpinning the Company’s path to sustained EBITDA improvement.