Eastman Kodak stock skyrocketed this week after President Trump announced a deal to have the historical photography company make generic ingredients. Shares for Kodak were up by over 2700 percent at one point this week on the news. The NYSE halted trading several times due to the volatility in trading.
Under the Defense Production Act, the federal government has awarded Kodak a $765 million loan to jumpstart the ingredients’ production to address various medication shortfalls related to the coronavirus pandemic. The U.S. International Development Finance Corporation will administer the loan.
President Trump elaborated by stating, “Our 33rd use of the Defense Production Act will mobilize Kodak to make generic, active pharmaceutical ingredients. We will bring back our jobs, and we will make America the world’s premier medical manufacturer and supplier.”
According to the FDA, many generic pharmaceutical drugs in the U.S. see shortages on a chronic basis. Kodak said the company would produce ingredients that are deemed essential.
The photography turned pharmaceutical manufacturer will expand its current facilities in St. Paul, Minnesota, and Rochester, New York, to accommodate the new pharmaceutical arm.
New York Governor Andrew Cuomo said Kodak’s exploration into generic medications would result in 300 new jobs. He said, “Kodak has a long, storied history in New York State, and we’ve been working with them to develop an even brighter future.”
In 2012, the 131-year-old Kodak filed for bankruptcy protection as a new wave of digital cameras hit the market. Kodak suddenly became irrelevant and saw revenues plunge. The nostalgic imaging company hopes that its shot at drug production will mark its comeback.
“Kodak is proud to be a part of strengthening America’s self-sufficiency in producing the key pharmaceutical ingredients we need to keep our citizens safe,” commented Jim Continenza, Kodak’s Executive Chairman. “By leveraging our vast infrastructure, deep expertise in chemicals manufacturing, and heritage of innovation and quality, Kodak will play a critical role in the return of a reliable American pharmaceutical supply chain.”
The foray into pharmaceuticals isn’t the first time Kodak ventured into drug making. During the 1990s, Kodak dabbled in nonprescription medication production and made aspirin and other over-the-counter medicines. SmithKline Beecham eventually purchased the pharmaceutical venture in 1994 for $2.92 billion.
Peter Navarro, the trade adviser to the president, said, “It’s going to give the people of our country some assurance that when push comes to shove in pandemics like this, we won’t see what we’re seeing right now with over 75 countries restricting the sale of pharmaceuticals…”
One of the medications that Kodak will be producing is hydroxychloroquine, the controversial anti-malarial drug that President Trump has advocated for.