Kodak Stores Over 1000% On Supply To Produce Generic Drug Ingredients

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Eastman Kodak (NYSE: KODK), the besieged film company that went bankrupt as digital cameras took over the world, has found a whole new business. Shares skyrocketed today upon learning that it had secured a $ 765 million government loan under the Defense Production Act to help the company begin producing generic drug ingredients.

It’s a surprising turning point for what was primarily a photography-based business. The deal is a game of improving America’s ability to rely on domestic production of pharmaceuticals amid the coronavirus pandemic. Kodak’s facilities in Rochester and St. Paul, Minnesota are the focal points of the new pharmaceutical arm of the company to be called Kodak Pharmaceutical. Kodak said it will focus on manufacturing essential ingredients that the Food and Drug Administration has identified as a national shortage.

Image source: Getty Images

Some analysts question the decision, wondering why the deal would not have been granted to a company already involved in the pharmaceutical industry. President Trump may have had a preference for a producer outside the current drug regime. Political tensions have escalated this week, as executives and pharmaceutical analysts react to recent Trump decrees to lower drug prices.

Whatever the reasoning, it’s a fascinating chance for Kodak to make a fresh start, and investors have responded optimistically. So far this week, the stock is up about 1150%. The company emerged from bankruptcy in 2013 and has struggled to grow for the past five years. Getting into a field like selling drugs could be a good avenue for the pioneer of photography.



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