Though the Kodak brand was once synonymous with cameras and film, it has shifted successfully into the pharmaceutical industry.
In late July, the US government announced it had secured a $765 million loan to help Kodak develop ingredients to be used in generic coronavirus drugs. The loan was granted as a first-of-its-kind loan under the Defense Production Act.
White House spokesman Peter Navarro explained that the Kodak loan was granted in an effort to reduce America’s dependence on foreign suppliers. “If we have learned anything from the global pandemic,” Navarro said, “it is that Americans are dangerously dependent on foreign supply chains for their essential medicines.”
Announcement Saw Kodak Stock Soar
Immediately after the White House announcement, Kodak’s stock soared.
It has been a penny stock since 2018, trading below $5 a share consistently and only valued around $115 million. However, Kodak enjoyed a dramatic boost after news of the government’s loan was announced, surging to a market value of $2 billion before balancing out around $1.5 billion.
“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,” said its executive chairman Jim Continenza.
The company will use its loan to begin producing components for generic drugs– specifically, active pharmaceutical ingredients (APIs), the chemicals that make drugs do their job.
Kodak’s Pivot to Pharmaceuticals
Though pharmaceuticals don’t seem related to photography at first glance, tenured Kodak employees disagree. According to Essie Calhoun-McDavid, who worked at Kodak from 1982 until she was laid off in 2011, “We are a chemical company. We already have the infrastructure and the background that’s needed.”
Chairman Continenza agreed, saying Kodak will utilize its “vast infrastructure, deep expertise in chemical manufacturing, and heritage of innovation and quality,” to support America’s pharmaceutical supply chain amid the pandemic.
Kodak plans to manufacture pharmaceutical ingredients that the FDA has identified as essential, but that are currently experiencing a chronic shortage nationwide. Factories in St. Paul, Minnesota and Rochester, New York will be expanded and revitalized to meet these needs.
According to Kodak, once fully operational “Kodak Pharmaceuticals would have the capacity at Eastman Business Park to produce up to 25 percent of active pharmaceutical ingredients used in non-biologic, non-antibacterial, generic pharmaceuticals while supporting 360 direct jobs and an additional 1,200 indirectly.”
U.S International Development Finance Corporation (DFC) Chief Executive Officer Adam Boehler summed up the federal government’s goal during his announcement of Kodak’s loan: “Today, we are bringing together the significant resources and expertise of the private sector and U.S Government. We are pleased to support Kodak in this bold new venture.”