Say cheese! Kodak, a camera company, is venturing into the drug making business.
After securing a federal loan of $765 million, the photo camera-focused tech company Kodak is now going to produce components needed for manufacturing generic drugs as part of an effort to minimize dependency of medical needs from other countries. The government’s move is a first step in invoking the Defense Production Act to shift reliance more on local industries.
Following the news breaking out at The Wall Street Journal and the announcement from the White House, shares for Kodak skyrocketed to over 60 percent on Tuesday. Different pharmaceutical businesses like Pfizer and Moderna are ramping up the process in developing a much awaited effective vaccine for the coronavirus. Before the public knew of this huge change for the company, Kodak’s market value is $115 million. And then the day closed with the photography brand boosting to triple of its market value at $347 million.
A U.S. government loan will help Kodak remake itself as a drug producer. Fujifilm is years ahead in a similar effort. https://t.co/4I6nmy67oV
— FORTUNE (@FortuneMagazine) July 30, 2020
Shift of focus
Executive chairman for the camera-turned-drug maker company Jim Continenza expressed, “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.” He also said during the Kodak Pharmaceuticals launch that scaling up production would take roughly four years.
US President Donald Trump told the press on Tuesday: “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.”
Depth of (field) experience in chemicals
According to the company’s website, “Once fully operational, Kodak Pharmaceuticals will 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 directly.”
Drug components that are expected from Kodak include ingredients for making hydroxychloroquine, which the administration was reported to have believed as the cure for the novel coronavirus. However, even National Institute of Allergy and Infectious Diseases director Anthony Fauci himself has said lots of trials have debunked such claims.
Contineza stated that Kodak has an advantage by being in the manufacture of chemicals, which they use in their camera business. He said: “Kodak will play a critical role in the return of a reliable American pharmaceutical supply chain.”
Previously, the company has attempted to shift business focus into drug making by acquiring pharmaceutical company Sterling Drug in 1988 before finally selling pieces of the company. On 2012, the company, which was once huge for their camera business, filed for bankruptcy after people moved on to digital photography.