Eastman Kodak Co.’s stock tripled recently after the announcement that the American technology company received a $765 million loan from the Trump administration to start a pharmaceutical ingredients company. The company, which typically produces camera-related products, has a long history of manufacturing chemicals for photographic film. They’re now entering unknown territory as they attempt to create key pharmaceutical ingredients for the U.S. population.
The COVID-19 pandemic has raised concerns about America’s dependence on China and India for active pharmaceutical ingredients (API) as the virus continues to disrupt critical supply chains. This loan is an effort to make the U.S. more self-sufficient when it comes to pharmaceuticals.
U.S. Officials Respond
While Kodak’s stocks surged after the announcement, many financial analysts are concerned about the investment. In 1988, Kodak acquired another pharmaceutical company, Sterling Drug Co., and sold the business 6 years later after failed attempts at producing API. On top of that, the company filed for bankruptcy in 2012 after moving too slowly in the digital photography movement.
“We find it puzzling why generic pharmaceutical companies who have the capabilities and know-how for this have not yet been awarded such contracts,” SVB Leerink’s Ami Fadia told investors on Wednesday. “Bringing pharma manufacturing back to the U.S. is no easy feat and (we) continue to believe those leading generic manufacturers will eventually be part of the solution.”
Fadia instead suggested companies that already have generic drug manufacturing knowledge like Amneal Pharmaceuticals Inc. or Mylan.
On the other hand, the decision looks hopeful in the eyes of other officials.
“It’s going to be the renaissance of the great state of New York as an industrial power,” Peter Navarro, President Trump’s trade adviser, said in a Tuesday interview with Fox Business. “And 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 is over 75 countries restricting the sale of pharmaceuticals, or something, to us, like face masks.”
New York Governor Andrew Cuomo also applauded the N.Y.-based company’s shift into drug production. The arrangement will result in the creation of 300 new jobs.
“Kodak has a long storied history in New York State, and we’ve been working with them to develop an even brighter future,” said Cuomo. “Never again do we want to rely on shipments from China or elsewhere in order to get lifesaving medical supplies.”