Now you may ask; “What has a tech company, Eastman Kodak, got to do with COVID-19 drugs or vaccines? Well, news emerged yesterday that the US government under President Donald Trump is giving Eastman Kodak $765 million to produce vital coronavirus-related pharmaceutical components.
Anyone familiar with business case studies would cite Kodak as a company who was so blinded by its success in the film industry that it completely missed the rise of digital technologies, hence its decline into oblivion. The company filed for bankruptcy protection in 2012, exited legacy businesses and sold off its patents before re-emerging as a sharply smaller company in 2013.
News of the new loan caused shares in the company to jump by 200% in Tuesday trading and the rally continued on Wednesday and the shares ended up 318%. The New York Stock Exchange had to halt trading in the shares 20 times throughout Wednesday’s trading session as the stock soared, climbing more than 650% at its highest.
The $765 million loan is to help Kodak launch Kodak Pharmaceuticals, a new division that will produce pharmaceutical ingredients deemed critical by the U.S. Department of Defense (DOD) and the Food and Drug Administration (FDA). The funds will be issued by the U.S. International Development Finance Corporation (DFC) at the direction of President Donald Trump under the Defense Production Act (DPA).
The move is intended to bolster the nation’s stockpile of drugs that are in short supply during the coronavirus pandemic, as well as reduce the country’s reliance on foreign manufacturers. “This is about assuring our supply chains now and in the future,” White House Supply Chain Task Force Lead John Polowczyk said in a press release.
Why Kodak?
I am not sure why the US government is giving Kodak this loan. Kodak is not known for pharmaceuticals or drug production. However Kodak CEO Jim Continenza told CNN’s Julia Chatterley in a chat that the company already manufactures key materials for some pharmaceuticals, so its new mission is just an expansion of that capacity. He however said that it will take around three to three and a half years to build out the new production capacity.
Continenza adds that the company will hire some 359 workers, most in New York state, and create approximately 1,200 indirect jobs
