Thomson Reuters
- Kodak’s shares rose 200% on Tuesday after the camera company obtained a $ 765 million government loan to manufacture drug ingredients in response to the pandemic.
- The group plans to launch a pharmaceutical division that will produce essential drug components currently in “chronic national shortage.”
- President Trump touted the deal as “one of the most important deals in the history of the American pharmaceutical industries” at a press conference on Tuesday.
- Kodak shares rose as much as 66% in premarket trading on Wednesday.
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Kodak’s shares soared 200% on Tuesday after the camera company secured a $ 765 million government loan to produce generic drug ingredients in response to the coronavirus pandemic.
The rise in the stock price more than tripled Kodak’s market capitalization to nearly $ 350 million, a 30-month high. Its shares rose as much as 66% in premarket trading on Wednesday.
President Trump described the deal as “one of the most important deals in the history of the American pharmaceutical industries” at a press conference on Tuesday.
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The US International Development Finance Corporation will lend the cash to Kodak under the Defense Production Act, which requires companies to accept and prioritize government contracts for national security and other reasons.
Kodak plans to use the loan to launch a division of Kodak Pharmaceuticals. The unit will manufacture essential drug components that are in “chronic national shortage” as defined by the Food and Drug Administration.
Pharmaceutical ingredients could represent between 30% and 40% of Kodak’s business, CEO Jim Continenza told the Wall Street Journal.
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Kodak dominated the photographic film market and had a market capitalization of nearly $ 30 billion in 1997.
However, it filed for bankruptcy in 2012 after the digital camera made many of its products obsolete, although it invented the digital camera, according to the New York Times.
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