Eastman Kodak (NYSE: KODK), the embattled film company that was forced into bankruptcy when digital cameras took over the world, has found a whole new business. The action was triggered today by news that it was awarded a $ 765 million government loan under the Defense Production Act to help the company start producing generic drug ingredients.
It’s a surprising twist to what was primarily a photography-based business. The agreement is a game to improve the ability of the United States to depend on domestic production of pharmaceuticals amid the coronavirus pandemic. Kodak’s Rochester and St. Paul, Minnesota facilities are the focal points of the new pharmaceutical side of the business to be called Kodak Pharmaceutical. Kodak said it will focus on making essential ingredients that the Food and Drug Administration has identified as a national shortage.
Image Source: Getty Images
Some analysts question the measure, wondering why the deal would not have been given to a company that is already involved in the pharmaceutical industry. President Trump may have had a preference for a producer outside of the current drug regime. Political tensions have risen this week as pharmaceutical executives and analysts react to Trump’s recent executive orders aimed at lowering drug prices.
Whatever the reasoning, Kodak has a fascinating opportunity to start again, and investors have reacted with optimism. So far this week, the stock has risen about 1,150%. The company emerged from bankruptcy in 2013 and has struggled to grow in the past five years. Moving to a field like drug sales could provide a good avenue for the photography pioneer.
