An agreement between the U.S. government and Kodak to develop generic medicine ingredients appears to be in place, after the U.S. International Development Finance Corporation tweeted that “recent allegations of traffic are causing serious concern.”
“We will not proceed unless these allegations are cleared,” the agency tweeted, without indicating what the allegations were.
Kodak said Friday that it was conducting an internal review of the company’s recent activity in connection with a $ 765 million loan it would receive under the Defense Production Act to produce pharmaceuticals. The company’s share price went up in the days before the deal was announced, CBS News reported, leading sen. Elizabeth Warren (D-MA) to call the Securities and Exchange Commission to investigate whether there were any instances of insider trading.
On July 28, we signed a Letter of Interest with Eastman Kodak. Recent allegations of crime raise serious concerns. We will not proceed unless these allegations have been removed.
– DFCgov (@DFCgov) August 7, 2020
Kodak, best known for its camera and film equipment, said it was planning to create a new business arm called Kodak Pharmaceuticals to make ingredients that “have disappeared in chronic national shortages.” Kodak CEO Jim Continenza told The Wall Street Journal that he expected pharmaceuticals to become 30 to 40 percent of the company’s business. The company’s plans included production of ingredients for drugs such as hydroxychloroquine, according to The Wall Street Journal. President Trump has identified hydroxychloroquine as a possible treatment for COVID-19, despite evidence that the anti-malarial agent has been ineffective against the virus.
Rep. Maxine Waters (D-CA), chairwoman of the House Financial Services Committee and other Democrats, sent a letter Aug. 4 to DFC chief Adam Boehler asking why the agency supported a loan for Kodak, “an organization that on the brink of failure in 2012 and had failed in its previous step into pharmaceutical manufacturing, in its efforts to develop the capacity to produce up to 25 per cent of domestic pharmaceutical components. “The commission asks all communication about the loan to view.
A Kodak spokesman declined to comment Saturday.
