Kodak shares rocket on Trump backing for new venture
Wednesday, July 29, 2020
Kodak is moving into pharmaceutical manufacturing with hundreds of millions of dollars of US government backing, causing its share price to rocket.
Yesterday (28 July), on the direction of President Donald Trump, the US International Development Finance Corporation signed a letter of intent to lend Kodak $765m (£590m).
Kodak is to revamp existing facilities in Rochester and St Paul for the new Kodak Pharmaceuticals operation, which will make ingredients for generic pharmaceuticals, prioritising components “that are most critical to the American people and US national security”. Some ingredients have been identified as essential “but have lapsed into chronic national shortage”.
Kodak’s share price spiked in after-market trading following the announcement, rising from $7.94 to $13.32 – the 52-week high is $11.80.
Kodak used to have a Health Imaging division but sold it in 2007. This is the group’s first pharma foray.
In May, President Trump signed an order aimed at re-shoring the production of strategic resources and the strengthening of domestic supply chains in response to Covid-19.
Kodak executive chairman Jim Continenza said the $1.2bn-turnover group was proud to be part of the country’s move to strengthen self-sufficiency in key areas.
“By leveraging our vast infrastructure, deep expertise in chemicals manufacturing, and heritage of innovation and quality, Kodak will play a critical role in the return of a reliable American pharmaceutical supply chain,” he said.
Kodak also reaffirmed its continuing commitment to the printing industry.
A spokesperson commented: “We remain 100% committed to print and will continue to invest in ground-breaking innovations, especially in digital print. Print will be an important revenue source as the new pharmaceutical business gets up to speed.”
The White House tweeted that President Trump was taking “bold action to ensure that Americans are no longer reliant on foreign countries for critical, affordable, generic medications”.
Separately, at the beginning of the week President Trump also announced that the US government has awarded a $265m contract to Fujifilm to expand coronavirus vaccine manufacturing capacity at an existing plant in Texas.
Fujifilm already has a large healthcare business and is currently involved with clinical trials of one of its drugs, Avigan, as a potential treatment for Covid-19.
The Texas site will support ‘Operation Warp Speed’, which is the Trump administration’s effort to ramp up the development, manufacturing and distribution of vaccines and treatments to combat the coronavirus.