Kodak Shares Explode as Company Moves to Pharmaceutical Ingredients

Once an iconic camera company, shares of Kodak were tripling this week as Wall Street leaned that the Trump administration gave the company a $765 million loan to launch a business making pharmaceutical ingredients.

Eastman Kodak Co. shares blew up more than 200% on Tuesday after the news was announced by the Trump administration. It then exploded again on Wednesday by over 500% intraday Shares hit as low as $1.55 on March 23 of this year.

Kodak CEO Jim Continenza has said in a Yahoo Finance interview, “We really didn’t make cameras, we made film. We’ve always been a chemical and chemistry (company).”

According to the Trump administration, the Kodak deal is the first of its kind and uses powers afforded by the Defense Production Act. The loan from the government has a three-year timeline, and is a step towards increased output.

“Never again do we want to rely on shipments from China or elsewhere in order to get lifesaving medical supplies,” New York Gov. Andrew Cuomo said in a statement.

“We are not against the global supply chain,” Continenza said. “What we are for is making sure and ensuring America has all the drug they need, especially critical drugs, to sustain life in America.”

Continenza said that Kodak’s robust manufacturing infrastructure reduces the startup time. And since the contract is for Kodak to take on 25% of the U.S. needs for APIs, it will require an upgrade in the process with more reliance on technology.

“We’re going to move from batch manufacturing to continuous manufacturing, to keep that cost down,” Continenza said.

“We find it puzzling why generic pharmaceutical companies who have the capabilities and know-how for this have not yet been awarded such contracts,” said SVB Leerink’s Ami Fadia this week.

“Bringing pharma manufacturing back to the U.S. is no easy feat and (we) continue to believe that leading generic manufacturers will eventually be part of the solution.”

Disclaimer: We have no position in Eastman Kodak Company (NYSE: KODK) and have not been compensated
for this article.