Eastman Kodak 04.30 NYSE: KODK, a harassed film company that was forced to go bankrupt when digital cameras took over the world, found a whole new deal. Shares rose sharply today on reports that, under the Defense Manufacturing Act, it had received a state loan of $ 765 million to help the company begin manufacturing generic drugs.
It’s a surprising turnaround for what was primarily a photo-based business. The agreement is a game to improve America’s ability to rely on domestic pharmaceuticals in the midst of a coronavirus pandemic. Kodak facilities in Rochester and St. Paul, Minnesota, are the focal points of a new pharmaceutical business that will be called Kodak Pharmaceutical. Kodak said it would focus on producing essential ingredients that, according to the Food and Drug Administration, have identified national deficiencies.
Some analysts question this move and ask why the agreement would not be granted to a company that is already involved in the pharmaceutical industry. President Trump may have had preferences for a manufacturer outside the current drug regime. Political tensions have risen this week as pharmaceutical managers and analysts respond to Trump’s recent executive orders to reduce drug prices.
Whatever the reason, Kodak is a fascinating opportunity for a fresh start, and investors have been bullish on it. So far this week, stocks are around 1,150%. The company went bankrupt in 2013 and has struggled to grow over the last five years. Moving to a field such as selling drugs could be a good starting point for pioneering photography.