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In a deal aimed at reducing U.S. reliance on China, the federal government announced Tuesday that it plans to give Eastman Kodak a $765 million loan to start producing the chemical ingredients needed to make pharmaceuticals.The company plans to establish a new division, Kodak Pharmaceuticals, that will focus on the building blocks used to produce generic drugs, according to a joint statement from Kodak and the lending agency, the U.S. International Development Finance Corporation, or DFC.
While the stock’s reaction to the news is understandable, its 25% gain on Monday ahead of the public announcement has raised some eyebrows on Wall Street. Kodak Chairman Jim Continenza has also taken some head for buying 46,737 shares of Kodak stock on June 23 at an average price of $2.22.Roughly a month later, that $103,575 investment is now worth more than $1.5 million.“We’re here to make continued KSMs and APIs and help fight the pharmaceutical blockage in the U.S. and the lack of supply. So we’re really here for the right reasons, and I don’t speculate on the stock price,” Continenza told Fox Business on Wednesday morning.[...]"[W]hen the pandemic hit -- we -- what can we do? We started making hand sanitizer," Continenza said on Fox Business. "We started making face shields, and then we started doing printed circuit board for ventilators, and that kind of got us within the context of how can we help with this pandemic."And we were working another partner who was working on this with the government and we were just there making them for this particular partner; and that kind of got the introduction. Meanwhile the government was looking at who can make these inside of Dr. Navarro’s group and Kodak was on their list. So the two things kind of met and married."
Eastman Kodak Co. has won a $765 million government loan under the Defense Production Act, the first of its kind. The purpose: to help expedite domestic production of drugs that can treat a variety of medical conditions and loosen the U.S. reliance on foreign sources.
