Kodak Soars By 400% After Trump Bump

Kodak lands loan to bolster facility in Minnesota and promote US-produced drug supply

Kodak lands loan to bolster facility in Minnesota and promote US-produced drug supply

The vast majority of hospitals in the U.S. are reportingshortages in drug treatments for Covid-19 patients as the supply chain from China was disrupted due to factory shut-downs amid the pandemic.

Photography pioneer Eastman Kodak will receive a $765 million loan from the US government to manufacture basic ingredients used in pharmaceuticals.

The goal is to ramp up production of pharmaceuticals in the U.S.to a point where the country is able to produce 25% of the active ingredeients necessary to make its own medicines.

Kodak will be adding 300 jobs in Rochester, and another 1,200 indirect support jobs to come along with it. Jim Continenza, the Executive Chairman at Kodak, detailed on the latest move, "Kodak is proud to be a part of strengthening America's self-sufficiency in producing the key pharmaceutical ingredients we need to keep our citizens safe".

Kodak will produce pharmaceutical components that have been identified as essential but have since lapsed into chronic national shortage, as defined by the U.S. Food and Drug Administration.

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The Wall Street Journal reports that Kodak received the first loan of its kind under the Defense Production Act, which is part of a U.S. effort to reduce its dependence on foreign countries by bringing production of certain things back onto American soil. The recent 1,300% increase in the stock price has recently enabled it to record a market capitalization of over $1.5 billion. "But in an executive order signed in May, President Trump gave DFC new powers under the Defense Production Act to finance domestic health-care manufacturing needed to respond to the coronavirus crisis", Jeanne Whalen writes for The Washington Post.

Shares of Kodak last traded up about 410% to about $40 a share after surging as much as 570%, resulting in over 10 trading halts on Wednesday due to explosive volatility.

"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.

To ensure rapid production, Kodak will expand its existing facilities in St. Paul, Minnesota, New York, and Rochester, under a new arm of Kodak Pharmaceuticals. The company plans to coordinate closely with the Administration and pharmaceutical manufacturers to identify and prioritize components that are most critical to the American people and US national security.

Of course, this is also a strategic investment in the midst of the COVID-19 virus pandemic.

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