Eastman Kodak is getting another shot at redemption.
The 131-year-old company that once dominated the market for photographic film and made an ill-fated foray into cryptocurrencies is pivoting again. This time, Kodak plans to make ingredients for generic drugs, aided by a $765 million U.S. government loan, the first fruits of a Trump Administration program aimed at bolstering American drug-making capabilities in the age of COVID-19.
News of the arrangement fueled a rally of as much as 2,760% for Kodak stock this week, with legions of day traders snapping up shares through the Robinhood Markets’s trading app. On Thursday, the stock was up 18% to $39.32 in New York.
But some financial analysts and economic development experts greeted the proposal with skepticism. Kodak filed for bankruptcy in 2012 after getting lapped by rivals in digital photography and failing to make good on an earlier multibillion-dollar acquisition of a pharmaceutical company. It also has little to show for the planned introduction of a cryptocurrency two years ago. Why, then, would the government pick Kodak to spearhead efforts to reinvigorate a pharmaceutical production supply chain in the U.S.?
“We are puzzled by the Trump Administration’s decision,” analysts at SVB Leerink wrote in a research note. “In particular, we find it puzzling why generic pharmaceutical companies who have the capabilities and know-how for this have not yet been awarded such contracts.”
Production of active pharmaceutical ingredients for generics is a “Herculean task,” they wrote. Ami Fadia, a senior analyst at SVB Leerink, said Kodak is