US IDFC To Give $765 Mln Loan To Kodak To Produce Pharma Ingredients
U.S. International Development Finance Corp. or DFC is awarding a $765-million loan to Eastman Kodak Co. for manufacturing critical pharmaceutical components for generic drugs production.
Following the news, the company that makes print and advanced materials and chemicals is gaining around 118 percent in pre-market activity on the NYSE, after closing Tuesday’s trading up 203 percent.
The new loan facility will give a fillip to Kodak, which reported wider loss in its first quarter hurt by charges and weak revenues. Amid the coronavirus outbreak, Kodak, which was founded in 1888 for camera-related products, has already been redirecting resources to produce isopropyl alcohol for hand sanitizer and manufacture face masks using ESTAR film base.
The agency’s Chief Executive Officer Adam Boehler has signed a letter of interest or LOI for the loan, which would support the launch of Kodak’s new unit Kodak Pharmaceuticals.
The project comes under President Donald Trump’s executive order signed in May that enables DFC and the U.S. Department of Defense or DOD to collaborate in support of the domestic response to COVID-19 under the Defense Production Act.
With the new pharma unit, New York-based company plans to expand its traditional product line to support the national response to COVID-19.
Kodak Pharma will produce critical pharmaceutical components that have been identified as essential but have lapsed into chronic national shortage, as defined by the Food and Drug Administration.
DFC’s loan would support Kodak’s startup costs needed to repurpose and expand the company’s existing facilities in Rochester, New York and St. Paul, Minnesota, and thus accelerate its time to market.
Kodak Pharma, when fully operational, will have the capacity to produce up to 25 percent of active pharmaceutical ingredients used in non-biologic, non-antibacterial, generic pharmaceuticals. The unit will support 360 direct jobs and an additional 1,200 indirectly.
According to Peter Navarro, Assistant to the President and Director of the Office of Trade and Manufacturing Policy at the White House, Americans are dangerously dependent on foreign supply chains for their essential medicines. The people in the United States consume around 40 percent of the world’s supply of bulk components used to produce generic pharmaceutics, but only 10 percent of these materials are manufactured in the country.
DFC recently has launched a request for proposals from private sector entities seeking DFC financing for projects to support Covid-19 requirements. These included domestic production or distribution of pharmaceuticals, personal protective equipment, medical testing supplies, vaccines, ventilation equipment, or relevant ancillary materials and technologies.
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