Kodak Stock increases by another 60% after Trump announces a contract to manufacture generic ingredients.
Eastman Kodak skyrocketed on Tuesday after President Donald Trump announced an agreement to work with the photo pioneer to produce ingredients for generic drugs in response to the coronavirus pandemic.
Kodak shares rose more than 60% in extended trading. The stock more than tripled during regular trading on Tuesday for the best day ever after the U.S. government granted the company a loan of $765 million for the production of drugs under the Defence Production Act, the first of its kind.
“Our 33rd application of the Defence Production Act will mobilize Kodak to produce generic, active pharmaceutical ingredients,” Trump said at a press conference on Tuesday evening. “We’re going to bring back our jobs and make America the world’s leading medical manufacturer and supplier.”
Kodak said on Tuesday it would produce pharmaceutical components that were identified as essential, but are in chronic national shortage, as defined by the Food and Drug Administration.
The rise in the share price pushed Kodak’s market value to $347 million at the close of trading on Tuesday. Before Tuesday’s trading, it had a market value of about $115 million.
The company said it will expand existing facilities in Rochester, New York, and St. Paul, Minnesota, under a new branch of Kodak Pharmaceuticals.
The President announces an agreement with Kodak and says he’s invoking defense production act to provide Kodak with a loan of $765 million to launch Kodak Pharmaceuticals pic.twitter.com/LkOOiSi1HG
— Acyn Torabi (@Acyn) July 28, 2020
“Kodak is proud to play a part in helping to strengthen America’s self-sufficiency in the production of the key pharmaceutical ingredients we need to keep our citizens safe,” said Kodak Executive Chairman Jim Continenza in a statement. “By leveraging our vast infrastructure, extensive chemical manufacturing expertise and heritage of innovation and quality, Kodak will play a critical role in the return to a reliable U.S. pharmaceutical supply chain.”
Kodak filed for bankruptcy in 2012 when the switch to digital cameras devastated the business. The transition to pharmaceutical production is an opportunity for the former leader in film and photography.
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Reference : CNN