The fallen photographic giant will manufacture ingredients for generic drugs to help fight the coronavirus.
When the US government announced the loan, it said it hoped to reduce its dependence on foreign medical supplies.
After the announcement, Kodak’s stock price soared by more than 60% on Tuesday.
Drastic change from images to medicine
The company announced on Tuesday that the U.S. government has loaned $765 million to the legendary camera manufacturer Eastman Kodak Co. The company wants to begin production of medicines to increase America’s self-sufficiency in response to the coronavirus pandemic.
Kodak CEO Jim Continenza told The Wall Street Journal that the production of pharmaceutical raw materials. They would eventually account for 30-40% of Kodak’s business.
After the government announced the loan, Kodak’s stock price more than tripled. As of Tuesday’s close, the company’s market value had increased from $115 million to $347 million, which was the stock’s best day ever.
In the leap from film and imaging to pharmaceuticals, Kodak has followed its previous competitor, Fujifilm Holdings of Japan. These two companies have almost monopolized a win-win situation in the field of film photography for most of the 20th century, but so far. Fujifilm has proven to be better at reinventing itself than its American counterparts.
History of this digital world
Kodak engineers originated the first digital camera in 1975, but the company didn’t realize the perspective of the technology. Fujifilm shifted to digitization more quickly, and launched the world’s first digital portable camera in 1988. While Japanese companies achieved diversified development from photographic film faster.
The company is known for its “Kodak Moment” slogan.
But in the late 1990s, as consumers switched from photographic film to digital photography, the company began to struggle financially.
Fujifilm is also a few steps ahead of Kodak in the pharmaceutical field. Healthcare and material solutions accounted for 43% of Fujifilm’s total revenue in 2019. And the company aims to double its healthcare industry sales in the next few years.
The company gets hold of a medical analytical imaging company as early as 1986. Since then, Fujifilm has acquired several pharmaceutical and biotechnology companies and made them a major manufacturer of medical equipment and drugs.
In 2006, it acquired the company and the company became the pharmaceutical manufacturer Fujifilm Toyama Chemical. The company developed the antiviral drug Avigan, which was an earlier competitor in the competition to develop COVID-19 treatments. (However, the inconclusive clinical research earlier this month weakened the enthusiasm for Avigan.)
Had to face the bankruptcy
In 2012, Kodak filed for Chapter 11 bankruptcy protection in the United States and shifted its focus to providing printing and professional services to the company. However, it still produces digital cameras and instant cameras for consumers.
The pharmaceutical company Fujifilm Diosynth Biotechnology, which acquired by Fujifilm in 2013, announced on Monday. That its Texas plant would support the production of coronavirus vaccines as part of the US government’s COVID-19 vaccine development program Operation Warp Speed.
Kodak, which has dominated American cameras and film for decades. Filed for bankruptcy protection in 2012 after years of hard work to adapt to industry changes. Since its bankruptcy in 2013, it has changed its name to a technology company focused on corporate printing and imaging.
Coincidence or something else
It is no coincidence that both companies have switched from the film industry to the pharmaceutical industry. Each company says that its experience in the production of film and other photographic products helps pharmaceutical manufacturing.
Continenza told the Wall Street Journal that Kodak has a long history in the fields of chemistry and advanced materials. He also said that Kodak’s existing infrastructure would enable Kodak Pharmaceuticals to “get up and running quickly.”
A few years before Kodak entered the space field; Fujifilm initiated a movement to become a “total healthcare company”. and linked Foxconn’s photography history with the success of the pharmaceutical industry. Fujifilm’s drug development work has adopted “proprietary technology utilized through Fujifilm’s long-term operation of film.”
Better for United States
White House adviser Peter Navarro said that the pandemic has shown that the United States is “dangerously dependent on a foreign supply chain of essential medicines” and called the Kodak agreement “a big step towards American pharmaceutical independence.”
In recent years, China is the world’s largest pharmaceutical ingredient and a supplier of active compounds used in the manufacture of drugs, and the United States’ imports from China has increased.
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