The former film giant cross-border pharmaceutical industry

On Tuesday, US Eastern Time, Kodak announced that it had received a US$765 million loan from the US International Development Finance Corporation under the US federal government to officially enter the pharmaceutical industry.

It is reported that this is the first such loan issued by DFC on behalf of the US government under the National Defense Production Act. Kodak will use the funds to produce some generic active pharmaceutical ingredients (Active Pharmaceutical Ingredients).

Soon after the US stock market opened on Wednesday, Kodak's stock price soared, triggering 20 circuit breakers during the session, closing at $33.32, an increase of 318.14%. The market commented, "If you bought $100,000 of Kodak stocks in the past hour, your stocks are now worth $3.3 million. Unbelievable."

The National Defense Production Act originated during World War II and authorized the President of the United States to control domestic industries to assist military operations in a number of war power bills. For example, Ford Motors once produced nearly 300,000 tanks, including tanks, for the country. Cars used in wartime. When the Korean War broke out in 1950, then President Truman believed that the President should have greater long-term power to mobilize domestic industrial production capacity for national defense and security, which prompted Congress to pass the National Defense Production Act. The scope of application of the "National Defense Production Act" is national defense security, emergency preparedness and other items.

On March 18, Trump signed an executive order based on the National Defense Production Act of 1950, instructing the Ministry of Health to use the power of the Act to obtain and allocate "health and medical resources, including personal protective equipment, needed to combat the spread of the new crown virus." And ventilator".

Can Kodak make medicine?

In fact, this is not the first time Kodak has entered the pharmaceutical industry.

As early as 1988, Kodak established the Eastman Pharmaceutical Business Unit to make health care products, and purchased the pharmaceutical company Sterling for US$5.1 billion. But the outcome was not ideal. Just 6 years later, Kodak sold this part of the business at a discounted price, bringing the acquisition to a disastrous end.

Kodak's other medical-related business is medical imaging, but it was also split and sold in 2007 due to consecutive losses.

Although Kodak has been in the medical and pharmaceutical industry in history, it may still be possible for Kodak to take over the production of raw materials for medicines due to the many chemical agents involved in imaging and printing technology.

In the view of Kodak CEO Jim Continenza, Kodak's more than 100 years of accumulation and infrastructure in the field of chemistry and advanced materials have given the company the ability to get up and running quickly.

Moreover, what Kodak will do this time is not drug research and development, but the basic raw materials needed to produce generic drugs. Compared with Kodak's previous attempt to develop new drugs, the difficulty of generic drugs is already several levels lower, and the production of raw materials is relatively easier.

According to Jim Continenza's plan, the production of raw materials will eventually account for 30% to 40% of Kodak's business, ensuring 25% of the supply of raw materials required for non-biological and non-antibacterial generic drugs in the United States.

In addition, Fuji's development in the medical field proves the possibility of Kodak's transformation into pharmaceuticals.

Since 1986, Fuji has successively acquired several medical diagnostic imaging companies and biomedical companies. Among them, Diosynth Biotechnologies, a pharmaceutical company acquired by Fuji in 2013, is supporting the production of a new crown vaccine, which is a member of the US government's vaccine research and development program. Fuji's fiscal year 2019 financial report shows that from April 1, 2019 to March 31, 2020, the company's annual revenue in the healthcare and high-performance materials business was US$9.396 billion, accounting for 44.2% of total revenue.

It is worth noting that outside of production, Kodak will face many challenges. For example, the positive period of certain drugs brought about by the epidemic may not last long, and it will take time for the FDA to approve new API suppliers. Whether it is easy to find buyers at that time will directly determine the fate of Kodak Pharmaceuticals. After the epidemic, whether Kodak can cope with price wars from overseas suppliers is still unknown.