The legendary pioneer photography company Kodak in Rochester is developing a fresh new role in another industry. The company is tapping into the $4.2 trillion global wellness industry to produce pharmaceutical ingredients. However, there are developments that could delay the company’s future plans to reinvent itself. Here’s more on how Kodak is making international waves once again.
Kodak’s New Pharmaceutical Focus
Kodak has recently launched a new division of its Rochester company called Kodak Pharmaceuticals. The division is receiving a $765 million government loan to produce approximately 25% of the active ingredients in U.S. generic medications. The company will join the manufacturers who contribute $2.17 trillion to the U.S. economy to reduce reliance on foreign production of drug and self-care products. The company’s move has been backed by President Trump to create more ways for critical pharmaceutical supplies to be produced in the U.S. rather than in other nations.
The company plans for pharmaceuticals to make up 30% to 40% of its business. Part of the plans includes producing ingredients for hydroxychloroquine, which has been touted as a potential treatment for the COVID-19 virus. The project is expected to create over 300 jobs in the Rochester community. According to the U.S. International Development Finance Corporation, Americans consume 40% of the world’s ingredients in the production of generic medications. However, only 10% of these components are currently manufactured in the United States.
The Rochester company has been looking at ways to reinvent themselves since filing in 2012 for bankruptcy. Before that, Kodak was famous for making film photography accessible for all. However, it failed to capitalize on its invention and is looking at this new venture to be the heart of who they are. The company will be able to work with modern labs that are able to screen ingredients to 0.1% and lower. If the venture is successful, it could lead to many breakthroughs that could revolutionize modern medicine. Kodak claims it has the experience to be successful in this industry because film chemicals are similar to the key starting materials used in the creation of pharmaceutical drugs.
A Snapshot of Kodak’s Photographic History
Kodak’s story begins in 1880 when founder George Eastman innovated a novel formula for the creation of dry plates. The Rochester company started as the Eastman Dry Plate Company and then operated under several names before settling on Eastman Kodak Company. The term Kodak came to the founder out of thin air, based on his affinity for the letter k as an incisive and strong letter. In 1888, the first Kodak camera was released. In 1988, the Rochester company made its first steps in the pharmaceutical industry after purchasing Sterling Drug Inc. in order to diversify its portfolio.
The Sterling assets were sold off in 1994 to return the Rochester company’s focus back to photography and imaging. The company stopped selling traditional film cameras in 2004 and filed in 2012 for Chapter 11 bankruptcy. Kodak inked a deal in 2014 to make film for the motion picture industry, which had some success. In 2018 the Rochester company launched a plan for photo-centric cryptocurrency, but nothing came of it. In July 2020, the company was awarded a government loan to become a producer for the pharmaceutical industry.
Kodak has achieved many historic accomplishments throughout its legendary history. The company was behind the 1966 first-ever photo of Earth taken from space and John Glenn’s 1962 orbit of the planet. The Rochester company’s patented imaging technology led to the invention of the modern x-ray. Kodak film even captured the first x-ray image of the hand of the wife of Wilhelm Roentgen, an esteemed German physicist and mechanical engineer.
Negative Exposure Development Concerns
The lucrative deal that Kodak has with the government may be creating some regulatory headaches for the Rochester company. When Kodak released the news of its deal, company stock soared incredibly fast. Shares raised from $2 to $60 before the company’s debt was converted into stock as part of the intricate deal is made. The debt conversion resulted in an issuance of 30 million additional shares. This undercuts the value of the already outstanding stock.
This development has led to a potential investigation into a rallying and trading frenzy. However, the Security Exchange Commission has declined to comment on the matter and the Rochester company hasn’t admitted to being contacted by the organization. Concerns have been raised that company board members allegedly bought stock while the deal was under negotiation with the government. After news of this innovative deal was released to the public, Kodak disclosed in regulatory findings that stock options were issued to company executives and Kodak CEO James Continenza before stock share prices soared.
Kodak stated that there was a reason the stock option grants were approved and issued to shareholders. It was to preserve the value Kodak CEO Continenza had already earned prior to the dilution triggered by the old debt conversion. The Rochester company stated it’s appointing a special committee of independent directors. They will conduct an internal review of the company’s agreement process with the federal partnership to produce pharmaceutical products. They also stated they would fully cooperate with any inquires into the events surrounding this financial deal. Kodak will also have to deal with environmental restrictions and high labor costs involved in U.S. drug manufacturing.
The new venture of the Rochester company will be an interesting venture to watch over the coming months. It appears that the winter of their financial hardships is over and they are springing forward with renewed hope. Similar to the CDC recommendation for removing old bandages and checking for infections in wounds every 24 hours, Kodak is ripping off its old wounds. If they can clear the infections that have plagued them for years, they may be able to create numerous developments in modern medicine to benefit society. The bigger picture for this storied Rochester company is still processing yet in the darkroom and the results will soon come to light in regards to their pharmaceutical future.
This entry was posted on Wednesday, August 12th, 2020 at 11:46 am and is filed under Rochester News. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.