Kodak lands $765M federal loan to develop prescription drug ingredients, aims to add 300 jobs in Rochester

Business

Officials say "This is going to be one of the greatest second acts in American industrial history."

ROCHESTER, N.Y. (WROC) — A big development for a former film powerhouse in Rochester.

Eastman Kodak Company officials, along with Washington D.C. leaders, announced an agreement for a $765 million federal loan to support the launch of Kodak Pharmaceuticals — a new arm of the company that poses to transform the business into an industry leader in prescription drug manufacturing.

“This is going to be one of the greatest second acts in American industrial history,” said Dr. Peter Navarro, Assistant to the President and Director of the Office of Trade and Manufacturing Policy at the White House.

This project is the first use of new authority delegated by President Donald Trump’s recent executive order that enabled the United States International Development Finance Corporation (DFC) and the United States Department of Defense (DOD) to collaborate on domestic response efforts to COVID-19 under the Defense Production Act.

“Today, we are bringing together the significant resources and expertise of the private sector and U.S. Government,” said DFC CEO Adam Boehler. “We are pleased to support Kodak in this bold new venture. Our collaboration with this iconic American company will promote health and safety at home and around the world.”

Officials say this move will add 360 direct jobs for the company, plus an additional 1,200 indirectly, including some 300 here in Rochester where the company was founded by George Eastman in the late 1880s.

“Kodak is proud to be a part of strengthening America’s self-sufficiency in producing the key pharmaceutical ingredients we need to keep our citizens safe,” said Kodak Executive Chairman Jim Continenza. “By leveraging our vast infrastructure, deep expertise in chemicals manufacturing, and heritage of innovation and quality, Kodak will play a critical role in the return of a reliable American pharmaceutical supply chain.”

MORE | Adam Interviews Kodak CEO Jim Continenza

According to officials, Kodak will produce ingredients for generic drugs, including the antimalarial drug hydroxychloroquine. Under the agreement, the loan must be repaid over 25 years.

“If we have learned anything from the global pandemic, it is that Americans are dangerously dependent on foreign supply chains for their essential medicines,” Navarro said. “This DFC-Kodak partnership is a big win for the use of President Trump’s DPA powers, a big win for New York, and a huge step forward towards American pharmaceutical independence.”

Kodak’s stock price spiked in pre-market hours and the rise continued into trading hours Tuesday as news of the loan agreement broke.

“This is about assuring our supply chains now and in the future,” said Rear Admiral John Polowczyk, White House Supply Chain Task Force Lead. “Kodak is stepping up to help onshore pharmaceutical production and this DPA action will allow the modernized Strategic National Stockpile to have domestic resiliency. Once Kodak ramps up we will have the ability to tap into that capacity for domestic use.”

Officials say Kodak Pharmaceuticals will produce pharmaceutical components that have been identified as essential, but have lapsed into chronic national shortage, as defined by the Food and Drug Administration (FDA). Although Americans consume approximately 40% of the world’s supply of bulk components used to produce generic pharmaceutics, only 10% of these materials are manufactured in the United States, according to the DFC.

Full Press conference:

Statement from Rep. Joe Morelle:

“Rochestarians have long harnessed their entrepreneurial fortitude to create some of our society’s most ingenuitive inventions. That’s why the name Kodak has been synonymous with Rochester for over a century, and why we’ve been given this opportunity to step upboth for our community and for our nation.

“It’s not one without risks, but when people are struggling to afford everyday necessities, the ability to produce ingredients for prescription drugs here at home will provide better access to affordable drugs for millions of Americans. The implications of this are huge‪everyday American families should not have to empty their bank account for medicine they need to survive. It is my hope that Kodak can start paving the way to making this a reality for all.

“The knowledge, the skilled workforce, and the potential Kodak has to contribute to our society at this time wouldn’t be possible without the significant investment we’ve made in them throughout the years. In my time in state and federal government, Kodak has always contributed to Rochester’s rich history, and today, I see the opportunity for another exciting chapter to begin to unfold.”

Statement from Greater Rochester Chamber of Commerce President and CEO Bob Duffy:

“Greater Rochester Chamber of Commerce is pleased to see a historic local company tapped for a federal manufacturing initiative that will help combat COVID-19, as well as bring 300 jobs to our region. Eastman Kodak Company has long been an important part of the Rochester/Finger Lakes economy, with unique capabilities and intellectual capital that will be put to critical use during this challenging time. I am a lifelong supporter of Kodak and deeply appreciate their incredible impact on Rochester. Today’s announcement reinforces that Kodak continues to add to our economic vitality. We are grateful for the continued leadership of Governor Cuomo, which has allowed New York State to turn the tide against this virus. Greater Rochester Chamber stands ready to assist Eastman Kodak Company and all local organizations as we work together to safely reopen and rebuild.”

Statement from Monroe County Executive Adam Bello:

“Today marks a new chapter for Eastman Kodak, which has been a world leader in innovation for over 130 years and has always called Rochester ‘home’. In this time of unprecedented challenge, this opportunity will showcase the best of Monroe County and our ability to quickly adapt to the needs of our new economy, even while responding to the COVID-19 crisis. I am excited to see Kodak leading this forward thinking initiative and am confident that our skilled workforce will make it a success.”

Statement from Rochester Mayor Lovely Warren:

“Our residents created a legacy working at Kodak to provide world-class products and countless memories for people throughout our nation and our world,” said Mayor Warren. “Now, we will get another opportunity to show the world our ingenuity and quality again through Kodak Pharmaceuticals. I look forward to more Rochesterians going to work and building a new chapter in our shared history.”

Check back with News 8 WROC as we will continue to update this developing story.

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