Recently Kodak made a big splash by announcing they want to produce generic-drug ingredients in response to the corona virus pandemic. President Trump also supported the deal and Kodak secured a $765 million loan to implement the project. Meanwhile shares of Kodak stock skyrocketed from a little over $2 apiece to $60 apiece before settling back down.
What most people might not know or remember is that this is not the first time Kodak ventures into pharmaceutics business. In 1988, Kodak bought Sterling Drug for $5.1B, deciding that it was really a chemical business, with a part of that business being a photography company. However, Kodak soon learned the hard lesson that photography has nothing to do with pharmaceutics, although both involve chemical reactions. Ultimately Kodak sold Sterling in pieces, for about half of the original purchase price, a move that they might regret now.
In order to find out more about Kodak’s recent announcement and its plan for future, ME Printer talked to Kurt Jaeckel, Eastman Kodak’s Worldwide Director of Communications. Here are the excerpts:
During most of 20th century Kodak was a household name in photography and film, then the company become a dominating force in printing now the company has decided to become major drug components manufacturer, so what type of a company is Kodak?
Kodak is a technology company, with well over 100 years of experience in chemicals and advanced materials. Film is processed with chemicals. Inks are made with chemicals. For the last several years, Kodak has been manufacturing pharma materials in the unregulated space. Kodak Pharmaceuticals would produce critical pharmaceutical components that have been identified as essential but have lapsed into chronic national shortage. Our chemical manufacturing operation is located at Eastman Business Park, a 1200-acre “city within a city” in Rochester, NY which is uniquely suited for chemical development and production. Our existing bio manufacturing and chemical processing facilities and best-in-class R&D could be operationalized to begin supporting the development of generic pharmaceutical components – creating jobs, supporting local economies and helping secure the US pharma supply chain.
Kodak invested heavily in graphic arts industry and launched a series of innovative products, now that Kodak’s focus has shifted to a completely different industry some might speculate that printing is not important for Kodak anymore, is this a fair assessment?
We are still 100% committed to print and will continue to invest in ground-breaking innovations, especially in digital print. Print will be important as a revenue source as the proposed new pharmaceutical business gets up to speed.
This isn’t the first time that Kodak has radically changed course in order to capitalize on the latest craze. In 2018 Kodak launched KodakCoin, a cryptocurrency designed for photographers, which later it abandoned. However, In the days after the company’s announcement, its stock rose by up to 245 percent. What do you have to say to sceptics who say its déjà vu all over again this time around?
KodakCoin was a brand license arrangement with Wenn Digital. With the proposed new pharmaceuticals business, we are returning to our DNA. We’ve always had strength in advanced materials and chemicals, and currently manufacture pharmaceutical components in the unregulated space.
In an interview with Wall street Journal Kodak’s CEO Jim Continenza said 30% to 40% of Kodak’s business will eventually be dedicated to manufacturing pharmaceutical ingredients, that is a huge part of the company’s activities, which involves restructuring and bringing in new skills and knowledge as well as perhaps acquisitions, what will happen to the current workforce of Kodak?
Kodak Pharmaceuticals would operate as a separate business unit.
Will there be any change in Kodak’s network around the world, especially in the Middle East, will we see realignment, restructuring?
We have not yet finalized the agreement, so discussing any specific terms would be premature.