Kodak Moves into Pharmaceuticals with $765-M Federal LoanBy
The US government, through the US International Development Finance Corporation (DFC), has signed a letter of interest to provide a $765-million loan to Eastman Kodak Company to support the launch of Kodak Pharmaceuticals, a new arm of the company that will produce generic active pharmaceutical ingredients (APIs) as part of the US government’s COVID-19 response.
Kodak Pharmaceuticals will produce pharmaceutical components that have been identified as essential but have lapsed into chronic national shortage as defined by the US Food and Drug Administration (FDA). The project marks the first use of new authority under a recent executive order signed in May (May 2020) by President Donald Trump that enables the DFC and the US Department of Defense (DoD) to collaborate in support of the domestic response to COVID-19 under the Defense Production Act (DPA).
DFC’s loan will be used to support start-up costs needed to repurpose and expand the company’s existing facilities in Rochester, New York and St. Paul, Minnesota, including by incorporating continuous manufacturing and advanced technology capabilities. Once operational, Kodak Pharmaceuticals will have the capacity to produce APIs used in non-biologic, non-antibacterial, generic pharmaceuticals. Over $430 million in capital funds will be used to build new and modernize current facilities at Eastman Business Park in Rochester, New York.
The letter of interest signed by the DFC indicates Kodak’s successful completion of DFC’s initial screening and will be followed by standard due diligence conducted by the agency before financing is formally committed.
The executive order authorizes, under the DPA, the DFC CEO to apply financial tools to re-shore production of strategic resources and strengthen related domestic supply chains in response to COVID-19. This authority is carried out in partnership and coordination with the DoD, which bears all costs of DFC’s DPA program. DFC recently launched a request for proposals from private-sector entities seeking DFC financing under the DPA for projects that support the domestic production or distribution of pharmaceuticals, personal protective equipment, medical testing supplies, vaccines, ventilation equipment, or relevant ancillary materials and technologies.
These efforts complement DFC’s global response to both the health-related and economic impacts of COVID-19. The agency, recently announced a call for proposals under its new Health and Prosperity Initiative, which involves $5 billion of investment in projects that help developing countries respond to COVID-19 and build greater health resilience. Under the initiative, the DFC is particularly focused on investments in health system capacity, including supply chains that expand the distribution of diagnostics, therapeutics, vaccines, and other medical supplies, products, and equipment.
Source: US International Development Finance Corporation, Kodak, the Office of the Governor of New York, and the White House