Eastman Kodak will receive a federal loan of $765 million to help reduce the country's reliance on other countries for ingredients used in generic drugs.
Shares of the one-time photography giant, based in Rochester, New York, more than tripled on the announcement by the U.S. International Development Finance Corp.
Kodak has branched out to offset the large scale loss of its film business. Adam Boehler, who heads the IDF, said he learned that the company was interested in creating a start-up that could supply ingredients for pharmaceuticals.
“If you look at drugs, 90% of the drugs that we take today are generics, and they are almost all made overseas,” Boehler said in an interview on CNBC. “The dominant manufacturer of ingredients for generics is China, and number two is India. And so, we said if we’re going to re-shore and bring things back and we’re going to have safety and security going forward, we need to change that.”
Boehler said the agreement will create 360 jobs in Rochester, and 1,200 jobs in the construction and revamping of facilities in the area.
Kodak Pharmaceuticals will make critical pharmaceutical ingredients that have been identified as essential but have lapsed into chronic national shortage, as defined by the Food and Drug Administration.
The Kodak unit will have the capacity to produce up to 25% of active pharmaceutical ingredients used in non-biologic, non-antibacterial, generic pharmaceuticals.
The government loan will help support startup costs needed to repurpose and expand Kodak's existing facilities in Rochester and St. Paul, Minnesota.
Kodak referred to the prepared U.S. statement on the loan when asked for comment Tuesday.