Eastman Kodak Co., a long-time producer of photography-related products, has won a $765 million loan to manufacture generic drug APIs. Granted under the Defense Production Act, the first-of-its-kind loan is aimed at lowering America’s reliance on API imports from countries such as India and China.
Although Kodak has a long history of manufacturing chemical products such as inks, the loan will allow the company to launch a pharmaceuticals division, which Kodak expects will eventually become 30-40 percent of its business. The loan will have to be repaid within 25 years.
Under the plan, Kodak will manufacture ingredients for a number of generic medicines, including hydroxychloroquine, the controversial antimalaria drug being debated as a coronavirus treatment. Kodak says that the loan will create up to 350 jobs at two manufacturing facilities in the U.S.
In May, the Trump administration also gave a contract that could be worth up to $812 million to Phlow Corp., a startup in Virginia, to manufacture APIs for a number of essential drugs including blood pressure medications and painkillers.
Although onshoring API manufacturing has become a prime goal of several U.S. lawmakers, one analyst expressed surprise that the first government contracts were not awarded to companies with more experience in manufacturing generic APIs.
“We find it puzzling why generic pharmaceutical companies who have the capabilities and know-how for this have not yet been awarded such contracts,” SVB Leerink’s Ami Fadia told investors on Wednesday. “Bringing pharma manufacturing back to the U.S. is no easy feat and (we) continue to believe that leading generic manufacturers will eventually be part of the solution.”
