According to the Wall Street Journal, the Eastman Kodak Company (KODK) - Get Report is shifting its business model towards drug production. The former photography giant has been granted a $765 million government loan to boost production of a variety of drugs.
Kodak currently makes print and advanced materials and chemicals.
The government loan is from the Defense Production Act, and must be repaid over 25 years. The loan was previously used to speed the production of supplies such as ventilators.
Kodak expects its pharmaceutical work to become 30% to 40% of its business, according to the Wall Street Journal.
On the news of the loan on Tuesday, Kodak’s shares tripled. On Wednesday, Kodak's stock continued to rise, up 500%.
According to TheStreet's Jim Cramer, the news from Kodak is "very disappointing."
“Kodak, you know, I met them when they went public, and it wasn’t really clear what they did. Now I know what they do. They work for Peter Navarro. And this hydroxychloroquine—it’s never going to stop! Over and over, there were tests that were done that found it not valuable," he said.
Kodak will be making drug ingredients for the antimalarial drug hydroxychloroquine, which President Trump said he was taking to prevent contracting Covid-19. However, medical evidence, including the FDA, caution against using hydroxychloroquine to treat the coronavirus because of heart rhythm problems.
“I don’t think it’s motivated by doctors who want Biden to win. I think it’s motivated by doctors who said, you know what, there’s too many issues with heart issues, and it’s not working," Cramer added.
Kodak filed for bankruptcy in 2012, after its digital camera business failed to keep up with advanced technology trends.
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