Shares of Eastman Kodak Co sank by 27.9% on Tuesday after its $765-million loan agreement with the American government was put on hold. The company was slated to produce pharmaceutical ingredients but was stopped due “recent allegations of wrongdoing”.
Kodak, the famous maker of cameras and shooting equipment had recently stepped into the medicine industry. With camera sales on the decline, as smartphones now come equipped with high-tech camera technology, Kodak was eyeing the loan from the US government.
Basic ingredients
The company was set to produce the basic ingredients used in coronavirus drugs, especially used to treat the symptoms.
The US government had announced the loan on July 29 in a bid to reduce dependence on foreign countries for medical supplies. Most countries receive medicines from India and other Asian countries. However, with no 100 per cent effective medicine in the ropes, this remains a hit-and-trial effort.
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In the aftermath of this announcement in July, the shares of the company had jumped by 60 per cent. Multiple Pharma companies are currently working on vaccines, with large-scale trials already underway. Russia, for instance, may make its state-backed vaccine public as early as September, making it the first in any country.
Alarm bells
Alarm bells rang when Democratic lawmakers asked federal regulators to investigate securities transactions made by the company and its executives.
Donald Trump promised to investigate the allegations go wrongdoings.
“Recent allegations of wrongdoing raise serious concerns,” US International Development Finance Corp (DFC) tweeted on Friday.
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Earlier, another camera making company Fujifilm moved on to the Pharma industry. The Japanese company has begun experiments on vaccines, with trials underway.
Kodak dates back to 1888, when it was founded as “The Eastman Kodak Company” by George Eastman. Owing to its classic cameras, it became a global household name for photography.
Owing to the shift in the industry which now favours digital photography, the company has struggled over the last two decades. In 2012, the company filed for bankruptcy protection in the US. It started making drug ingredients four years ago, but hadn’t thought of expanding production until after the pandemic hit.
Source: Thanks WIONews.com