Via the Rochester Democrat and Chronicle (articles by Victoria E. Freile and Brian Sharp), the best summary of this story that I've seen:
Eastman Kodak Co. will receive a $765 million government loan to help expedite the domestic production of generic drugs to treat a variety of medical conditions and loosen the country's reliance on foreign sources, officials said Tuesday. Specifically, the Rochester-based company will make the ingredients so often produced overseas so the country can produce its own medications.
The move is expected to create at least 350 new jobs, launching a new business unit for the Rochester-based company that — when at peak production in four to five years — could produce 25% of the active ingredients for "non-biologic, non-antibacterial, generic pharmaceuticals."
...Continenza told The Journal that the loan has terms similar to a commercial loan and must be repaid over 25 years. Kodak will produce “starter materials” and “active pharmaceutical ingredients” used to produce generic medicines, he said. “We have a long, long history in chemical and advanced materials — well over 100 years,” Continenza said. He added that Kodak’s existing infrastructure allows the company “to get up and running quickly.”
...The operation will build on Kodak's existing Specialty Chemicals Group, a segment that is dispersed across a three-building complex at Eastman Business Park, with multiple cells or bays that operate as its own chemical factory so that multiple processes can be run concurrently. That operation already is working with various markets, including pharmaceuticals. In company brochures, Kodak touts the 88 reactors, more than 25 centrifuges, filter and membrane presses.I think this is a pretty logical move on the part of the Trump Administration, i.e. they clearly want to reshore the pharmaceutical supply chain, and Kodak is (I strongly suspect) the largest group of not-currently-spoken-for large scale reactors in the country. They're making noises about making APIs there, and I'm pretty skeptical of that, but the better part of a billion dollars will get you at least partway there. This bears watching.
25% of non-biologic/non-antibacterial generics? Call me highly skeptical.
ReplyDeleteThat would be a lot, I think. I'm broadly skeptical.
DeleteWithout specific knowledge of Kodak's true capabilities I can imagine implementation of the bulk production of a vast number of generic drugs as relatively doable from their technical expertise applied to established chemical routes (thus less skeptical with 25% target). Frankly the reason most generics shifted off shore was not due to basic technical issues but the expense of labor, facilities and other overhead (particularly environment regs) making domestic manufacture less cost effective. I do suspect the potential for a weaker awareness of GMP Quality issues will be a greater challenge to address for the effort although they should have more direct access to resources to support this than most current generic suppliers. Perhaps another problem will be obtaining the necessary raw materials in timely/economical routes since majority of those are also likely produced overseas
ReplyDeleteI'm interested to see how long this will last and if an infusion a government capital will always be needed to keep this afloat. The actual manufacture of generic SM API isn't too technically challenging - it's making enough revenue on the razor thin (if any!) margins to keep the business profitable to any degree. Without government subsidies I have doubts that this will exist for long. But, if the government is willing to subsidize the losses to keep SM API production in America to some extent, so be it.
ReplyDeleteI agree with both points above, especially on the profitability.
ReplyDeleteKodak diversifying into pharma is kind of like a coal mining company diversifying into typewriter manufacturing.
ReplyDeleteNot really. It's pharma ingredients and manufacturing, not e.g. drug discovery or development, and Kodak has experience working in a field where the value and technical requirements of the product is as high or higher as for APIs. Companies add and switch businesses all the time - look at GE, going from lightbulbs to financial services back to hi-tech manufacturing like medical devices, aviation, and energy. As noted above, the key is going to be whether they make money doing it.
DeleteSeriously: it is my understanding that one of the new Kodak products will be .....hydroxychloroquine. If anyone can correct me on this, then please do so.
ReplyDeleteKodak in New York State has an environmental legacy. But over the past four years, US environmental regulations have been weakened, so maybe that would work to the benefit of Kodak.