Kodak CEO Says Moving Forward On Generic Drug Ingredients Venture, With or Without Federal Loan

Eastman Kodak Co KODK CEO Jim Continenza said Monday that the company would push ahead with making generic drug ingredients, irrespective of whether it receives government assistance or not, the Wall Street Journal reports.

What Happened: “It was put on hold but we are still going forward and we are cooperating in every way,” Continenza said at the WSJ Tech Live conference on the stalled $765 million loan deal with the United States government.

The executive defended the speed at which the deal was put together, pointing towards the U.S. dependence on foreign countries for drugs. “It came together quickly, but I think it also needs to,” said Continenza. 

He attributed Kodak’s handling of the deal to understaffing caused by the pandemic. “About two to three days into it, it started running amok,” the Kodak CEO said at the WSJ event.

Why It Matters: Kodak is facing an investigation from the Securities and Exchange Commission on how it disclosed the federal loan for making generic drugs, which led to a spike in its share in late July.

In August, the U.S. International Development Finance Corporation, which was due to extend the loan, decided to not “proceed any further” until the company was cleared of allegations.

Last month, a special committee appointed by the company’s board concluded there were no violations of the law but flagged concerns related to corporate governance.

Kodak executives, including Continenza, received 1.75 million stock options a day before it was disclosed to the public, the Journal reported earlier.

When asked at the conference about the grant of the options, Continenza maintained that he had not sold any shares and that the grants “shouldn’t be the focus.”

Price Action: Kodak shares gained almost 2% in the after-hours trading at $9.06 on Monday after closing 1% lower at $8.88.

Photo courtesy: El Grafo via Wikimedia