Thread by @katherineefoley

Did you do a double take when you saw the US govt gave Kodak, the old photo company, $765 MILLION in loan money to make generic drugs? Me too. But based on reporting, here's what seems to be going on (a thread) 1/x
qz.com/1888383/kodak-…

From an industrial manufacturing standpoint, specialty chemicals (like drugs and photography developing chemicals) have some similarities. They often both use batch manufacturing. Picture giant vats of chemical reactions taking place. 2/x

Theoretically, for at least some generic drugs, making the active ingredients would be matter of thoroughly cleaning existing supplies, using higher purities of chemicals (medical grade as opposed to industrial), and expanding space. That's what some of the loan is covering 3/x

The loan was given as part of the Defense Protection Act via the US International Development Finance Corp. Funding comes from the CARES Act, though, which implies that SOME of these generic drugs may be #COVID19 related? I am not sure how quick those could get off the ground 4/x

It seems to me like investing in Kodak's batch manufacturing capabilities* would be complementary to BARDA's investment in Phlow, another generic drug company (public benefit corporation, technically). Instead of batch manufacturing, Phlow does more continuous manufacturing 5/x

(* Kodak didn't get back to me with a comment on the specific drug manufacturing processes. 5.5/x)

BARDA invested in Phlow earlier this year, and it was a big gamble; Phlow hasn't been around long enough to DO anything (Jan. 2020 creation). But with startup funds, Phlow could do a lot of R&D to get continuous manufacturing off the ground qz.com/1884683/covid-… 6/x

By investing in companies that do both kinds of drug manufacturing, the US govt is trying REALLY HARD to make drugs on US soil again. Currently, we get a lot of ingredients for pharmaceuticals from China and India 7/x qz.com/1826939/how-co…

It's pretty on-brand for this administration to want to bring all that drug production to the US, and it's not necessarily a bad idea! But the loan investment in Kodak is the second example of the govt giving $$ a company that doesn't have a big track record in...making drugs 8/x

Tl;dr: you'd want both batch and continuous manufacturing capabilities if you were trying to bring drug active ingredient production to the US; US doesn't have a lot of places that do that, so the govt is finding new companies that can step in: qz.com/1888383/kodak-… 9/10

Will it work? Who knows! We don't know what active ingredients Phlow is making (CEO said he couldn't tell me bc of national security) + Kodak is only just starting to bulk up its Rochester NY and St. Paul MN facilities. But it's a bet that isn't surprising with this admin 10/10

Oh and ofc I forgot about the whole corporate disclosure debacle. Adds another color to the story:

wsj.com/articles/kodak…