Thursday, July 30, 2020

Kodak and its hydroxychloroquine connection

Following is part of the Kodak story by Judd Legum at

Kodak, once an iconic American brand valued at $30 billion, has been in dire straits for more than a decade. It filed for bankruptcy in 2012 and emerged in 2013. But Kodak, which built its business selling film, never successfully transitioned to digital.

After bankruptcy, Kodak’s old stock was worthless, but the newly issued shares peaked at over $36 in early 2014. But since then, it has rapidly declined, with the price mired well below $3 since March. In recent years Kodak has been selling its patents, buildings, and other assets for cash. In 2018, the company attempted a pivot to cryptocurrency.

Then, late Tuesday afternoon, everything changed. President Trump announced that he was “using the Defense Production Act to provide a $765 million loan to support the launch of Kodak Pharmaceuticals.” Kodak would now “produce generic active pharmaceutical ingredients,” reducing the country’s reliance on China. Trump described it as “one of the most important deals in the history of U.S. pharmaceutical industries.”

The stock immediately spiked, reaching $53 by 10 AM on Wednesday. To put that in perspective, if you owned 100,000 Kodak shares on Monday morning, they were worth $210,000. By 10 AM on Wednesday, those same shares were worth $5.3 million.

The hydroxychloroquine connection

The deal with Kodak was brokered by White House trade advisor Peter Navarro. In recent days, Navarro has openly feuded with Anthony Fauci, the nation’s leading infectious disease expert. Navarro wrote an op-ed for USA Today with the title, “Anthony Fauci has been wrong about everything I have interacted with him on.”

One of Navarro’s chief complaints is that Fauci was insufficiently supportive of using hydroxychloroquine, an anti-malarial drug, to treat or prevent COVID–19. The deal with Kodak appears to be a way for Navarro to continue to push hydroxychloroquine. As part of the deal, Kodak will reportedly manufacture chemicals that will allow more hydroxychloroquine to be produced domestically.

Studies have shown, however, that hydroxychloroquine is not effective in treating or preventing COVID–19. A study by the University of Minnesota, released June 3, found hydroxychloroquine “does not prevent Covid–19.” A rigorous study by the UK government, released June 5, found hydroxychloroquine had “no benefit for hospitalized Covid–19 patients.” On June 15, the FDA revoked its emergency authorization for the drug, stating that its “unlikely to be effective in treating COVID–19.” The WHO dropped hydroxychloroquine from a large clinical trial on June 17, “after available data indicated the drug was not effective for Covid–19.” (Navarro has keyed in on one outlier study that experts say was deeply flawed.)

But, despite the evidence, Trump and his advisers remain keenly interested in the drug. On Tuesday, Trump praised Dr. Stella Immanuel, who claimed in a viral video that hydroxychloroquine is a “cure“ for COVID–19. Trump said Immanuel was ”spectacular“ in the video, adding that he believed hydroxychloroquine ”works in the early stages" of the virus.

Immanuel, however, is known for holding a number of views that are not supported by scientific literature, including that “the uterine disorder endometriosis is caused by sex with demons that takes place in dreams.”

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