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Kodak has been given a $765 million loan from the federal government to produce drugs in the US, reportedly including hydroxychloroquine, the malaria medicine that President Donald Trump has been pushing as a COVID-19 treatment. Trump on Tuesday directed the US International Development Finance Corporation to sign a letter of interest to provide the loan under the Defense Production Act to Eastman Kodak Company to launch Kodak Pharmaceuticals.

Kodak will rely on its “vast infrastructure, deep expertise in chemicals manufacturing, and heritage of innovation and quality” in launching Kodak Pharmaceuticals, executive chair Jim Continenza said. “Kodak is proud to be a part of strengthening America’s self-sufficiency in producing the key pharmaceutical ingredients we need to keep our citizens safe.”

Peter Navarro, assistant to the president, added that the COVID-19 pandemic has brought to light “that Americans are dangerously dependent on foreign supply chains for their essential medicines.”

“Today, we are bringing together the significant resources and expertise of the private sector and US government,” said Adam Boehler, CEO of the Development Finance Corporation.

Following the announcement, Kodak shares soared as much as 500% on Wednesday and trading reportedly had to be halted multiple times due to volatility. As of 12:45 p.m. ET, Kodak was up 315%, trading at $33 a share.

Kodak will produce pharmaceutical components for drugs that the FDA declares as being essential but in chronic national shortage. According to The Wall Street Journal, that will include hydroxychloroquine — even though emergency use of the drug for COVID-19 patients was revoked by the FDA in June after the World Health Organization suspended trials of it in May. Trump began taking hydroxychloroquine as a coronavirus preventative in May despite a lack of evidence, saying the malaria drug worked for the virus.

Kodak is now under investigation by the US Securities and Exchange Commission, The Wall Street Journal reported Aug. 4 citing unnamed sources. The SEC investigation is reportedly due to Kodak’s shares spiking when news of the government loan broke last week, and then dropping on Monday due to a dilution in Kodak stock. This led to Kodak executives potentially unlocking a windfall via their stock option grants, WSJ said — and some of those grants were given on July 27, a day before the $765 million loan was announced by the Development Finance Corporation.

Kodak and the SEC didn’t immediately respond to a request for comment.

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