Drug developer (and battleground biotechnology stock) Mannkind Corp (MNKD) has partnered with Sanofi (SNY) for the global commercialization of its approved inhaled insulin product, Afrezza. MNKD jumped 20% on the news Monday.
A contentious name in healthcare (27 articles have been penned at Seeking Alpha since the beginning of June), MannKind bulls already herald the established diabetes company’s involvement as validation of the product. Bears, meanwhile, will contend that the P/L split and MannKind’s onerous balance sheet will be difficult to overcome.
MannKind will receive an upfront payment of $150 million and potential milestone payments of up to $775 million, and will share global profits and losses – Sanofi at 65% share and MannKind at 35%. Sanofi will advance to MannKind up to $175 million of the collaboration expenses.
MannKind ended the second quarter with $41.2 million in cash/equivalents and raised $40M in July through a longstanding financing arrangement with Deerfield. The Sanofi deal brings the company’s cash balance in August to just over $200 million, while the company has some $200 million in debt and is potetially tacking on another $175 million through its Sanofi collab.
