MannKind Corporation (MNKD) has been in search of a suitable partner ever since the FDA cleared Afrezza inhalation powder for the improvement of glycemic control in adults suffering from diabetes mellitus in Jun 2014. In Aug 2014, MannKind finally ended its search when it announced a worldwide agreement with Sanofi (SNY) on Afrezza (read: MannKind Enters into a Global Deal with Sanofi for Afrezza).
Earlier in the week, MannKind announced that it has completed the above deal with Sanofi. The exclusive collaboration and licensing agreement between MannKind and Sanofi is for the development and commercialization of Afrezza.
As per the deal, Sanofi is responsible for commercial, regulatory and development activities pertaining to Afrezza across the globe. The companies also inked a supply agreement according to which MannKind will manufacture Afrezza at its manufacturing facility in Danbury, CT. Shares of MannKind had gained significantly after striking the partnership deal with Sanofi.
The completion of the deal follows the U.S. Federal Trade Commission's review of the transaction under the Hart-Scott-Rodino Act. It also follows the completion of documentation for the $175 million loan facility provided by Sanofi related to the agreement. MannKind will receive a $150 million upfront payment shortly.
Our Take
We are encouraged by MannKind’s decision to choose Sanofi as a partner for Afrezza. Given Sanofi’s significant experience in marketing diabetes products, Afrezza is in safe hands. We expect investor focus to remain on the performance of Afrezza following its launch, which is expected in early 2015.
MannKind carries a Zacks Rank #3 (Hold). Better-ranked stocks in the health care sector include Gilead Sciences (GILD) and Medivation (MDVN). Both stocks sport a Zacks Rank #1 (Strong Buy).
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