MannKind Corporation (MNKD) recently signed a license agreement with Colby Pharmaceutical Company granting the latter exclusive rights to its early stage cancer programs.
MannKind will be receiving upfront and milestone payments relating to the development, approval and commercialization of the products along with upfront and potential milestone payments of approximately $140 million in total. The company is also eligible to receive tiered royalties on the sale of these products.
As per the agreement, Colby will have exclusive worldwide rights for the development and commercialization of disease-specific antigen compounds and intra-lymph node delivery technologies from the MKC1106 active immunotherapy programs. MannKind is currently developing these programs to treat patients suffering from melanoma, prostate, hematological disorders and other cancers.
We remind investors that MannKind has already completed a phase I program on MKC1106-MT for human melanoma. The study successfully achieved its primary objectives.
Our Take
We are positive on the deal. The partnership program will safeguard MannKind’s financial interests while furthering pipeline development.
Meanwhile, we expect investor focus to remain on MannKind’s lead pipeline candidate Afrezza. Afrezza is an inhaled insulin being developed for the treatment of type I (MKC-171 study) or type II (MKC-175 study) diabetes. In October this year, the company finished enrolling patients for both studies. MannKind believes that it can complete both trials in the second quarter of 2013 and submit a new drug application in the third quarter of 2013.
We also note that the diabetes market already has big players like Eli Lilly (LLY) , Novo Nordisk (NVO) and Sanofi (SNY).
Currently, we have a Neutral recommendation on MannKind, which carries a Zacks #3 Rank (short-term Hold rating).
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