MannKind Shares Soar On Deal With Sanofi On Afrezza; Q2 Loss Widens

(RTTNews) - Biopharmaceutical firm MannKind Corp. (MNKD) on Monday struck a worldwide licensing agreement with French drugmaker Sanofi (SNY) for development and commercialization of its inhalable insulin treatment Afrezza. Mannkind shares are soaring nearly 23 percent on the news in early deals.

"We are so very pleased and honored that Sanofi has joined with MannKind to bring Afrezza to patients with diabetes worldwide. Sanofi is the ideal partner given their complementary product portfolio, their vast insulin market presence and a leading global commercial infrastructure," MannKind's Chairman and CEO Alfred Mann said in a statement.

Afrezza is a rapid-acting inhaled insulin therapy for adults with type 1 and type 2 diabetes. MannKind will manufacture Afrezza at its Danbury, Connecticut-based manufacturing facility, while Sanofi will be responsible for its global commercial, regulatory and development activities.

The agreement will see MannKind receiving an upfront payment of $150 million and potential milestone payments of up to $775 million. Sanofi and MannKind will share profits and losses on a global basis, with Sanofi retaining 65 percent and MannKind receiving 35 percent.

Sanofi has also agreed to advance to MannKind its share of the collaboration's expenses up to a limit of $175 million. The companies plan to launch Afrezza in the U.S. in the first quarter of 2015.

"Afrezza is an innovative drug-device combination product consisting of a dry formulation of human insulin delivered through a small, discreet inhaler. Afrezza is a further addition to our growing portfolio of integrated diabetes solutions," said Pierre Chancel, Sanofi Senior Vice President Diabetes Division.

Separately, Mannkind reported a loss for the second quarter that widened from last year, reflecting an increase in non-cash stock compensation expense. Loss per share for the quarter also came in wider than analysts' expectations.

The Valencia, California-based company reported a net loss of $73.37 million or $0.19 per share for the second quarter, wider than $46.12 million or $0.16 per share in the prior-year quarter.

On average, nine analysts polled by Thomson Reuters expected the company to report a loss of $0.12 per share in the quarter. Analysts' estimates typically exclude special items.

Loss from operations widened to $69.85 million from $41.59 million a year ago.

Operating expenses grew to $69.85 million from last year's $41.59 million owing to an increase in non-cash stock compensation expense of $30.5 million and a 38 percent rise in research and development expenses to $37.3 million.

General and administrative (G&A) expenses also increased 12.4 percent to $32.5 million from last year.

In Monday's regular trading session, MNKD is currently trading at $9.97, up $1.84 or 22.63% on a volume of 8.71 million shares.