Mannkind Gets A Deal With Sanofi

The drug company MannKind has signed up Sanofi as a partner to sell Afrezza, the inhaled insulin it has long labored to get to market. FDA okayed the product in late June, fully five years after California-based MannKind applied for approval. The firms intend to launch Afrezza in the U.S. in early 2015.

Sanofi will pay MannKind $150 million up front, and loan it up to $175 million, to take over global commercial, regulatory, and development activities. Sanofi will also make up to $775 million in milestone payments and give MannKind a 35% share of profits and losses. MannKind will manufacture Afrezza at its Danbury, Conn., plant and may collaborate with Sanofi to expand production.

For Sanofi, the $925 million deal could help bolster an $8.7 billion-per-year diabetes business. The firm was second, after Novo Nordisk, in the $38 billion diabetes market in 2013, according to market research firm Evaluate. However, its $7.6 billion-per-year long-lasting insulin product, Lantus, loses patent protection next year.

Afrezza can provide insulin to patients without the traditional multiple daily injections, points out Pierre Chancel, senior vice president of Sanofi’s diabetes division. Yet market success is far from ensured. Novo and Eli Lilly & Co. both stopped development of inhaled insulins, and Pfizer pulled one from the market.

MannKind’s 88-year-old chairman, Alfred E. Mann, hopes to succeed where the others have failed. The businessman and inventor has invested much of his own money to keep the 23-year-old company afloat. As of the end of June, MannKind, which has been publicly traded since 2004, had accumulated a net loss of $2.4 billion.

“We are so very pleased and honored that Sanofi has joined with MannKind to bring Afrezza to patients with diabetes worldwide,” Mann said in announcing the deal. Without the payments from Sanofi, the company’s cash would have run out sometime next year.