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. The search finally came to an end in Aug 2014, when the company 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 received an upfront payment of $150 million related to the agreement from Sanofi. The payment came close on the heels of the completion of the deal.

Per the deal, Sanofi is responsible for commercial, regulatory and development activities pertaining to Afrezza across the globe. The companies have 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 the company struck 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.

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.

Investors in the healthcare sector can also consider stocks like Gilead Sciences (GILD) and Medivation (MDVN).

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