MannKind shares surged 33.12% to $0.620 on Thursday after the company announced a settlement agreement with French drugmaker Sanofi. The biotech company said that Sanofi’s affiliate Aventisub has agreed to terminate the promissory note and security agreement with MannKind. Aventisub has also agreed to forgive the full outstanding loan balance of $71.56 million.

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Image Source: MannKind Corporation (Screenshot)

Sanofi to pay $30.6 million to MannKind

Under the terms of the deal, Sanofi will purchase $10.2 million worth of insulin from the Valencia-based company by December 3, 2016 under the Insulin Put Option. The French pharmaceutical giant has also agreed to make a cash payment of $30.6 million to MannKind as acceleration and in replacement of all other payments that Sanofi was otherwise required to make in the future.

The cash payment will be made within 60 days after the Effective Date, without MannKind being required to deliver insulin for such payment. Sanofi has also relieved the US company of its obligation to pay $0.5 million in previously uncharged costs. Sanofi had terminated its agreement with MannKind earlier this year after poor sales of Afrezza. The French company had told Bloomberg that Afrezza “never met even modest expectations.”

The Valencia-based biotech company entered into an amendment to its agreement with Amphastar Pharmaceuticals. MannKind has extended the term of the Amphastar agreement from December 1, 2019 to December 31, 2023. The delivery schedule has also been modified such that Amphastar will ship insulin worth €2.7 million in 2017, €8.9 million in 2018, €11.6 million in 2019, €15.5 million in 2020 and 2021; and then €19.4 million in 2022 and 2023.

MannKind generates impressive revenues in Q3

The biotech firm released its fiscal third-quarter results earlier this week. The company reported revenues of $162.4 million in Q3. The significant spike in revenues boosted its earnings to $126.5 million or $0.26 per share. By comparison, it had incurred a loss of $31.9 million in the same quarter a year ago. However, it doesn’t paint a bright picture because most of the revenues came from the company’s partnership with Sanofi, which no longer exists.

The Valencia-based company started distributing its inhaled insulin drug Afrezza in July. Afrezza generated only $573,000 in sales during the latest quarter. The company’s cash and cash equivalents also dipped from $59.1 million at the end of 2015 to $35.5 million as of September 30.