MannKind Corporation (NASDAQ:MNKD) announced the conclusion of a worldwide marketing deal for its inhalable insulin drug Afreeza with French drug maker Sanofi SA (ADR) (NYSE:SNY) (EPA:SAN). The closing of the deal comes after the review of the transaction under the Hart-Scott-Rodino Act by the U.S. Federal Trade Commission. The completion also follows documentation related to the $175 million credit line for manufacturing expenses from a Sanofi affiliate.
MannKind announced the deal last month
Under the terms of the licensing agreement (announced last month), MannKind will be responsible for producing Afrezza at its plant in Danbury, Conn., and Sanofi will be responsible for marketing and regulatory compliance. As per the deal, the Paris-based company will pay $150 million upfront to the other party, and $775 million more on achieving a certain milestones.
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Moreover, MannKind will keep 35% of the profit while the remaining profits will go to Sanofi. The companies also plan to boost the manufacturing capacity to meet expected demand. In July, Food and Drug Administration (FDA) approved Afrezza for sale.
In August, at the time of the announcement of the licensing agreement, Pierre Chancel, Sanofi Senior Vice President Diabetes Division, said, “Afrezza is a further addition to our growing portfolio of integrated diabetes solutions.”
“We are so very pleased and honored that Sanofi has joined with MannKind to bring Afrezza to patients with diabetes worldwide,” stated Alfred Mann, MannKind’s Chairman and Chief Executive Officer.
Afrezza to help Sanofi maintain dominance
Sanofi has a robust diabetes solutions portfolio, which includes medications along with the drug delivery systems and blood glucose monitoring devices. The addition of Afrezza to Sanofi’s leading portfolio of pharmaceuticals will help patients with another option in fighting diabetes. The drug will benefit the nearly 26 million Americans with diabetes, but the challenge for Sanofi will be to convince payers, like pharmacy benefit managers, that Afrezza is cost effective.
Afrezza is an inhaled insulin therapy for adults with type 1 and type 2 diabetes. It is expected that the companies will launch Afrezza in the U.S. by the first-quarter of 2015.
The product is almost ready for sale, which is a huge relief as there were many questioning if inhaled insulin products would succeed, especially after the failed attempt from Pfizer and many setbacks faced by MannKind to get the drug approved by FDA.