2014 was a great year for MannKind Corporation (NASDAQ:MNKD). Its diabetes candidate Afrezza won the USFDA approval. The company signed a $925 million worldwide marketing agreement with French drugmaker Sanofi SA (ADR) (NYSE:SNY) (EPA:SAN). Afrezza is expected to be available in the U.S. in early 2015. In fact, some analysts predict its sales to surpass $3.65 billion by 2025.

MannKind

Insider selling in MannKind stock jumps 428%

Despite all the enthusiasm and positive news, MannKind stock has gained a meager 4% since the beginning of this year. And short interest has skyrocketed from 47.46 million shares on Dec.31, 2013 to 83.42 million shares on Nov.14, 2014. A big chunk of the increase in short interest took place after MannKind signed marketing deal with Sanofi.

Seeking Alpha contributor Looking For Diogenes says that MannKind insiders have sold 3.18 million shares of the company year-to-date. That’s a staggering 428% increase from 742,762 MannKind shares sold by insiders in 2013. Note that about half of the insider sales this year were sold under SEC rules pertaining to Automatic Sales.

Another big concern is financial terms of MannKind’s deal with Sanofi. On August 11, the Valencia-based company said in an SEC filing that it would reveal the details during the September quarter results. We are about to exit 2014, and the company hasn’t yet provided the details it had promised. The company has only delayed it to the next quarter’s results.

What if Sanofi walks away from the deal?

MannKind has received $150 million in upfront payment from Sanofi. But that upfront payment was not reflected as third-quarter revenue because the company was unable to figure out the manufacturing cost structure. Last month, Sanofi didn’t spend much time during its Boston presentation to highlight its commitment to Afrezza.

On Dec.2, MannKind CFO Matthew Pfeffer revealed at the Piper Jaffray Healthcare Conference as to why the company deferred the $150 million upfront payment. Pfeffer said that if Sanofi walks away from the deal, MannKind will have to repay the legal financial obligations to the French company. That’s in stark contrast with MannKind’s previous statements that the Sanofi deal was in the best interest of Afrezza launch and eventual success of the U.S. biopharmaceutical company.

MannKind shares fell 3.22% to $5.31 in early trading Tuesday.

Full DisclosureVikas Shukla has no position in MannKind stock, nor has he ever shorted this stock.