MannKind shares surged 5.66% to $5.97 in pre-market trading Thursday after the company announced that it had received $50 million in milestone payments from Sanofi. The payments were tied to satisfaction of manufacturing milestones specified in the company’s worldwide licensing agreement with Sanofi. MannKind had previously received $150 million upfront payment from Sanofi last year.

MannKind Corporation Jumps On $50M Milestone Payment From Sanofi

MannKind is making some progress

In August last year, MannKind entered a $925 million licensing agreement with the French drugmaker to market its inhaled insulin product Afrezza. Of that, MannKind received $150 million upfront, while the remaining $775 million was linked to the completion of various development, regulatory and sales milestones. The latest milestone payment signals that MannKind is making progress in launching Afrezza.

The California-based company is expected to launch Afrezza in the first quarter of 2015. But investors have been concerned about a number of issues. Though MannKind continues to reiterate that the French company is fully committed to marketing Afrezza, the recent management transition at Sanofi may shift the company’s focus to other diabetes candidates.

That’s the reason MannKind did not reflect the $150 million upfront payment in its third-quarter revenue. At the Piper Jaffray Conference last month, MannKind CFO Matthew Pfeffer said that it will have to repay Sanofi if the French company walks away from the deal. Another concern is that Sanofi was recently sued over allegations that it paid kickbacks to doctors to prescribe its medicines.

MannKind to present at JPMorgan Conference

Afrezza’s success will depend largely on pricing. It is expected to cost more than a traditional insulin injection. Moreover, patients with lung diseases cannot use Afrezza. Inhaled insulin promises greater convenience than traditional injections. But given these concerns, it’s unclear how widely the drug will be adopted.

Separately, MannKind announced that it would present at the JPMorgan Healthcare Conference on Wednesday, January 14, 2015 at 1:30 PM (PST) in San Francisco. At the event, the company is expected to provide more details on Afrezza launch