The shares of MannKind Corporation surged after announcing its collaboration and license agreement with Receptor Life Sciences, a newly formed entity. The agreement covers the development of multiple inhaled therapeutic products to treat chronic pain, neurologic diseases, and inflammatory disorders.
The stock price of MannKind climbed more than 10% to $0.87 per share at the time of this writing around 10:45 AM in New York.
Advancing inhaled products
In a statement, MannKind CEO Mathew Pfeffer said, “We are pleased that Receptor Life Sciences has selected our formulation and delivery technology to advance its portfolio of innovative inhaled products.”
According to him, the collaboration demonstrates the fundamental value of the biopharmaceutical company’s platform technology. He added that the risk sharing structure of the agreement allows the biopharmaceutical company to diversify its product opportunities without losing focus on its lead program.
Terms of the agreement
MannKind agreed to perform initial formulation studies. The company will work with Receptor Life Sciences to develop inhaled formation of certain undisclosed compounds.
The biopharmaceutical company and the newly formed entity will collaborate on the clinical development of investigational products.
Receptor Life Sciences will be responsible for the development costs.
MannKind transfer manufacturing technology to the licensee that will be will be responsible for the manufacturing and commercialization activities.
The biopharmaceutical company will be eligible to receive development and commercialization milestones of up to $102.25 million. It will also receive mid-single to low, double-digit royalties on net sales of products.
MannKind Board under scrutiny
The law firm Harwood Feffer LLP announced that it is investigating Board of Directors of the biopharmaceutical company in connection with allegations of possible breached of fiduciary duties to shareholders.
The accusations were connected to the termination of its collaboration and license agreement with Sanofi-Aventis U.S. LLC for the product Affrezza. The law firm noted a report that Sanofi decided to terminate the agreement because the prescription levels of Affrezza failed to meet modest expectation.
The report caused MannKind’s stock price to decline almost 50% to $0.75 per share on January 5, 2015.
According to law firm’s inquiry is focused on determining whether the Board of Directors violated its fiduciary duties to shareholders, grossly mismanaged the biopharmaceutical company, and/or committed abuses of control related to the matter.