Sanofi Ends Insulin Pact, Forgives $72 Million Debt

MannKind Corporation, a Valencia, California-based biopharmaceutical company, has entered into an agreement with Sanofi to terminate remaining terms relating to the companies’ previously announced termination of their pact for inhalend insulin.

In January 2016, MannKind Corporation and Sanofi terminated their license and collaboration agreement for the development and commercialization of an inhaled insulin, Afrezza (insulin human) inhalation powder.

Sanofi and Mannkind Corporation had launched Afrezza(insulin human) inhalation powder, in the United States in February 2015.. Afrezza was approved by the US Food and Drug Administration to control high blood sugar in adults with Type 1 and Type 2 diabetes. Afrezza is a drug-device combination product that consists of a dry formulation of human insulin delivered from a small and portable inhaler.

In 2014, the companies had formed a worldwide exclusive licensing agreement, worth up to $925 million, to develop and commercialize Afrezza. Under the now terminated collaboration agreement, Sanofi was responsible for global commercial, regulatory, and development activities. MannKind received an upfront payment of $150 million with potential milestone payments of up to $775 million. Under a separate supply agreement, MannKind was to manufacture Afrezza at its manufacturing facility in Danbury, Connecticut.

Under the new agreement, Aventisub LLC, a Sanofi affiliate headquartered in Greenville, Delaware, has forgiven the full $71.56-million amount of an outstanding loan balance. MannKind is also relieved from its obligation to pay $0.5 million in previously uncharged costs related to the collaboration.

Sanofi will purchase $10.2 million-worth of insulin from MannKind in early December 2016 as part of its pre-existing commitment to purchase insulin following termination of the collaboration and MannKind’s exercise of a “put” option. The $30.6 million-balance of the insulin “put” option is accelerated with Sanofi completing the cash payment of $30.6 million to MannKind by January 9, 2017. This payment will be made without MannKind being required to deliver any insulin to Sanofi. All issues arising out of their license and collaboration agreement, a supply agreement, a promissory note, a security agreement, and a transition agreement are resolved.

Source: MannKind Corporation

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