MannKind said today it has agreed with Sanofi to terms of a settlement formally ending the companies’ license and commercialization agreement for Afrezza®.
Sanofi terminated the agreement after 17 months, MannKind disclosed in January. The partnership centered around Afrezza, an inhaled form of insulin that had been co-marketed with the pharma giant under an up-to-$925 million worldwide exclusive licensing agreement.
A Sanofi affiliate, Aventisub, has agreed to forgive the outstanding $71.56 million balance on a promissory note and security agreement with MannKind, which has been terminated.
In addition, Sanofi agreed to purchase $10.2 million worth of insulin from MannKind in early December as part of a pre-existing commitment following termination of the collaboration and MannKind's exercise of an insulin “put” option.
Sanofi also agreed to accelerate paying out the balance of the “put” option, with the planned $30.6 million payment to MannKind set to be completed by January 9, 2017. MannKind added that it will not be required in return to deliver any insulin to Sanofi.
“All issues arising out of the license and collaboration agreement, the supply agreement, the promissory note, the security agreement, and the transition agreement are resolved,” MannKind said in a statement
MannKind disclosed the settlement with Sanofi a day after reporting third-quarter results. MannKind finished the 3 months ending September 30 by recognizing $161.781 million in net revenue from the collaboration with Sanofi—nearly all of the $162.354 million in revenue reported by the company during Q3. The remaining revenue, $573,000, consisted of sales of Afrezza, since MannKind started distributing the inhaled insulin treatment in July.
The Sanofi-related revenue consisted of a $150 million upfront payment and milestone payments totaling $50 million, net of $64.8 million of net loss share with Sanofi; as well as $17.4 million in sales of Afrezza and $9.2 million in sales of raw insulin, both to Sanofi.