Sanofi has terminated its 17-month-old collaboration with MannKind to license and commercialize Afrezza®, an inhaled form of insulin that until now had been co-marketed with the pharma giant under an up-to-$925 million worldwide exclusive licensing agreement.

MannKind is “reviewing its strategic options for Afrezza” as a result of the termination, the company added.

The termination, disclosed by MannKind today, will take effect no later than six months or July 4.

“The parties will promptly commence transition discussions in order to effect a smooth and orderly transition in the development and commercialization of Afrezza from Sanofi to MannKind over the next 90 – 180 days,” MannKind said in a statement.

Investors responded to the termination by selling off company shares, whose value fell 41% in premarket trading on NASDAQ to 86 cents per share from yesterday’s close at $1.45 per share, before rallying to $1.10 as of 9:36 a.m.

The termination followed disappointing sales for Afrezza, which generated just €5 million ($5.4 million) in net sales during the first nine months of this year, of which €2 million ($2.2 million) came during Q3. Back in 2013, Piper Jaffray analyst Ian Somaiya had projected that Afrezza would rack up more than $2 billion in peak annual sales in U.S. and Europe.

Sanofi has counted on Afrezza and other products to rebuild a diabetes franchise weakened in 2015 by the end of U.S. patent protection for longtime but declining blockbuster Lantus. Instead in November, Sanofi launched a collaboration with Hanmi of up to €3.9 billion (about $4.2 billion) to develop long-acting diabetes treatments, followed by a partnership with Lexicon Pharmaceuticals of up to $1.7 billion to develop and commercialize the Phase III candidate sotagliflozin (LX4211).

Weaker-than-projected sales sparked three rounds of layoffs at MannKind during 2015, as well as the resignation of Hakan Edstrom as president, CEO, and director.

Effective today MannKind is now led day-to-day by Duane M. DeSisto, who holds the positions of president and CEO. DeSisto succeeds Alfred Mann, the company’s founder and executive chairman, who returned to the helm as interim CEO in November. DeSisto served as president, CEO and a director of Insulet Corp., a medical device company focused on delivering therapeutic products for diabetes patients, from 2003 to September 2014.








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