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MannKind Corporation ( MNKD ) and Tolero Pharmaceuticals recently signed an exclusive global license agreement, which will enable Tolero to develop and market compounds from MannKind's novel BTK (Bruton's tyrosine kinase) program.

Terms of the Agreement

The novel BTK program is focused on the development of treatments for hematological malignancies and inflammatory diseases.

As per the agreement, MannKind could receive up to $130 million in the form of upfront as well as milestone payments for the development, approval and commercialization of the products. Apart from the upfront and milestone payments, MannKind will also get tiered royalties on product sales and a share of sub-licensing revenue.

MannKind can also re-acquire the rights to the program on the basis of specified terms until 60 days after the end of the first phase I study. If MannKind decides to take up this option, it will be responsible for the development and commercialization of the products and will be liable to pay upfront and milestone payments, royalties and other payments to Tolero as per the agreement.

Our Take

The agreement with Tolero is a positive step for MannKind. It not only provides the company with funds in the form of upfront, milestone and other payments, it also allows the company to share the risks associated with the development of pipeline candidates.

Afrezza is the lead pipeline candidate at MannKind. The company is currently conducting two clinical trials with the candidate, which should finish by year end.

We currently have a Neutral recommendation on MannKind, which carries a Zacks #3 Rank (short-run Hold rating).

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