MannKind Corporation (NASDAQ: MNKD) is having an incredibly strong start to the trading session this morning, and for good reason. According to various reports, the company has entered into an agreement with United Therapeutics that’s valued at $95 million. Today, we’ll talk about:
- The agreement;
- what we’re seeing from MNKD as a result; and
- what we’ll be watching for ahead.
MNKD Enteres $95 million Agreement
As mentioned above, MannKind corporation is having an incredibly strong start to the trading session this morning after announcing that it has entered into an agreement. In various reports, news is breaking that MNKD and United Therapeutics (UTHR) have entered into a development, manufacture and commercialization agreement surrounding a new treatment for pulmonary arterial hypertension. If all goes well, the new treatment will be delivered through an inhaler using the company’s proprietary technosphere technology.
According to the agreement, the two companies will work together on the development, regulatory approval, and commercialization of the new treatment. The treatment will include dry powder inhalation delivery of treprostinil, the active ingredient in the flagship product at UTHR, Remodulin.
Under the terms of the agreement, MNKD will receive an upfront payment in the amount of $45 million. From there, the company will be eligible for potential payments up to $50 dependent on development, regulatory and commercial milestones. Also, the company will be eligible for low double-digit royalties on net sales of the product, should it be approved.
Finally, should all go well, this could lead to more good neas. The company also granted United Therapeutics the option to expand the license to include other active ingredients for the treatment of pulmonary hypertension. Should thi soption be taken advantage of, the company will receive an additional $40 million payment per license and an additional $10 million immediately to assist in the cost of research on behalf of UTHR for products outside of the scope of the currnet licensing and collaboration agreement.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of MNKD, the news proved to be overwhelmingly positive. After all, this license agreement will not only drive substantial revenue on an immediate basis, it has the potential to produce tens of millions, or even hundreds of millions of dollars for the company down the road. So, it’s not surprising to see that excited investors are sending the stock screaming for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:25), MNKD is trading at $1.57 per share after a gain of $0.47 per share or 42.74% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on MNKD. In particular, we’re interested in following this agreement as it has the potential to produduce serious revenue for the company. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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