MannKind Corp. is teaming up with the French pharmaceutical giant Sanofi to help develop and sell its first product to hit the market, the inhaled insulin Afrezza.
Shares of Mannkind surged 26 percent before the opening bell Monday on news of the partnership, which could be worth more than $925 million.
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MannKind will receive $150 million upfront and then potential milestone payments of up to $775 million, depending on whether certain regulatory, development and sales targets are met. MannKind will make the supply of Afrezza, and Sanofi will be responsible for global commercial, regulatory and development activities.
The companies said they will share any profits or losses, with Sanofi taking 65 percent and MannKind receiving 35 percent.
They plan to launch Afrezza in in the U.S. early next year.
Afrezza, an insulin powder, comes in a single-use cartridge and is designed to be inhaled at the start of a meal or within 20 minutes.
The Food and Drug Administration approved Afrezza in June, more than three years after the agency first asked MannKind to begin additional clinical studies.
The FDA said Afrezza is not a substitute for long-acting insulin and is a new option for controlling insulin levels during meals. The agency approved Afrezza with a strong warning indicating that the drug should not be used by people with chronic lung diseases.
Diabetes is a chronic condition in which the body either does not make enough insulin to break down the sugar in foods or uses insulin inefficiently. It can lead to blindness, strokes, heart disease or death. Demand for diabetes treatments is surging globally as the prevalence of obesity explodes, but several other drugmakers have failed to make inhaled insulin work commercially.
Shares of MannKind, based in Valencia, California, jumped $2.12 , to $10.25 in premarket trading, while U.S.-traded shares of Sanofi slipped 28 cents to $52.04.