On Thursday Mannkind (MNKD) announced that it had entered into a license agreement with a newly formed entity known as Receptor Life Sciences Inc. This collaboration deals with the ability for both companies to generate inhaled therapeutic products that target a variety of diseases. Such diseases being targeted are: neurological diseases, inflammatory disorders, and chronic pain. 

The technology that is being used is Mannkind’s Technosphere platform. This form of technology utilizes dry powder that can be inhaled to treat a set of diseases. This technology allows local and systemic delivery without the use of needles, which is a nice advantage to have over other products. Mannkind will be responsible for performing initial studies and then work with Receptor to reach a final product to be tested for clinical use. 

This is a good deal for Mannkind, because they are transferring all development and commercialization rights to Receptor. In addition, Mannkind will have the potential to earn $102.25 million on clinical milestone payments. If the products end up on the market Mannkind would also receive double digit royalties on net sales. 

Investors are not too enthusiastic about the deal, as the day it was announced, the share price closed down by 6%. It seems investors were looking for a better deal with the technology Mannkind has. The fact that the newly formed entity isn’t well known is leaving a lot of investors scratching their heads. Until more is known about this partnership, and new details emerge it is probably best to steer clear of Mannkind for the time being.