What happened

Shares of MannKind Corporation (NASDAQ: MNKD), a manufacturer of inhaled insulin powder, jumped 66.4% higher in September, according to data from S&P Global Market Intelligence. A potentially lucrative collaboration deal with United Therapeutics (NASDAQ:UTHR) paved the way for MannKind stock to make a huge comeback.

So what 

MannKind Corporation's second-quarter earnings report made investors awfully nervous. Sales of the company's only commercial-stage product, Afrezza, hit an all-time high of $3.8 million during the three months ended in June, but the cost of goods sold during the period rang up to $5.1 million. Without any revenue to service debt or pay operating expenses, a cash balance of just $26 million at the end of June won't last long.

Businessman with jetpack following an upward sloping chart.

Image source: Getty Images.

With MannKind investors worried about bankruptcy, a surprise agreement with United Therapeutics Corporation was enough to send the stock soaring. United Therapeutics cut MannKind a $45 million check upfront and promised another $50 million if a plan to develop a dry powder version of treprostinil succeeds.

Now what

United Therapeutics will pay for development costs associated with dry powder treprostinil -- and pay MannKind double-digit royalties if the formulation ever generates any sales. United Therapeutics has been marketing treprostinil under the Remodulin, Tyvaso, and Orenitram brands for years, and the treatments are on pace to generate a combined $1.3 billion in sales this year. 

Mannkind is already ahead on this deal, and it's only going to get better from here since its partner is paying the bills. That said, now's not the time to invest in this troubled company. The deal with United Therapeutics will give the MannKind some much-needed breathing room, but it won't last long if the company keeps recording losses on every unit of Afrezza it ships out.

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