Investors have waited for a long time for MannKind (MNKD -1.37%) to get a partner. As the development of its inhaled insulin product, Afrezza, has dragged on, it seems a partner is always just around the corner.

Today, the company finally announced a partnership... just not for Afrezza.

Instead, the deal was for one of MannKind's early-stage cancer programs. MKC1106 is an immunotherapy platform with the same base technology designed to treat different types of cancer. MannKind is developing different MKC1106 antigens for melanoma, prostate, blood, and other human cancers. Melanoma is furthest along, having completed a phase 1 program.

MannKind traded the program to privately held Colby Pharmaceutical for about $140 million in upfront and potential milestone payments. The biotechs didn't break out how the payments are divided, but investors should assume only a small fraction will come in the upfront portion. MannKind will also receive tiered royalties on drugs developed out of the program.

MannKind's technology is a little simpler than Dendreon's (NASDAQ: DNDN) immunotherapy Provenge, which pulls immune cells out of the patient, activates them to attack the cancer, and then infuses them back into the patient. For MKC1106, the DNA and peptide reagents that stimulate the immune response are injected directly into the patients' lymph nodes where immune cells hang out.

In theory, the lymph node injections should give a better immune response than injecting into the muscle like you'd get with a typical vaccination for a pathogen. The problem with cancer immunotherapy has always been convincing the immune system to attack something that is technically part of the body (even if the tumor cells are growing out of control).

Considering the small payment, it looks like pawning the MKC1106 program was more about conserving cash than creating more of it. By partnering the program, MannKind gets to keep some financial interest in the program without cutting into its own cash. Colby looks like a good partner since it already has some immunotherapy products in development that might be used as in combination with MKC1106.

For MannKind and its investors, it's back to focusing on Afrezza. Phase 3 data for the new inhaled insulin device should be due out next year, but the trials are widely expected to come back positive. A partnership from Eli Lilly (LLY -3.38%), Novo Nordisk (NVO -2.06%), Sanofi (SNY 1.45%), or one of the other big diabetes players would be a much bigger catalyst that should send shares considerably higher, especially given how long investors have waited.