What do you do when you have more stuff than you have room for? You hold a garage sale. That appears to be the situation that biotech MannKind (NASDAQ:MNKD) finds itself in these days.

Some pharmaceutical companies boast pipelines with dozens of drugs. Pfizer (NYSE:PFE), for example, has 78 drugs in its pipeline, with 25 of those either in late-stage studies or regulatory review. Of course, Pfizer also sits on more than $25 billion in cash, with $62 billion in revenue over the past year.

To be blunt, MannKind ain't Pfizer. MannKind had the grand sum of 2.12 million in cash, equivalents, and short-term investments on its third-quarter balance sheet (although the company subsequently netted $86 million on a secondary offering). Its revenue over the past 12 months is $35,000. The company is preparing for what it hopes to be the third and final NDA submission for its inhalable insulin Afrezza next year. While MannKind's recent share offering and credit line provide enough funds to move forward, the company will either live or die based on what happens with Afrezza. 

MannKind's garage sale
While MannKind's hopes are pinned on Afrezza, the company does have more products in its pipeline. One is its MKC1106 cancer immunotherapy drug. The drug showed promise in early-stage testing and advanced to a phase 2 study.

However, MannKind doesn't have room from a resource standpoint to handle anything other than Afrezza. The company halted development on most other programs to focus primarily on its inhalable insulin program. That's where the garage sale comes into play.

MannKind announced on Nov. 13 that it inked a deal with privately held Colby Pharmaceutical. Colby will gain exclusive global rights to MKC1106. In return, MannKind will receive an upfront payment and potential milestone payments that could total $140 million. MannKind will also receive tiered royalties if MKC1106 makes its way to market. 

This isn't the first item to be sold from the garage. In April, MannKind announced an agreement to license its Bruton's tyrosine kinase program to Tolero Pharmaceuticals. That arrangement could ultimately generate up to $130 million in upfront and milestone payments. 

The potential exists for more deals. MannKind thinks that its Technosphere technology could be used to more effectively deliver other drugs that currently require injections. 

Good moves
By no means am I disparaging MannKind's actions in comparing the licensing arrangements to a garage sale. On the contrary, I think these are good moves for the company.

Eli Lilly (NYSE:LLY) and Novo Nordisk (NYSE:NVO) both abandoned inhalable insulin products while still in testing because of commercial viability concerns. Pfizer made it to market with Exubera, but it flopped because customers didn't want the product.

Afrezza shows great promise in achieving the success that eluded these earlier products, but MannKind must make it to the finish line to claim that promise. Every dollar counts in enduring the next year or so until the Food and Drug Administration decides on approval for the drug. If a garage sale helps MannKind get there, that sounds good to me.

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