Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of MannKind (NASDAQ:MNKD), a biopharmaceutical company focused on developing inhalable therapies to treat diabetes, surged by as much as 32% after announcing a global licensing agreement with Sanofi (NASDAQ:SNY) for its newly approved inhalable diabetes drug, Afrezza. Shares have since cooled dramatically and are now up a little over 6%.

Source: MannKind.

So what: According to the company's early morning press release, Sanofi will be responsible for all commercial, regulatory and development activities, while MannKind will handle the manufacturing of the drug, under a separate agreement. In the interim, both companies will collaborate on how to best expand manufacturing capacity beyond just MannKind's Danbury, Conn., facility. The two plan to launch Afrezza in the first quarter of 2015.

Under the financial terms of the deal MannKind will receive $150 million upfront, which will help stem cash burn concerns by investors, and is eligible to receive another $775 million in milestone payments. Perhaps more importantly for the long term, Sanofi will retain 65% of all profits and losses with MannKind receiving the remaining 35%. Sanofi is also advancing MannKind $175 million in collaboration expenses.

Now what: I believe the phrase that was collectively uttered when MannKind shareholders read this news was "About time!" MannKind had been getting dangerously low on cash, but everyone sort of knew that a deal was around the corner with Afrezza now approved.

The real test now comes with the launch and the price of the inhalable insulin product compared to existing type 1 and type 2 diabetes therapies. From a factor of convenience there is no comparable product, therefore Afrezza has a step up on the competition in that respect. But, how quickly insurers and physicians jump on board remains to be seen. Having Sanofi in its corner is a definite step in the right direction, but I'd rather hold off and wait for concrete earnings growth and a discernable move toward profitability rather than risk being caught up in a drug that could just as easily stumble out of the gate.

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