The payment for the first half of the deal -- the compounds going to Tolero -- was specified, but it's not very useful to MannKind's investors. The biotech is due $130 million for upfront and milestone payments linked to development, approval, and commercialization of the drugs in the program, but there were no details about how that might break down.
It's pretty standard for biotechs to not lay out exactly when they'll get milestone payments. About all you can hope for is that the company will separate development and regulatory milestones from sales milestones that are years away and harder to obtain. Endocyte
But biotechs usually break out how much they're getting upfront; Endocyte and Exelixis both did. And that would seem to be doubly important for a company that had just $3.2 million in cash and equivalents at the end of the year. MannKind raised about $80 million in February, so it's not in dire straits, but cash is still a big part of the story here. In the fourth quarter, MannKind burned through $20 million, and that'll increase as it completes enrollment in the additional trials the FDA wants before approving its inhaled insulin treatment Afrezza.
My guess is the upfront payment is fairly small, which is why MannKind didn't bother disclosing it. Still, superficially the deal looks like a good move to get the program off the expense sheet -- perhaps temporarily -- while it focuses on Afrezza, which has the biggest near-term potential. It just would be nice to have a bit more information to evaluate the deal.
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