MannKind Corp. on Monday announced that it is licensing a portfolio of early-stage experimental drugs to Tolero Pharmaceuticals Inc. in a deal that could be worth more than $130 million.
The companies said the drug candidates are being studied as treatments for blood cancers and inflammatory diseases. Tolero, a Salt Lake City developer of cancer and other drugs, will have worldwide rights to develop the drugs. The deal provides a means for cash-strapped MannKind of Valencia to develop other drugs in its pipeline, while it concentrates on getting U.S. regulatory approval for its main drug candidate, the inhalable insulin treatment Afrezza.
Tolero will make upfront and milestone payments to MannKind as the drugs advance through clinical development and regulatory review and, if approved, reach sales targets. MannKind also would receive licensing payments and royalties.
MannKind does have the right to reacquire the drugs after early-stage clinical testing is finished. If MannKind exercises that option, it would assume responsibility for developing and commercializing product and Tolero would be eligible to receive milestone payments, royalties and sublicensing revenues.
"We believe that MannKind has developed a series of novel compounds with unique mechanisms of action that may lead to important treatments for cancer and autoimmune diseases, such as rheumatoid arthritis,” said Dr. David Bearss, Tolero’s founder, in a statement. “We are excited to be a strategic partner with MannKind."
Approval for Afrezza was delayed last year when the U.S. Food & Drug Administration asked for more tests on a revamped inhaler. The company expects to be able to submit study results early next year. MannKind, which significantly cut staff last year to save money, earlier this year announced plans to sell $50 million in stock and obtain $161 million in debt to help carry it through this year.
Shares were down 4 cents, or 1.8 percent, to $2.20 in midday trading on the Nasdaq.