In fact, talks with the potential partner progressed to the point where the two sides were drawing up a contract, Edstrom said. He declined to name the company, but said it was a significant pharmaceutical firm with worldwide operations.

However, the two sides could not agree on the marketing potential for Afresa. MannKind projects the drug could have $2 billion in annual sales in the United States, but the potential partner set its projections lower. MannKind agreed to the lower projections, but demanded a higher cut of the revenue if Afresa exceeded them, Edstrom said.

That proved to be a roadblock neither company could clear. The two sides then agreed to postpone further negotiations until after the FDA approves the drug.

"We certainly parted as friends," said Edstrom, who added that MannKind would consider bids from multiple potential partners if Afresa is approved.

He said other potential marketing partners had approached MannKind, but that they wanted to wait for Afresa to secure FDA approval before entering negotiations. With no other immediate partners in sight, MannKind conceded it would have to wait for FDA approval.

Wall Street, which still harbors bad memories of Pfizer's Exubera flop, will likely want to see solid news from the FDA on Afresa before it buys up more MannKind stock in significant amounts, Ogg said.

"Everyone's taking a wait-and-see approach to this. If investors were going to buy it, I would advise them to use 100 percent risk-based capital because it could literally be a $2 stock again," he said.

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