MannKind Corp. (NASDAQ: MNKD) shares continued their rally from Tuesday when it was announced that United Therapeutics Corp. (NASDAQ: UTHR) was licensing from MannKind a dry powder formulation of treprostinil, the active ingredient in Remodulin.
This collaboration is in an effort to treat pulmonary arterial hypertension.
Under the terms of the agreement, United Therapeutics is responsible for the development, regulatory activities and commercialization, while MannKind is expected to be responsible for the manufacturing of clinical supplies and preliminary commercial supplies.
United Therapeutics is expected to make an upfront payment of $45 million to MannKind, and MannKind would be eligible to receive milestone payments of up to $50 million for achieving development targets. Also, United Therapeutics is expected to pay low double-digit royalties on the product sales.
Additionally, MannKind granted United Therapeutics an option to expand the license to include other active ingredients for the treatment of pulmonary hypertension. Each optioned product would be subject to the payment to MannKind of up to $40 million in additional option exercise and development milestone payments, as well as a low double-digit royalty on net sales of any such product.
In the most recent short interest report, MannKind had 28.61 million shares short with 8.5 days to cover.
In Tuesday’s session, MannKind shares posted a gain of roughly 89% on over 50 million shares traded.
Shares of MannKind were last seen up about 44% at $3.00 on Wednesday, with a consensus analyst price target of $4.00 and a 52-week trading range of $0.98 to $6.96.
Shares of United Therapeutics were up about 1% at $120.50, with a 52-week range of $100.57 to $152.55.