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United Therapeutics Enters into a Collaboration with MannKind

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Collaboration deal

Today, United Therapeutics (UTHR) entered into a global licensing and collaboration agreement with MannKind Corporation (MNKD) for the development and commercialization of a pulmonary hypertension product. This product is currently under investigation in clinical trials.

United Therapeutics and MannKind’s collaboration is for an investigational treprostinil dry powder that is presently in clinical trials. These trials are designed to evaluate the powder’s safety and efficacy for the treatment of individuals with pulmonary arterial hypertension (or PAH).

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According to the terms of the agreement, United Therapeutics (UTHR) is responsible for the development, regulatory activities, and commercialization of this dry powder. MannKind Corporation (MNKD) 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 $45.0 million to MannKind Corporation. MannKind would also receive milestone payments of up to $50.0 million on the achievement of its development targets. United Therapeutics is expected to pay low double-digit royalties on the net revenues from the product’s sales.

The agreement states that United Therapeutics received a choice from MannKind Corporation for expansion of this license to include other active ingredients for the treatment of PAH. MannKind is entitled to receive up to $40.0 million on the addition of each optioned product as a development milestone and option exercise. MannKind is also expected to receive low double-digit royalties on net revenues from the product.

On August 30, United Therapeutics also completed the acquisition of SteadyMed Therapeutics.

Analysts’ recommendations

Of the 12 analysts tracking United Therapeutics (UTHR) in September, two recommended a “strong buy.” Five analysts recommended a “hold” rating, four recommended a “sell,” and one analyst recommended a “strong sell.”

On September 4, United Therapeutics had a consensus 12-month target price of $124.90. This target price represents an ~5.84% return on investment over the next 12 months.

One analyst tracked MannKind Corporation in September and rated the stock as a “buy.”

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