France-based Sanofi and US-based MannKind have signed an exclusive licensing agreement to develop and commercialise Afrezza (insulin human) inhalation powder.

Afrezza is a new rapid-acting inhaled insulin therapy developed to treat adults with type I and type II diabetes.

As part of the deal, both firms plan to introduce Afrezza in the US in the first quarter of 2015.

Sanofi will undertake global commercial, regulatory and development activities of Afrezza, while MannKind will manufacture Afrezza at its production facility in Danbury, Connecticut, US under a separate supply agreement.

The firms are also planning to collaborate to expand their manufacturing capacity to meet global demand.

"Afrezza is an innovative drug-device combination product consisting of a dry formulation of human insulin delivered through a small, discreet inhaler."

Based on the terms of the agreement, MannKind will receive an upfront payment of $150m and potential milestone payments of up to $775m.

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The milestone payments will be dependent on specific regulatory and development targets and sales thresholds.

Sanofi has agreed to provide its share of the collaboration’s expenses up to a limit of $175m to MannKind.

Sanofi diabetes division senior vice-president Pierre Chancel said: "Afrezza is an innovative drug-device combination product consisting of a dry formulation of human insulin delivered through a small, discreet inhaler.

"Afrezza is a further addition to our growing portfolio of integrated diabetes solutions. It is uniquely positioned to provide patients with another insulin therapy option to manage their diabetes but does not require multiple daily injections."

The transaction is subject to customary Hart-Scott-Rodino approval and completion of financing documentation.

Greenhill & Co served as exclusive financial advisor to MannKind during this transaction.