MannKind (MNKD) Enters $200M Royalty Purchase Agreement with Sagard Healthcare
MannKind Corporation (Nasdaq: MNKD) has recently announced a significant deal with Sagard Healthcare, wherein it has sold a 1% royalty in net sales of Tyvaso DPI® (treprostinil) inhalation powder for up to $200 million. The agreement includes a purchase price of $150 million and the potential for an additional milestone payment of up to $50 million.
Under the agreement, Sagard Healthcare will receive royalty payments equal to 1% of the net sales of Tyvaso DPI that occur between October 1, 2023, and December 31, 2042, while MannKind will retain a 9% royalty. This partnership provides MannKind with a substantial financial boost while allowing Sagard Healthcare to benefit from the success of Tyvaso DPI.
Tyvaso DPI, which was licensed by United Therapeutics Corporation from MannKind in 2018, has been marketed since June 2022 for the treatment of pulmonary arterial hypertension and pulmonary hypertension associated with interstitial lung disease following approval from the U.S. FDA. As part of the licensing agreement, MannKind is already entitled to a 10% royalty on Tyvaso DPI’s net sales, subject to certain reductions.
The sale of this 1% royalty in Tyvaso DPI to Sagard Healthcare further solidifies MannKind’s financial position and opens up new opportunities for growth. This move comes as MannKind continues to explore strategic arrangements to strengthen its position in the pharmaceutical industry.
We are pleased to enter into this royalty purchase agreement with Sagard Healthcare, said Michael Castagna, CEO of MannKind. This transaction allows us to unlock immediate value from our royalty interest in Tyvaso DPI while retaining a majority stake in the ongoing commercial success of the product. We believe this agreement will enhance our financial flexibility and support our strategic initiatives moving forward.
The transaction was facilitated by Morgan Stanley & Co. LLC, serving as the sole structuring agent. Legal representation was provided by Cooley LLP for MannKind and Sidley Austin LLP for Sagard Healthcare.
To discuss this significant transaction, MannKind will be hosting a conference call and presentation webcast on January 3, 2024, at 9:00 a.m. Eastern Time. The call will be accessible via the company’s website at mannkindcorp.com under Events & Presentations. A replay of the call will also be available on the website for 14 days.
This latest development is sure to raise interest among investors and industry observers as MannKind secures a substantial cash infusion through its royalty purchase agreement with Sagard Healthcare. As the company’s prospects continue to evolve, it will be intriguing to see how this deal propels MannKind’s growth in the competitive pharmaceutical landscape.
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