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Item 1.01
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Entry into a Material Definitive Agreement.
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On November 9, 2016 (the “Effective Date”),
MannKind Corporation (the “Company”), Technosphere International C.V. (“TICV”) and MannKind Netherlands B.V. (“BV” and together with the Company, TICV and their respective affiliates, the “MannKind Entities”)
entered into a settlement agreement (the “Settlement Agreement”) with sanofi-aventis U.S. LLC (“Sanofi”, together with its affiliates, the “Sanofi Entities”).
Under the terms of the Settlement Agreement, Sanofi has agreed to purchase $10.2 million of insulin from the Company by December 3, 2016 under the insulin put
option (the “Insulin Put Option”) pursuant to the Supply Agreement (the “Supply Agreement”), dated August 11, 2014, by and between the Company and Sanofi, as assignee of Sanofi-Aventis Deutschland GmbH (“Sanofi
GmbH”). In addition, Sanofi has agreed to make a cash payment of $30.6 million to the Company within 60 days after the Effective Date as acceleration and in replacement of all other payments that Sanofi would otherwise have been required
to make in the future pursuant to the Insulin Put Option, without the Company being required to deliver any insulin for such payment. The Company has also been relieved of its obligation to pay Sanofi $0.5 million in previously uncharged costs
pursuant to the License and Collaboration Agreement (the “License and Collaboration Agreement”), dated August 11, 2014, by and among the Company, Sanofi GmbH, BV and TICV.
Pursuant to the Settlement Agreement, the MannKind Entities and the Sanofi Entities agreed to a general release of potential claims against each other arising
or accruing prior to or as of the Effective Date in connection with the License and Collaboration Agreement, the Supply Agreement or the Transition Agreement (the “Transition Agreement”), dated April 4, 2016, by and between the Company and
Sanofi, except for future obligations and deliverables under the Transition Agreement that have not yet been performed.
On November 9, 2016, the Company
entered into an amendment (the “Amendment”) to the Supply Agreement (the “Amphastar Agreement”), dated July 31, 2014, by and between the Company and Amphastar Pharmaceuticals, Inc. (“Amphastar”). Pursuant to the
Amendment, the term of the Amphastar Agreement was extended from December 1, 2019 to December 31, 2023. In addition, the delivery schedule was modified to provide that Amphastar will ship €2.7 million of insulin to the Company in the
fourth quarter of 2017, €8.9 million in 2018, €11.6 million in 2019, €15.5 million in 2020 and in 2021, and €19.4 million in 2022 and in 2023. The Company also granted Amphastar a right of first refusal to participate in the
development and commercialization of Afrezza in China through a potential business collaboration.
The foregoing description is only a summary of the
Settlement Agreement and the Amendment and is qualified in its entirety by the terms of the Settlement Agreement and the Amendment, copies of which will be filed as exhibits to our Annual Report on Form 10-K for the year ended December 31,
2016.
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Item 1.02
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Termination of a Material Definitive Agreement.
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On November 9, 2016, in connection with the Settlement
Agreement, the Company and Aventisub LLC, an affiliate of Sanofi, agreed to terminate the Senior Secured Revolving Promissory Note, dated as of September 23, 2014, by and between the Company and Aventisub LLC, and the Guaranty and Security
Agreement, dated as of September 23, 2014, by and among the Company, MannKind LLC and Aventisub LLC. In connection with such termination, Aventisub LLC agreed to forgive the full outstanding loan balance on the Senior Secured Revolving
Promissory Note of $71.6 million owed by the Company and agreed to release its security interests encumbering the Company’s assets.