Today shares of MannKind Corporation (MNKD) tumbled 48% after it had announced that it had terminated a collaboration agreement with Sanofi Aventis (SNY). The agreement was made back in 2014 where Sanofi had agreed to gain global rights to diabetes drug Afrezza for a total of $925 million. There was about $150 million given as an upfront milestone payment, and then a potential $775 million dependent upon certain sales milestones. 

Sanofi will work on transferring all the development and commercialization efforts over to Mannkind. This transition period is expected to last from an estimated 90 days to 180 days. Either way the termination must happen on July 4, 2016, because that is 6 months from notice given. This means at that time MannKind will have full control of Afrezza again. 

MannKind is now in the process of determining the next course of action for Afrezza. It can potentially find a new collaboration agreement with another pharma company or it could possibly outright sell the company. The fact is that the company is willing to explore all strategic options to boost shareholder value. The share price closed at $0.75 per share and it could be explored as a bounce play for a trade. However, I wouldn't recommend investing heavily in MannKind  as a long-term play. 

In addition, the departure of MannKind will put a huge burden on the share price over the next few days. Therefore, it might be prudent to wait a few days if the intention is to trade shares as a bounce play. Hopefully something can be done to improve shareholder value, but for the time being shares of MannKind will continue to drift down for quite some time.