MannKind Corp. (MNKD)

[JLS]

Sanofi thinking out loud:

If Afrezza succeeds, the gain from that offsets the drawdown of Sanofi's other products. Net-net: near-term zero for Sanofi because they have other diabetes products; negative for MannKind because they do not have sales of other products to offset losses.

If Afrezza fails, there is no drawdown of Sanofi's other products. Net-net: same as above.

Either way, Sanofi obtains rights to technoshpere while protecting their profits. The potential payoff there is two to three years down the road after other products are developed using technoshpere. Meanwhile, MannKind merely survives until they develop and receive approval of other products.

Why SNY bought into MNKD: It's the perfect hedge -- it protects their market share of diabetes drugs while giving them access to future products; and unlike other hedges, there is no expiration date, and all the pressure is on MannKind.

The question is: is it wise to be a long-term share holder of a company that merely survives for a few more years while developing other products and awaiting FDA approval? How is that not the definition of dead money?