By William Horobin

PARIS--French drug company Sanofi (SAN.FR) said Monday it is pushing further into diabetes treatments by entering an agreement with U.S. biopharmaceutical company MannKind Corporation (MNKD) to develop and sell an inhaled insulin therapy, Afrezza.

The licensing agreement comes after the Food and Drug Administration in June approved Afrezza--a powder form of Insulin--to help diabetics control their blood sugar levels. Diabetes is a key growth area for Sanofi, which recorded a 16% increase in revenue from its diabetes business in the second quarter of this year.

Under the global development and commercialization agreement with Sanofi, MannKind will receive an upfront payment of $150 million and potential milestone payments of $775 million. The two companies will share profits and losses with Sanofi taking 65% and MannKind 35%.

The companies plan to launch Afrezza in the U.S. in the first quarter of 2015.

-Write to William Horobin at william.horobin@wsj.com

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