MannKind Corp. (NASDAQ: MNKD) was supposed to be a huge winner on this week’s news that Sanofi (NYSE: SNY) will become its global partner for its inhalable insulin Afrezza. There has been just one small, or potentially massive, problem — investors don’t like the deal. Is it possible that MannKind isn’t getting anywhere close to enough in the partnership?

This story has been updated below due to things getting even worse!

As of Friday, August 15, this stock had lost money each day since the deal was announced (see below).

The MannKind-Sanofi partnership is an exclusive global licensing pact for the development and commercialization of Afrezza for adults with type 1 and type 2 diabetes. The two companies plan to launch Afrezza in the United States in the first quarter of 2015. When we first covered the FDA approval, the assumption was that major revenues would not be coming until 2015, but now it seems as though there will be no revenues to speak of at all until then.

The Thomson Reuters consensus revenue estimates targets are only $27.5 million in 2014 and still only $78 million in 2015. Estimates, however, are all over the place, with the highest one at $100 million for 2014 and $277 million for 2015.

So, what is Sanofi getting that has turned MannKind investors off?

Sanofi assumes the responsibility for the commercial, regulatory and development activities of the inhalable insulin product. MannKind will manufacture Afrezza at its manufacturing facility in Danbury, Connecticut. Where things get a bit more complicated is in how the two companies will collaborate to expand the manufacturing capacity to meet the global demand for Afrezza as necessary.

Afrezza is supposed to be a blockbuster drug with more than $1 billion in sales ultimately. After all, billions of dollars are spent on insulin each year, and this is the most non-invasive delivery available to diabetics.

MannKind gets an upfront payment of $150 million from Sanofi. It is also set to receive milestone payments of up to $775 million, but those milestone payments are dependent upon specific regulatory and development targets, and then they are dependent upon sales thresholds. In short, the devil is in the details.

What seems to be the big kicker here is the split in profits. Sanofi will retain 65% of the profits, and MannKind will receive 35% of the profits, and they will share on that basis in the losses as well. The agreement also shows that Sanofi agreed to advance to MannKind its share of the collaboration’s expenses with a maximum limit of $175 million.

Our own reader poll of almost 2,000 responses suggested that MannKind shares would rise to above $15 in 2015, but that was in the immediate period after the FDA approval. MannKind shares were at $8.13 before the Sanofi deal was announced. The stock popped up to just above $10 on the news report on Monday, but the shares pulled back and closed at only $8.53 on Monday on trading volume of well more than 60 million shares. Then the stock fell to $7.48 on Tuesday, with 44 million shares changing hands that day.

UPDATE as of August 16: MannKind shares may have gapped higher and technically closed higher on Monday, but when you see how the stock traded then and since it should be considered a loss. On Monday August 11 the stock gapped up to as much as $10.08, but then it closed at $8.53 – on a whopping 62.5 million shares. The daily closes since have been $7.48, then $7.47, then $7.05 – only to close on Friday, August 15 at $6.86.

UPDATE as of August 14: Wednesday brought a $7.47 close for not much change, but Thursday brought on a 5.6% drop to $7.05 on the day. Things are getting worse rather than better.

The market is clearly forecasting that MannKind is not maximizing its potential in this deal. As of the end of March, MannKind had accumulated net loss carryforwards that has reached a total of almost $2.35 billion.

The market’s verdict is twofold. There seems to be a fear that maybe the inhalable insulin product will not be as huge a hit as once hoped. The other concern is that MannKind isn’t getting enough in the deal when you consider how long and costly the saga of getting Afrezza approved was.

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