MannKind Corp. announced on Tuesday that it has signed a licensing deal worth some $140 million that allows a San Jose company to take over development and production of a novel cancer treatment.

The Valencia biotech has given Colby Pharmaceutical Co. rights to MKC1106, a “platform” drug that could potentially be used to treat multiple cancers, including those of the blood, prostate and skin. MannKind completed successful Phase I trials and began Phase II trials in late 2010.

As part of the deal, Colby will pay MannKind upfront and milestone payments totaling about $140 million, linked to the treatment’s development, approval and commercialization. MannKind also will receive royalties on sales of the product if it makes it to market.

Colby has its own drug under development, an oral cancer treatment that has yet to be tested on humans. The MannKind drug could potentially be used in tandem with Colby’s.

“We are very keen on this opportunity and in continuing to work with the experienced drug development team at MannKind,” said David Zarling, chief executive of Colby, in a statement.

MannKind’s drug works by injecting cancer antigens directly into the lymph nodes, a new approach that is intended to stimulate production of cancer-fighting white blood cells.

This is the second licensing deal this year for MannKind, which has been short on cash as it has sought to bring its primary pipeline product, Afrezza, to market. The drug is a rapid-acting form of inhaled insulin, and the Food and Drug Administration has sought more testing.

In April, the company licensed rights to a group of experimental drugs to Salt Lake City company Tolero Pharmaceuticals Inc. in a deal worth a reported $130 million.

Shares of MannKind were up 1 cent, or less than one percent, to $1.99 in midday trading on the Nasdaq.

Kelly Goff