CSL secures $100 million upfront in Lilly licensing deal for clazakizumab
CSL Limited (ASX: CSL) has entered an exclusive licensing agreement with Eli Lilly and Company for clazakizumab, an anti-interleukin-6 (IL-6) monoclonal antibody. Under the CSL clazakizumab Lilly licensing agreement, the company will receive an upfront payment of $100 million, with eligibility for additional clinical, regulatory and commercial milestone payments plus royalties on global net sales.
CSL retains exclusive rights to develop and commercialise clazakizumab for the prevention of cardiovascular events in patients with end-stage kidney disease (ESKD). Lilly will pursue development, regulatory approval and commercialisation of clazakizumab in additional indications beyond this core cardiovascular application.
The transaction is subject to customary closing conditions, including all applicable regulatory clearances. For CSL, the deal structure provides immediate capital while maintaining control over its primary development programme. The milestone and royalty provisions offer ongoing exposure to clazakizumab’s potential across multiple therapeutic areas without diluting existing shareholders.
ESKD patients on dialysis face significantly elevated cardiovascular risk, representing a population with substantial unmet medical need. CSL’s retention of this indication ensures the company maintains direct oversight of development in this high-priority patient group whilst capturing upside from Lilly’s exploration of the molecule in other disease areas.
What is clazakizumab and why does IL-6 matter?
Clazakizumab is a monoclonal antibody that targets interleukin-6 (IL-6), a cytokine implicated in the pathogenesis of numerous diseases. IL-6 is a mediator of diverse biological processes, including immune regulation, hematopoiesis and vascular inflammation.
The overproduction of IL-6 is associated with chronic inflammation and has been observed in a range of medical conditions. By preventing the binding of IL-6 with its receptor, clazakizumab may mitigate the cascade that contributes to the symptoms and progression of various immuno-inflammatory conditions, potentially offering therapeutic benefits to patients with these conditions.
IL-6 inhibition represents a validated therapeutic approach in immunology. Clazakizumab’s mechanism positions the molecule for potential efficacy across multiple disease states where IL-6 overproduction drives pathology. This broad applicability explains Lilly’s interest in exploring indications beyond CSL’s cardiovascular focus.
| Deal Component | CSL | Lilly |
|---|---|---|
| ESKD cardiovascular indication | Exclusive rights retained | No rights |
| Additional indications | Receives milestones + royalties | Exclusive development/commercialisation |
| Upfront payment | Receives $100 million | Pays $100 million |
The deal structure allows CSL to focus resources on its core cardiovascular development programme whilst retaining financial exposure to clazakizumab’s success in other therapeutic areas. Lilly gains access to a molecule with established mechanism of action and potential applicability across multiple immuno-inflammatory conditions.
CSL advances Phase 3 trial in end-stage kidney disease
CSL is advancing the ongoing POSIBIL6ESKD Phase 3 clinical trial (NCT05485961), which evaluates the efficacy and safety of clazakizumab in patients with ESKD on dialysis at risk for major cardiovascular events. The trial specifically targets prevention of cardiovascular events in this high-risk population.
CSL acquired clazakizumab through its 2020 purchase of Vitaeris Inc. The molecule was developed by Vitaeris before being integrated into CSL’s development pipeline. The current Phase 3 programme represents the culmination of several years of development work since the acquisition.
ESKD patients on dialysis experience substantially elevated cardiovascular risk compared to the general population. Current treatment options for this patient group remain limited, creating significant unmet medical need. A successful Phase 3 outcome could establish clazakizumab as a treatment option in a population where cardiovascular events represent a leading cause of mortality.
The trial’s focus on major cardiovascular event prevention aligns with CSL’s broader strategic emphasis on cardiovascular health. By retaining exclusive rights to this indication under the Lilly agreement, CSL maintains direct control over the molecule’s development in what the company has identified as its priority therapeutic area.
Management commentary
Bill Mezzanotte, EVP and Head of Research and Development, CSL
“This agreement marks a significant step forward in our mission to bring innovative therapies to patients worldwide. Clazakizumab is a promising therapeutic candidate with the potential to significantly impact the treatment landscape for various immuno-inflammatory and cardiovascular conditions. Lilly is another patient-focused organization, and we look forward to working with them to maximise the potential of this important medicine.”
Strategic rationale and investment thesis
The CSL clazakizumab Lilly licensing agreement represents a strategic approach to asset monetisation whilst retaining control over core development priorities. CSL focuses resources on its cardiovascular programme in ESKD whilst capturing upside from Lilly’s exploration of additional indications through milestone payments and royalties.
The partnership with a major pharmaceutical company validates clazakizumab’s therapeutic potential across multiple disease areas. Lilly’s willingness to pay $100 million upfront plus commit to milestone and royalty payments reflects confidence in the molecule’s commercial prospects beyond the cardiovascular indication CSL is pursuing.
The milestone and royalty structure provides non-dilutive financing. CSL receives immediate capital through the upfront payment whilst maintaining exposure to future development success without issuing equity. This approach allows the company to fund ongoing operations whilst preserving shareholder value.
Key strategic benefits of the transaction include:
- Immediate $100 million cash injection to support ongoing operations
- Retained exclusive control over cardiovascular development in ESKD patients
- Financial exposure to upside from Lilly’s development in additional indications through milestones and royalties
- Partnership validation of clazakizumab’s potential across multiple therapeutic areas
- Non-dilutive financing structure preserving existing shareholder equity
The transaction remains subject to customary closing conditions, including regulatory clearances. Completion of these conditions will be required before the upfront payment is received and the partnership formally commences.
For investors, the deal demonstrates CSL’s ability to extract value from its development pipeline whilst maintaining strategic focus. The company secures capital to advance its priority cardiovascular programme whilst retaining optionality on clazakizumab’s broader potential through the Lilly partnership structure. Success in either the POSIBIL6ESKD trial or Lilly’s development programmes would generate additional value for CSL shareholders through the retained cardiovascular rights or milestone and royalty payments respectively.
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