CSL Ltd (ASX: CSL) shares are underperforming on Tuesday morning.
At the time of writing, the biotechnology giant's shares are down 0.5% to $203.12.
As a comparison, the S&P/ASX 200 index is up 0.35% at the time of writing.
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What's going on with CSL shares?
Investors have been selling the company's shares this morning despite the release of a big announcement.
According to the release, CSL has entered into an agreement with privately held Dutch biotech company, VarmX, to develop a new treatment to restore blood coagulation in patients taking an FXa inhibitor.
The company highlights that more than 20 million patients globally take FXa inhibitors as chronic anticoagulation therapy, with approximately 3% of these patients experiencing severe bleeding or requiring urgent surgery.
VarmX's asset, VMX-C001, is a potentially first-in-class recombinant Factor X protein administered as a rapid single-dose. It is intended to bypass FXa anticoagulation activity and restore coagulation in patients experiencing severe bleeding or requiring urgent surgery.
Commenting on the agreement with VarmX, CSL's chief executive officer, Paul McKenzie, said:
CSL has a long history of working in hematology and bleeding disorders and partnering with VarmX strengthens our strategic ambition to deliver enduring patient impact. This new treatment will potentially address a clear and significant unmet medical need in a well-defined and growing patient population. It also fits with our strategy of seeking more external partners to help accelerate our clinical and commercial pipeline through investments in validated, clinical-stage opportunities.
The preclinical and early clinical data are also very encouraging and led to the U.S Food and Drug Administration (FDA) granting Fast Track Designation, recognising VMX-C001's potential to address a critical unmet medical need.
Potential future acquisition
Under the terms of the collaboration agreement, CSL will fund VarmX's global Phase 3 trial evaluating VMX-C001 in patients taking Factor Xa inhibitors. It will also support late-stage product development, manufacturing and pre-launch commercial and medical affairs activities.
In addition, CSL revealed that it will make an upfront payment to VarmX of US$117 million for an exclusive option to acquire the company upon receipt of the Phase 3 data.
Subject to the exercise of the option and certain milestones and regulatory clearances being reached, VarmX will receive payments of up to US$388 million up to the launch of VMX-C001, plus further commercial milestones thereafter.
If everything goes to plan for CSL and VarmX, a commercial launch for VMX-C001 is anticipated in 2029.
