Japan's Fujifilm, which snapped up a Texas vaccine manufacturer late last year, is ready to do another U.S. deal. It says it will pay more than $300 million for a Wisconsin company which has a platform for large-scale human cell production, including a kind of stem cells being used in some promising drug research.
Tokyo-based Fujifilm said it is offering $106 a share for Cellular Dynamics International (CDI). The all-cash deal is expected to be completed in the second quarter of 2015. Founded in 2004 in Madison, WI, the company also has operations in Novato, CA, and has about 155 employees. The company went public in 2013 and had revenues of $16.7 million last year, but has had ongoing losses, include a loss of $30.6 million in 2014. In its 10-K filing with the SEC, the company said it had a $137.6 million accumulated deficit at the end of last year.
CDI's technology platform can produce industrial-scale quantities of human cells, including induced pluripotent stem cells (iPSCs), which have the ability to self-renew and become any cell type in the body. It has 12 cell lines and said its products are used for drug discovery and screening, to test the safety and efficacy of their small molecule and biologic drug candidates, for stem cell banking, and in the research and development of cellular therapeutics. Its technology platform is being used by the California Institute for Regenerative Medicine to establish disease-related iPS cell banks.
"We are delighted to be able to pursue the business from drug discovery to regenerative medicine with CDI, which develops and manufactures iPS cells," Fujifilm CEO Shigetaka Komori said in a statement. He said Fujifilm would be able to look for some cost savings by combining CDI's operations with Fujifilm's own work in regenerative medicine. "We have optimal scaffolding material, 'recombinant peptides,' for cell generation and technologies useful for regenerative medicines such as material science and engineering."
Fujifilm is pursuing some of its own drug development in addition to offering services to the industry, but it is not the only contract manufacturing operation to follow the stem cell path. CMO Lonza launched its Pluripotent Stem Cell Innovation Center a few years ago to offer stem cell production services. In 2013 it snagged a three-year, $6.9 million contract to provide stem cells for research to the National Institutes of Health Center for Regenerative Medicine.
This is the second significant buy for Fujifilm in the U.S. in recent months. In December, the Japanese company completed a deal with the Texas A&M University System for a 49% stake in vaccine specialist Kalon Biotherapeutics and said it may buy the rest of Kalon in the future. Kalon is working with the university and with GlaxoSmithKline ($GSK) on a new $91 million, government-backed vaccine plant in College Station, TX.
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