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Trio of University of Wisconsin spinouts merge under CDI banner

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MADISON, Wis.—Cellular Dynamics International (CDI) announced recently its merger with sister companies Stem Cell Products Inc. and iPS Cells Inc.—all of them University of Wisconsin spinouts—and the closing of an $18 million round of financing in late November. That was followed closely by the appointment of three new executives in mid-December to lead the company in its rapid growth and goal of industrializing stem cell technologies: Chris Kendrick-Parker as chief commercial officer, Emile Nuwaysir as chief operating officer and David S. Snyder as chief financial officer.

CDI was founded in 2004 by Dr. James Thomson, a pioneer in stem cell research, and Drs. Craig January, Timothy Kamp and Igor Slukvin—all professors at the University of Wisconsin–Madison. But it was the discovery of inducible pluripotent stem cells (iPS cells) in November 2007 by Thompson that really set the stage for the events at the end of 2008, says Kendrick-Parker.

"The companies had been going along their own distinct tracks up to that point, but the discovery of iPS cells really created the umbrella under which all three could be pulled together as one entity," he says.

Prior to the merger, CDI focused on reprogramming pluripotent stem cells into cardiomyocytes for use as research tools. Stem Cell Products concentrated on stem cell differentiation into multiple hematopoietic tissue types, including red blood cells, platelets, mast cells. And iPS Cells was formed to industrialize the reprogramming of human skin cells into pluripotent stem cells following the research published by Thomson.

The merged entity will continue to operate as Cellular Dynamics International Inc., and the combination of the three entities is expected to position CDI as "a leader in the stem cell research tools and personalized bio-banking industries by placing the intellectual property and commercial, research and production capabilities of the predecessor companies under a unified management team," according to CDI.

"CDI's stem-cell based tools offer an unprecedented opportunity for pharmaceutical companies to have access to cell types that were previously impossible to obtain," says Thomson. "The true value of these cell types is in their ability to enable safer drug development."

Right after the merger, CDI also closed on an $18 million Series A financing round. Tactics II Stem Cell Ventures LP led the round with participation from Tactics II Ventures LP and the Wisconsin Alumni Research Foundation (WARF).

"Closing a venture round in early October was truly remarkable," says CDI's Snyder. "Even during a major financial market downturn, business leaders in Milwaukee as well as WARF continue to provide the critical financial backing for our efforts to build a world-leading stem cell company. We are also appreciative of the support we have received from the governor and his administration. We believe that if Wisconsin can continue to attract investment in stem cell commercial infrastructure, we have the opportunity to be the major hub of the emerging stem cell industry." DDN

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