With Roche Deal, Cellular Dynamics Wades Deeper Into Drug Discovery

Xconomy Wisconsin — 

Cellular Dynamics International has long touted the potential for its manufactured human stem cells to help researchers identify and formulate new drugs.

It got a strong endorsement from Swiss pharma giant Roche on Tuesday with a deal worth up to $83 million that Cellular Dynamics says is its largest partnership to date.

The Madison, WI-based biotech, known as CDI, develops induced pluripotent stem cell lines, which customers have so far used primarily to gauge the toxicity and safety of drug candidates. The new agreement gives Roche exclusive access to supplies of the cell products, which Roche will use to identify new drug candidates, says CDI executive vice president Chris Parker.

It’s the company’s first announced supply agreement since Tokyo-based Fujifilm acquired CDI for $307 million in March. Parker says Tuesday’s agreement represents a continuation of CDI’s planning prior to the buyout.

“It’s been part of our strategy all along to expand our breadth and to enter new markets and applications,” Parker says. “We’ve tried to demonstrate how our cells can be employed in not only safety testing, but in the drug discovery process, and it’s clear that’s getting traction.”

Parker would not disclose how long the Roche agreement is expected to last. “It’s as short as we could make it because there’s exclusivity associated with it,” he says.

The agreement requires the two companies to meet certain development milestones. Parker would not share specific terms, but he says the conditions are intended to “show that a drug that’s in the discovery process is moving forward in the pipeline.” That means progressing from drug candidate screening to filings with the FDA to clinical trials, he says.

Induced pluripotent stem cells can be developed into virtually any type of cell found in the human body. They can be produced from a skin or blood sample.

CDI previously worked with Roche’s safety division about five years ago to develop cardiac muscle cells, Parker says.

“This is just a continuation and an expansion of the overall use of our products throughout the pipeline within the Roche drug discovery environment,” he says.

Parker says CDI isn’t planning to do any mass hiring as a direct result of the Roche agreement, but expects to add about 20 employees by March. The company has more than 150 employees, who work out of its Madison headquarters and offices in Novato, CA, where it helped build out a stem cell bank CDI has claimed is the largest in the world.