Fujifilm has dipped into its multibillion-dollar cache of buyout cash for the $307 million it needed to acquire Cellular Dynamics International ($ICEL), one of the pioneers in the stem cell research business.
Launched back in 2004 by the renowned stem cell scientist James Thompson at the University of Wisconsin-Madison, CDI has been busy producing stem cells in large enough quantities to supply researchers who use them to test new drugs. The big idea at the company, which employs 155 in Madison and Novato, CA, was to gear up for the boom in stem cell R&D and eventually commercial-scale manufacturing. But the field has been lagging behind ambitious early projections as researchers dig in for the long haul in seeing the first stem cell therapies through trials and into the market.
For Fujifilm, which has more than $4 billion set aside for buyouts like this, the prospects proved enticing enough to spur a buyout offer that represents a 107% premium on CDI's Friday close. Late last year Fujifilm bagged Japan Tissue Engineering, adding new regenerative medicine technology to a portfolio that includes recombinant peptides.
Cellular Dynamics--a 2008 Fierce 15 company--went public in mid-2013, catching the first big wave of biotech IPOs after a lengthy drought on Wall Street. The biotech had revenue of $16.7 million last year. And the buyout may not be universally acceptable to its shareholders. Several law firms immediately started fishing for discontented investors who may be ready to fight for a bigger payback.
The deal for CDI on Monday was part of a fresh frenzy of biotech-related buyouts. Teva ($TEVA) agreed to pay $3.2 billion for Auspex and its new drug for Huntington's, while Horizon Pharma ($HZNP) acquired Hyperion. With share prices booming, buyers have been happy to pay top dollar for new acquisitions. And Fujifilm is one of many not willing to wait for values to slide back down.
"CDI has become a leader in the development and manufacture of fully functioning human cells in industrial quantities to precise specifications. CDI and Fujifilm share a common strategic vision for achieving leadership in the field of regenerative medicine. The combination of CDI's technology with Fujifilm's technologies, know-how, and resources brings us ever closer to realizing the promise of discovering better, safer medicines and developing new cell therapies based on iPSCs."
- here's the release