Profitability in a $50 Billion Market: Fujifilm Projections and Cellular Dynamics

A Japanese firm that is the beneficiary of a $16 million award from the California stem cell agency was the subject yesterday of a piece in the Wisconsin State Journal.

The article by Judy Newman involved Fujifilm and Cellular Dynamics International (CDI) of Madison, Wis. The Japanese business bought Cellular Dynamics last April for $307 million. By that time, Cellular Dynamics had received the California cash to help create the world's largest public stem cell bank at the Buck Institute north of San Francisco. 

The stem cell agency has pumped more than $32 million into the project.

The occasion for the Wisconsin story was an interview with Kazuyoshi Hirao, CDI’s new chairman and CEO, and Chris Parker, executive vice president and chief business officer. The story also reported that Jamie Thomson, the famed University of Wisconsin researcher who founded the firm, is no longer employed by it. The newspaper did not elaborate.

Here are some highlights from the Q&A.

Parker said that Fujifim intends to bring to bear large-scale manufacturing practices on cellular production. He continued,

"Fujifilm believes regenerative medicine (using stem cells to treat diseases) will be a $50 billion market by 2025. Manufacturing will have to ramp up with it. We will have to look at leveraging other technologies to scale the business.

"The concept is that some day, we’ll each have our own iPS cells made and banked. So that when you need heart cells after a heart attack or you have eye damage from age-related macular degeneration, you pull your own cells out of the stem cell bank. Or you can use them to test drugs for toxicity before you take them.

"We’re envisioning replacing existing cells that will stay in the body and not be sloughed off later."

Hirao said, 

"We have a very aggressive target: 60 percent growth in revenue each year, for the next five years. We want our cells to be used for drug research and screening and for cell therapy — treating diseases."

Parker said, 

"CDI already has three cell therapy programs going — for age-related macular degeneration; Parkinson’s disease; and to replace scarred heart muscle after a heart attack — all using our iPS-derived cells. We anticipate being profitable by the end of 2017.

"CDI has 160 employees, about 120 of them in Madison. We expect to hire another 15 to 20 by the end of 2016, at least 10 of them in Madison.

Hirao said,

"We are trying to change the model. Current drug testing is performed, mostly, using animal cells. By 2019, we want the majority of drug testing to use iPS cells instead.

"Once the market is created, there will be a big jump in sales. That’s why Fujijilm has great expectations for this."