Cellular Dynamics International: New Drug Screening Company Opening in Madison, WI

Madison, WI–March 31, 2005—Cellular Dynamics International (CDI), a
privately held company, announced today that it recently began
construction of laboratory facilities for a new biotechnology based drug
screening company at University Research Park in Madison, Wis.

CDI was founded by James Thomson, Craig January, and Timothy Kamp, noted
researchers at the University of Wisconsin-Madison, and Tactics II
Ventures LP, a Wisconsin based venture capital firm.

The company initially will focus on developing and providing stem cell
and HEK cell based screening services to the pharmaceutical and
biotechnology industries. These services will assist in the development
of safer and more effective drugs.

The company’s screening services will be built around two different
technologies initially developed at UW-Madison. The company’s initial
screening services will use HEK cells for hERG screening. HEK cell hERG
screening was first developed at Wisconsin in the lab of Craig January.
HEK cells are kidney derived cells that have been modified to have some
of the electrical conductivity properties of human heart cells. January’s
screening methodology is now widely accepted as a powerful technique for
screening new drug candidates for potentially adverse side-effects on
patient’s hearts before new drugs are tried on animals and humans.

The company’s future lines of screening services will use technologies
developed by James Thomson and Timothy Kamp to, for the first time, make
actual human heart cells, cardiomyocytes, available for drug screening.
Currently, adult human heart cells do not survive well or reproduce
outside of a living human heart, making it impractical to use native
human heart cells to screen drug candidates in a laboratory prior to
testing on live animals and humans. Thomson and Kamp have developed a
technique to reliably direct human ES cells to differentiate into human
cardiomyoctyes. This new technique makes it possible to use human
cardiomyocytes to screen drug candidates for both safety and
effectiveness in a laboratory environment before they are given to
animals and human patients.

“We are thrilled to be building a new company in Wisconsin with such
renowned scientists as James Thomson, Craig January and Timothy Kamp”,
said Bob Palay, Managing Member of Tactics II Ventures and Chairman of
CDI. “We believe that this is an exciting opportunity to utilize these
exciting new techniques to improve and protect human health. These novel
drug screens promise to speed the development of many new safe and
effective drugs.”

“I’ve always been very proud of how strongly associated Wisconsin has
become with the stem cell field,” commented Thomson. “There is a
tremendous opportunity for this field to benefit Wisconsin economically.
But we face stiff competition from other states such as California and
New Jersey, which are making very large public investments in stem cell
research. I hope that the legacy of CDI will be in that it demonstrates
it is possible to set up a successful, profitable stem cell company in
Wisconsin, and it will inspire others to set up businesses here too.”

According to January, “In the last several years, biotechnology-based
cell screening methods have assumed much greater importance. These
methods have allowed for the early recognition of potential cardiac side-
effects of new drug candidates. One direct result is that thousands of
patients’ lives have been saved. CDI’s services will be focused on such
life saving technologies.”

“The opportunity to test new drugs on human cardiac muscle cells or other
specific human cell types derived from stem cells in the laboratory has
the potential to revolutionize drug development. Perhaps the greatest
impact of this new technology will be to provide a higher level of safety
in candidate drugs before they reach patients”, commented Kamp.

About Tactics II Ventures LP

Tactics II Ventures LP is a Wisconsin based venture capital firm
specializing in early stage life science companies. Its principals, Bob
Palay and Tom Palay are founders of Madison based NimbleGen Systems and
Genetic Assemblies.

About Thomson, January, and Kamp
James A. Thomson, V.M.D., Ph.D., Diplomate A.C.V.P
WiCell Research Institute.
University of Wisconsin-Madison Medical School,
The Wisconsin National Primate Research Center, and
The Genome Center of Wisconsin
Craig T. January, M.D., Ph.D
Professor of Medicine and Physiology, University of Wisconsin-Madison
Medical School
Timothy J. Kamp, M.D., Ph.D.
Associate Professor of Medicine and Physiology, University of Wisconsin-
Madison Medical School WiCell Research Institute.

For further information
Robert J. Palay
Cellular Dynamics International