Cellular Dynamics International, the stem cell company founded by UW-Madison stem cell pioneer James Thomson, is backing off on moving its headquarters to a big, new building in Verona and will stay in Madison, at least for now, as it prepares to push forward with its first potential stem cell-based treatment in early 2018.

CDI president Kaz Hirao said Thursday the company is shelving plans to shift operations to a $40 million, 133,700-square-foot building that was to be built for CDI on Kettle Moraine Trail in Verona. The building was expected to house 280 employees, with so-called clean rooms, quality-control labs, processing rooms and offices.

Instead, CDIs main offices and labs will remain at 525 Science Drive in University Research Park and the company will remodel an existing building whose site has not yet been determined to house several clean rooms that will meet government standards for manufacturing stem cells for use in clinical drug trials.

Fujifilm (CDIs parent company) has a very strong commitment and wants to see (the) Madison (site) grow in the future. Strategy-wise, that has not changed, Hirao said. Madison has a great ecosystem for our businesses.

He said the National Eye Institute plans to submit an application to the U.S. Food and Drug Administration in January 2018 for a retinal cell therapy it has been developing with CDI for age-related macular degeneration, an eye disease that can lead to blindness. The National Eye Institute has conducted animal studies on the drug, Hirao said.

It is the first of a series of stem cell-based drugs the company is working on. CDI expects to file investigational new drug applications for treating Parkinsons disease and for cardiac disease in 2019, he said.

In order to make stem cells that meet government standards for use in human clinical trials, Hirao said the company will establish clean rooms that meet regulations for current good manufacturing practices. He said he expects to designate a location in the next month or two, within about a 15-minute drive of CDI headquarters, to handle the companys stem cell manufacturing needs for the immediate future.

Next year, CDI will review its plans again, Hirao said, and will again consider a move to a larger, consolidated building. If it decides to go ahead with that, Verona would be one of the preferred options, he said.

CDI had obtained up to $6 million in financial incentives from the city of Verona for the building that was to be built and owned by developer John K. Livesey.

Verona planning and development director Adam Sayre called CDIs decision to pull back on the plans unfortunate, but said city officials will keep in contact with Cellular Dynamics over the coming months.

The city would continue to welcome them with open arms, Sayre said. Well see what the next year brings.

At University Research Park, CDI occupies about 55,000 square feet, director Aaron Olver said. Weve recently provided CDI with some additional space to help them grow, he said.

CDI is one of the true gems among companies powered by UW-Madison research, and we would certainly do anything we could to help them find clean room space to continue their work, Olver said.

Founded in 2004, CDI was acquired by Fujifilm Holdings Corp. for $307 million in April 2015.

The company has 165 employees, including about 125 in Madison. Hirao said he expects to add employees, but said its too soon to estimate how many, or how quickly the company will grow.

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CDI ditches move to Verona - Madison.com