iPierian, Stem Cell Startup With Big Science & Big Bucks, Axes Group of Top Executives

5/13/11Follow @xconomy

The board of iPierian, the South San Francisco-based stem cell company with high-profile scientific founders from Harvard University and prominent financial backers that include GlaxoSmithKline, Kleiner Perkins Caufield & Byers, Google Ventures, and Biogen Idec, has terminated several members of the company’s senior executive team as part of a shift in strategy, Xconomy has learned.

Michael Venuti, who was named CEO of Ipierian in July 2010, was fired by the board in late April of this year, and the company’s top executives in charge of finance, business development, and legal/intellectual property were dismissed within days, according to John Walker, Venuti’s predecessor as CEO of iPierian, and two other sources with knowledge of the situation. The chief technical officer, Berta Strulovici, left in the weeks prior to the departures of the other executives, sources said. iPierian hasn’t publicly announced the departures, but it has updated its corporate website, which says the new CEO is Peter Van Vlasselaer, the former CEO of Palo Alto, CA-based Arresto Biosciences. Van Vlasselaer is the only person listed under “Leadership Team” on the company’s website.

Two members of the iPierian board, Corey Goodman and Beth Seidenberg, declined to comment on the moves. Venuti didn’t respond to a request for comment, and neither did Van Vlasselaer or George Daley, a co-founder of the company at the Harvard Stem Cell Institute.

iPierian has been one of the nation’s highest profile stem cell startups of the past few years. The company in its current form was put together in July 2009, when Pierian, a company co-founded by three world-renowned stem cell researchers at the Harvard Stem Cell Institute, was merged with iZumi Bio, a San Francisco startup that focused on reprogramming adult cells to become “pluripotent,” so they could have the vast potential, like that of a stem cell, to morph into most any cell type in the body.

The new combined company, which I profiled in these pages last June, has a high-profile set of venture backers that have poured more than $50 million into the company. The crew of backers includes Kleiner Perkins Caufield & Byers, Highland Capital Partners, MPM Capital, Google Ventures, GlaxoSmithKline’s SR One, FinTech Global Capital, Mitsubishi UFJ Capital, Mission Bay Capital, Atel Ventures, and Biogen Idec New Ventures. iPierian’s last financing came as a Series B round worth $28 million, which Xconomy reported in September.

iPierian’s business strategy has long been to develop technology for using “induced pluripotent stem cells” as a tool for screening new drug candidates; it would then license the technology to Big Pharma companies. In my profile last June, then-CEO Walker said iPierian had created 200 different “lines” of induced pluripotent stem cells from patients with neurodegenerative diseases like Spinal Muscular Atrophy, Huntington’s, Parkinson’s, and Alzheimer’s, and from people with Type 2 diabetes. The company was comparing those cells with cells from healthy relatives to better home in on what might be going awry in the patients with the ailments, and which drugs might have the best chance to change the course of their disease in clinical trials.

iPierian hasn’t yet found a Big Pharma partner to provide cash and validation for this strategy, but Venuti was in position to execute on the plan at the point he was fired, Walker said in a telephone interview last night. Venuti was in advanced talks with one Big Pharma company, negotiating a term sheet, when the board made a decision to dismiss the CEO, Walker said.

“At that point, the board decided it wanted a different strategy for the company,” Walker said.

Walker is not a member of the board, and was not a part of the deliberations that led to the management terminations, but he said he maintains an advisory relationship to iPierian.

The new strategy, Walker said, is for iPierian to reduce the number of scientific programs it is pursuing, and reduce its cash burn rate, in order to position itself for an acquisition.

Van Vlasselaer, iPerian’s new CEO, has a successful track record as an entrepreneur, having most recently sold Arresto Biosciences to Foster City, CA-based Gilead Sciences (NASDAQ: GILD) for $225 million. He is now the fifth CEO to lead iPierian since it was founded three years ago. The others were Thane Kreiner, Seidenberg (on an interim basis), Walker, and Venuti. Walker, for his part, said he left the company a year ago because he was diagnosed with prostate cancer, adding that his health issue has now been resolved.

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