ANNUAL REPORT 2012 - TiGenix

In recent years, it expanded its operations
to the U.S. through the establishment of its
U.S. subsidiary, TiGenix Inc., which in turn
owned 50 % in U.S. company TC CEF LLC, with
a view to manufacturing ChrondroCelect
in the context of clinical trials required by
the FDA and to be able to service the US
market after obtaining marketing approval of
ChondroCelect in the U.S. However, in view
of the time and costs related to obtaining
such marketing approval in the U.S., the
Company abandoned its plans to enter the
US market independently as a result of which,
with effect as of November 23, 2010, TiGenix
Inc. has withdrawn itself from TC CEF LLC and
has terminated its membership interests in TC
CEF LLC. Currently, TiGenix Inc. is not active.
The Company has established a Dutch entity,
TiGenix B.V., acquired a UK biomaterials
company, Orthomimetics Limited (currently
named TiGenix Ltd.), spun off drug discovery
assets to the Dutch entity Arcarios B.V. in
which it holds a shareholding of 14.77 %,
and acquired a cell-therapy company
Cellerix S.A. (currently named TiGenix SAU).
However, in view of TiGenix’s new strategic
direction and exclusive focus on cell therapy
since 2011 and to allow the Company to fully
focus on the further commercial roll-out of
ChondroCelect and its cell therapy product
development pipeline, the Company has
decided to cease the activities of TiGenix
Ltd and is currently in the process of closing
down this subsidiary. Therefore, the IP of
TiGenix Ltd., recognized in the Group’s
intangible assets, was fully impaired in the
2011 financial accounts.
and products to expand its activities. As a
consequence, intangible assets, including
goodwill, could account for a larger part of
the balance sheet total than is currently the
case. Despite the fact that TiGenix carefully
investigates every acquisition, the risk remains,
amongst others, that corporate cultures
do not match, expected synergies do not
fully realise, restructurings prove to be more
costly than initially anticipated and acquired
companies prove to be more difficult to
integrate than foreseen. The Company
can therefore not guarantee a successful
integration of these companies.
The Company’s ability to manage its
growth effectively will require it to continue
to improve its operations, financial and
management controls, reporting systems
and procedures, and to train, motivate and
manage its employees and, as required, to
install new management information and
control systems. There can be no assurance
that the Company will be able to implement
improvements to its management information
and control systems in an efficient and
timely manner or that, if implemented, such
improvements will be adequate to support
the Company’s operations.
Any inability of the Company to manage its
expansion successfully could have a material
adverse effect on its business, results of
operations and financial condition.
TiGenix is working in a changing regulatory
environment. Future changes in any
pharmaceutical legislation or guidelines
could affect the Company’s business.
TiGenix could acquire other businesses,
companies with complementary technologies
Regulatory guidelines may change during
the course of a future product development
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