ANNUAL REPORT 2012 - TiGenix

making this change may be costly and
may delay the Company’s trials, and
contractual restrictions may make such a
change difficult or impossible. Additionally,
it may be impossible to find a replacement
organisation that can conduct the
Company’s trials in an acceptable manner
and at an acceptable cost.
While there are numerous suppliers on the
market for most of the supplies that TiGenix
needs for its activities, there is no certainty
that the current suppliers will continue to
supply their products under commercially
viable terms, in accordance with the
applicable regulations or in compliance
with the obligatory production standards in
the countries where TiGenix expects to sell
its products, which may mean that TiGenix
could be forced to seek alternate suppliers.
TiGenix also faces the risk that its suppliers
are unable to provide the necessary
quantities and qualities needed to satisfy
the Company’s and the market’s demands.
In respect of ChondroCelect, TiGenix relies
solely on MedInvents for the manufacturing
and supply of the ChondroCelect Harvester
(a device specifically designed and used
for the cartilage biopsy) and on Geistlich
for the supply of ChondroGide (a biological
membrane used for the implantation of
ChondroCelect). There is one ingredient used
in the production of the Company’s product
Cx621 (which has recently finished a Phase I
clinical trial stage) for the supply of which
TiGenix currently depends on a particular
supplier.
The materialisation of some of these risks
could cause delays in the commercialisation
of ChondroCelect or the development of
TiGenix’s eASC based products.
TiGenix may in the future rely on a number
of contract manufacturing organisations
to develop and manufacture certain
of its products, including for its clinical
development programmes. There can be
no guarantee that TiGenix will be successful
in establishing such manufacturing
arrangements on acceptable terms, or at
all, or in maintaining those. There is a risk that
if one of these organisations were to cease
supplying products for TiGenix there would
be a delay in, and an increase in the costs
of, its product development programmes.
There can be no assurance that TiGenix’s
products, including its currently unapproved
products, if approved, can be manufactured
in sufficient commercial quantities, in
compliance with regulatory requirements
and at an acceptable cost.
The Company may further expand its
activities in the future by in-licensing certain
technologies and/or products and by
acquisitions. Collaboration and integration
will have an important impact on the success
of the Company’s expansion strategy.
TiGenix may not own the patents or
supplementary protection certificates on
the basis of which these licences may be
granted. These licenses may generally be
terminated by the licensor in the event of
certain breaches by TiGenix of its obligations
under the license and in other specified
circumstances. If any of the Company’s
license agreements is terminated, the further
development and commercialisation of
some of the development products could
be prevented or delayed, reducing its
potential revenues. The scope of TiGenix’s
rights under its licences may be subject to
dispute by licensors or third parties. TiGenix
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