ANNUAL REPORT 2012 - TiGenix

technologies licensed by TiGenix will not
subsequently be found to infringe on third
party intellectual property rights.
On April 1, 2011, TiGenix SAU (then still Cellerix
S.A.) filed a re-examination request with the
United States Patent and Trademark Office
(“USPTO”) regarding US6777231, owned
by University of Pittsburgh and licensed to
Artecell for human therapeutic use. The
USPTO Examiner has issued a decision
concluding that all claims of the patent
are invalid, and subsequent to the issue of
the right of appeal notice, the University
of Pittsburgh has appealed the Examiner’s
decision. There can be no guarantee of
success of the outcome of these proceedings
and the proceedings may take longer than
expected, which may result in unexpected
additional costs and may have a material
adverse effect on TiGenix’s future business,
financial condition, operating results and
cash flow. At this stage, TiGenix is not in a
position to assess the probable outcome of
these proceedings. If the re-examination is not
successful, TiGenix may be required to obtain
a licence from Artecell on unfavourable
terms, or may not be able to obtain a licence
at all in order to commercialize its adipose
derived stem cell products in the U.S. In such
a scenario, the Company may be susceptible
to patent infringement when commercializing
its eASC products in the U.S. While this is
not anticipated to delay development of
TiGenix’s products, it may have a material
adverse effect on TiGenix’s future business,
financial condition, operating results and
cash flows. In such an event, TiGenix’s may
choose to delay the launch of its adipose
derived stem cell products in the U.S. market
until patent expiry on March 10, 2020. Should
TiGenix choose to launch an adipose derived
stem cell product in the U.S. market prior to
expiry of the patent it may be liable to future
litigation regarding patent infringement
which could result in payment of royalties,
an injunction on future products until patent
expiry and/or damages. To avoid infringing
granted patents equivalent to US 6777231 in
other countries, TiGenix may at any given
point in time be forced to develop and utilise
alternative technology, to exploit its current
technology and products under a royalty
bearing license of other parties’ intellectual
property rights, or, to delay the launch of its
adipose derived stem cell products in the
relevant market until patent expiry.
TiGenix’s success depends on its key
people and it must continue to attract and
retain key employees and consultants to
be in a position to continue its activities.
The Company’s future success is substantially
dependent on a number of key people.
Competition for qualified employees
and consultants in scientific research and
biotechnology industries is intense and
there are a limited number of persons with
knowledge appropriate to, and experience
within, such industries. The process of
identifying personnel with the combination
of skills that is required to enable TiGenix to
carry out its strategy is often lengthy and
uncertain as to its outcome.
TiGenix’s success depends to a significant
degree upon its ability to attract and
retain qualified management, scientific,
technical, marketing and sales personnel
and consultants and upon the continued
contributions of such personnel and
consultants. TiGenix’s employees may
voluntarily terminate their employment at
any time. There is no guarantee that TiGenix
will be successful in attracting and retaining
18 TiGenix I annual report 2012