ANNUAL REPORT 2012 - TiGenix

Risk factors
The risks that TiGenix believes to be material
are described below. The occurrence of one
or more of these risks may have a material
adverse effect on the Company’s cash flows,
results of operations, financial condition and/
or prospects and may even endanger the
Company’s ability to continue as a going
concern. Moreover, the Company’s share
price could fall significantly if any of these
risks were to materialise. However, these risks
and uncertainties may not be the only ones
faced by TiGenix. Additional risks, including
those currently unknown or deemed
immaterial, may also impair the Company’s
business operations. The risks listed below
are not intended to be presented in any
assumed order of priority.
TiGenix has a history of operating losses
and an accumulated deficit until today
and may never become profitable.
TiGenix has experienced operating losses
since its founding in February 2000. It
experienced net losses of KEUR 15,309 in
2010, KEUR 37,305 in 2011, and KEUR 20,393
in 2012. As of December 31, 2012, TiGenix
had an accumulated deficit of KEUR 55,700,
which amount was reduced during 2012
as a result of a capital decrease through
the incorporation of losses carried forward
of KEUR 80,452. These losses resulted
mainly from the pre-clinical, clinical,
manufacturing and regulatory efforts done
to obtain the central European Marketing
Authorisation for ChondroCelect ® and to
advance the pipeline products, from the
commercial efforts in preparing the launch
of ChondroCelect and from general and
administrative costs associated with the
operations. Costs have always exceeded
revenues, which were generated mainly
through grants and early income from the
sales of ChondroCelect.
TiGenix intends to expand its commercial
capabilities for ChondroCelect, its research
and development capabilities for its pipeline
products and its manufacturing capabilities
and to develop, in-license and acquire
additional intellectual property rights and
know-how. These expansion intentions will
further increase the operational expenses
and cash consumption of the Company in
the coming years. The amount and timing
of any expenditure needed to implement
the Company’s research, development,
production and commercialisation
programmes will depend on numerous
factors, many of which are outside TiGenix’s
control. These factors include :
- costs incurred to sustain technological
and market developments, scaleup
manufacturing and effectively
commercialise the Company’s products;
- higher costs and slower progress than
expected to develop future products or
obtain regulatory approvals;
- lower revenues than expected from
ChondroCelect and future products;
- unexpected opportunities to develop
additional promising product candidates or
to acquire technologies or other businesses;
and
- costs incurred to file, enforce or protect
patents or other intellectual property rights.
4 TiGenix I annual report 2012