ANNUAL FINANCIAL REPORT 2010 2010 - TiGenix

Recognising the importance of pre-launch product andtherapy awareness and of the need for direct contact with thefirst prescribers of this innovative product, TiGenix has, wellahead of the approval of the product, set up a high-level directcommercial core team. The team consists of about 15 people,covering a significant part of the market in Western Europe.TiGenix now has a commercial presence in the Benelux, theUnited Kingdom, Germany/Austria/Switzerland, France, andSpain/Portugal. As the Company will expand to other markets,the Company will each time investigate whether to developthese markets with an internal direct sales force, possiblyassisted by selected local agents, or to consider entering intodistribution arrangements.The direct core team is composed of a mix of backgroundswith experience in the pharmaceutical industry and medicaldevices to take into consideration the specific needs andrequirements for the successful marketing of innovativemedicinal cell therapy products, and is organized in threeclosely collaborating functions:• Therapy development and customer support• Market Access, Pricing & Reimbursement• MarketingThe commercial team can rely upon scientific and medicalsupport from the R&D, Clinical and Medical Affairs groupswithin TiGenix for the scientific dissemination and medicaltraining that is required to launch the product successfully.In 2010, ChondroCelect product sales amounted to€0.8 million. These early sales have been realised in Belgium,the United Kingdom and the Netherlands under a varietyof pre-reimbursement payment mechanisms as well asinitial reimbursements by German health insurance funds.TiGenix expects the sales to increase a soon as more positivereimbursement decisions are obtained.Market access and reimbursementPricing and reimbursement are not harmonised in Europe andfall within the exclusive competence of the national authorities,provided that basic transparency requirements describedin Directive 89/105/EC of December 21, 1988 relating to thetransparency of measures regulating the prices of medicinalproducts for human use and their inclusion in the scope ofnational health insurance systems are met. As a consequence,reimbursement mechanisms by private and public healthinsurers vary from country to country. In public health insurancesystems, reimbursement is determined by proceduresestablished by the competent authority of the EU memberstate. In general, inclusion of a product in reimbursementschemes is dependent on many factors. These factors includeproof of the product’s efficacy, medical need, and economicbenefits of a product to the healthcare system in general.Acceptance for reimbursement comes with cost, use and oftenvolume restrictions, which again vary from country to country.The ChondroCelect pricing and reimbursement track differsfrom the route conventional ACI therapies have taken until now,since ChondroCelect follows the pricing and reimbursementtrack for authorized medicinal products and/or novel therapies.Several countries have established processes to reimbursenovel therapies, but the stakeholder and decision-makingpathways vary significantly between countries. BecauseChondroCelect is a pharmaceutical product, a pricing andreimbursement dossier must be submitted to the nationalauthorities. Based on the clinical data and health-economicstudies, TiGenix has developed a detailed Core Value Dossierto support these applications and the negotiations with thenational reimbursement agencies and private payers.Reimbursement dossiers were submitted in Belgium, Germany,the Netherlands, Spain and France. Being the first approvedcell-based medicinal product in Europe, ChondroCelect ispioneering the reimbursement track for Advanced TherapyMedicinal Products and timelines may vary from currentlyknown pharmaceutical product reimbursement timelines.In Belgium, TiGenix introduced an application for thereimbursement of ChondroCelect to the reimbursementauthority (RIZIV/INAMI) in April 2010. On February 24, 2011,the Company received the notification by the Minister ofSocial Affairs of the approval of a convention agreement(Art. 81 of the Belgian Royal Decree of December 21, 2001 onthe reimbursement of medicines) between the RIZIV/INAMIand TiGenix for the reimbursement of ChondroCelect forwell-indicated patients in specialised treatment centres. Thisconvention covers a period of three years and defines thespecific treatment criteria and follow-up measures applicable tothe reimbursable use of ChondroCelect.With the signing of this reimbursement convention,ChondroCelect is not only the first cell-based product to haveobtained centralised European marketing authorisation, it isalso the first Advanced Therapy Medicinal Product (ATMP) toobtain a national reimbursement.118 • TiGenix • Rights Offering