ANNUAL FINANCIAL REPORT 2010 2010 - TiGenix

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• Mesoblast (Australia): Largest adult stem cell company inthe world, after consolidation of investment in Angioblastin 2010; Mesoblast is developing its proprietary MPCpurified cell platform in a broad pipeline of products fromautologous proof of principle in orthopedic & cardiovascularindications to allogeneic trials in orthopedic, cardiac andhaematopoetic transplant in orthopedic and cardiacapplications.• Osiris (USA): Is developing a therapeutic platform basedon expanded adult stem cells from bone marrow thoughtto be useful to treat a variety of diseases by controllinginflammation, promoting growth of new tissue andpreventing scars. The proposed MoA is based on immuneprivilegeof cells and their immuno-modulatory and antiinflammatorycapabilities as well as anti-fibrotic and tissueregeneration capacities.• Pervasis Therapeutics (USA): This company is developinga platform of therapeutic products with the potential toimprove outcomes following vascular procedures based onthe ability of the body’s endothelium to regulate naturalhealing processes.Other clinical stage companies that work with adipose tissue asstem cell source include:• Anterogen (South Korea): In Phase II for perianal fistula(autologous)• Cytori Therapeutics (USA): In Phase I for chronic myocardialinfarction• BioHeart (USA): In pre-clinic for acute myocardial infarction• Cardio3bio: Is shifting development from bone marrow toadipose derived tissueThese companies either pursue a different approach in regardsto donor source (anterogen) or work with stromal vascularfraction instead of expanded stem cells (Cytori and BioHeart).6.14.9 Human resourcesCellerix counts on a team of experienced professionals in allareas required to meet its strategic objectives including medical& regulatory, manufacturing, R&D, business development,product development, infrastructures, intellectual propertyand finance.On March 31, 2011, Cellerix had a total of 33 permanentemployees and 7 mandate contractors. About 63% of thesepersons are engaged in research and development activities(including clinical development); about 13% are working inmanufacturing and about 24% are engaged in corporatefunctions.Cellerix is lead by a management team comprised of fourpersons:• Eduardo Bravo: CEO• Claudia D’Augusta: CFO• Jose Luis Bravo: VP Global Medical and R&D• Maria Pascual: VP Regulatory and Manufacturing6.14.10 FacilitiesCellerix’ GMP facilities in Madrid consist of two separate cleanrooms. The first of these was approved under GMP regulationsin 2004. In 2007, Cellerix built a second clean room that allowedtripling capacity. After this extension, Cellerix’ facilities nowconsist of two separate clean rooms that can work in parallelor used as backup if needed. TiGenix currently believes thatthe combined capacity of both clean rooms is sufficient andis fully authorized to take care of manufacturing for ongoingclinical trials, R&D activities and manufacturing for the initialcommercial roll-out of Cx601 in Europe. The manufacturingmodel is a standardized and coordinated process that isreproducible providing appropriate technology transfer byCellerix. Cellerix has undergone EMA quality scientific advice toensure that its manufacturing process is fully aligned with EMArequirements.6.14.11 Grants & subsidiesThe strategy of grants developed by Cellerix is focused onmaximizing public financing to support expenses relatedto R&D, clinical trials and IP strategy. In accordance with thisstrategy, Cellerix has obtained the following subsidies fromvarious public bodies:1. European Commission:• Marie Curie Actions program: European grants to promotehiring of European investigators coming from abroad. Forthe period 2007-2008, Cellerix received €32.000 under thisprogram to support its personnel expenses. No grants underthis program have been received since 2008.2. Spanish National R&D Plan:• Since inception and until December 2010, Cellerix hasreceived, through several call of proposals promoted bythe Spanish Ministry of Industry, Tourism and Trade, the149 •
Spanish Ministry of Education and Science and the SpanishMinistry of Science and Innovation, grants in excess of€3.3 million under the Spanish National R&D Plan, mainlydevoted towards expenses related to research and clinicaldevelopment costs in the company’s projects: eASCsplatform, Cx611, Cx621, Cx911 and Cx501.3. Madrid Regional R&D plan:• Launched and managed by Madrid Regional Governmentthis plan is aimed at foster the Madrid biotech sector. Sinceinception and until December 2010, Cellerix has beengranted with a total subsidies amount of €2.8 million.In general, expenses covered by the grants include personnelcosts, consumables, subcontracting and other direct costs ofthe project funded. Since all public bodies’ requirements havebeen fulfilled, no refund of these grants is expected.Furthermore, on February 10, 2011, Cellerix submitted a grantproposal to be evaluated by the European Commission underthe cooperation area (Health theme), topic 1.4.1.1.(Innovativetherapeutic approaches and interventions: Regenerativemedicine clinical trials). This is a large, integrated, R&Dcollaborative project in which ten entities from differentcountries across Europe are committed to contribute in Cellerix’project Cx611, aimed at developing a Phase I/II clinical trialfor testing the safety and the efficacy of the eASCs in thetreatment of Rheumatoid Arthritis. The total budget of theproject amounts to €8 million. The maximum grant that can beobtained by Cellerix is expected to be up to €3 million in nonreimbursablefinancial support.In addition, Cellerix has benefited from “soft” loans awarded byvarious public entities as enumerated in the table below:Public Body Soft Loan Year Status AmountEmpresa Nacional de Innovación SA (“ENISA”)(National Participative loan, first payment 2006 Paid €450,000Innovation Company)ENISA Participative loan, second payment 2006 Paid €450,000Spanish Ministry of Science and Education PROFIT Loan 74 2005 2005 Cashed in 2005 €158,653Spanish Ministry of Science and Innovation (“MICINN”) ACTEPARQ 75 2009 Cashed in 2009 €108,908MICINN Soft loan under the “Singular” scheme 2009 Cashed in 2010 €311,729MICINN Soft loan under the “Singular” scheme 2010 Cashed in 2010 €887,950MICINN INNPACTO 76 2010 Cashed in 2011 €527,000MICINN INNPACTO 2011 Not cashed in yet €0MICINN INNPACTO 2012 Not cashed in yet €0MICINN INNPACTO 2013 Not cashed in yet €0Spanish Ministry of Science and Education Singular Loans 77 2006 Cashed in 2006 €100,000Subtotal Cellerix’ soft loans €2,994,240These “soft” loans are all awarded with a 0% interest rate and arepayment period between 10 and 15 years. Start of repaymentis not due until between 3 and 5 years of the loan beingawarded.Footnote74Footnote75Footnote76Footnote7774 PROFIT Loans: Soft loans provided by the Spanish Ministry of Scienceand Innovation for the financing of projects of advanced technologicaldevelopment.75 ACTEPARQ: Grants provided by the Spanish Ministry of Science andInnovation to entities that have their activities within science andtechnology parks.76 INNPACTO: Soft loans provided by the Spanish Ministry of Science andInnovation to further cooperation between public centers and companiesthrough the collaboration in R&D programs.77 Singular loans: Soft loans provided by the Spanish Ministry of Science andInnovation in order to foster large scale R&D collaboration projects.6.14.12 LitigationApart from a procedure involving the invalidation of a USpatent (described below), Cellerix is not involved in anylitigation process or is aware of any pending procedures.On April 1, 2011 Cellerix wfiled a re-examination request withthe United States Patent and Trademark Office (“USPTO”)regarding US6777231, owned by the University of Pittsburghand licensed to several parties, including Artecell. Cellerix hasrequested re-examination of all claims of this patent and hasasked the USPTO to consider prior art not evaluated duringprevious examination of the patent. Cellerix is of the opinionthat this prior art is materially relevant to the patentability of theclaims.150 • TiGenix • Rights Offering
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TiGenix NV(Public limited liability
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Table of ContentsSummary ..........
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3.7.1 Categories of potential inves
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5.7.1 Shares and warrants held by i
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7.5.2 Taxation.....................
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SummaryThe words written in capital
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Activities and strategy of the Comp
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• Two allogeneic adult stem cell
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• TiGenix’ success depends on i
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Unaudited pro forma income statemen
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Recent developmentsAcquisition of C
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In this context, we would like to s
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Announcement of the results of theO
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After the Contribution andafter the
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ContributionContribution AgreementC
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Risk factorsAny investment in the P
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commercialisation of ChondroCelect,
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in delays in bringing products to t
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The Company cannot predict what eff
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y each of its patents and patent ap
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to exercise preferential subscripti
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this prospectus which is capable of
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• investment professionals fallin
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1. General information and informat
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1.4.2 Company documents and otherin
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• the granting of discharge of li
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• in case of registered Shares, t
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cast at the meeting. If the amount
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No one may cast a greater number of
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If a Belgian resident individual ne
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Belgium has concluded tax treaties
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3. Information on the Contributiona
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In this context, we would like to s
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TiGenix has a limited financial deb
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Thousands of Euro (€) TiGenix Cel
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3.5.2 Issuance Price and RatioThe i
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(c)Rules for subscriptionSubject to
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The Scrips Private Placement will o
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to comply with any of its obligatio
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3.11.2 Scenario 1: Existing Shareho
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• a pledge of Locked Shares to a
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4. General information about THECOM
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DateINCORPORATIONFebruary 21,2000Tr
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Upon completion of the IPO of TiGen
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Issue dateMay 14,2004April 20,2005T
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4.7.2 Voting rightsAs further descr
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can be obtained free of charge at t
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5.2.4 Composition of the Board of D
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Amonis. Mr. Duron has been CEO of K
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5.3.4 Nomination and remunerationco
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• investor relations: nurturing c
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The remuneration of the members of
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Page 111 and 112: Cellerix EBIP 2010An EBIP for senio
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Page 117 and 118: • Clinical stage pipeline. TiGeni
Page 119 and 120: 6.3.3 Acquisition of CellerixAs a r
Page 121 and 122: Full thickness articular cartilage
Page 123 and 124: Fig. 6.2: Autologous Chondrocyte Im
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Page 129 and 130: Recognising the importance of pre-l
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Page 133 and 134: Fig. 6.6: ChondroMimetic procedure
Page 135 and 136: 6.5.3 Commercial strategyBuilding o
Page 137 and 138: 6.7 Manufacturing & logisticsEffici
Page 139 and 140: The international application WO06/
Page 141 and 142: ChondroMimetic competitionThe main
Page 143 and 144: in Cellerix’ GMP facility in Madr
Page 145 and 146: 6.14.3 History and development of C
Page 147 and 148: The table below gives an overview o
Page 149 and 150: Prevalence No. of cases (2010) Esti
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Page 153 and 154: In developing Cx601, Cellerix has b
Page 155 and 156: 6.14.6 Manufacturing & logisticsCel
Page 157 and 158: population, methods for the isolati
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Page 196 and 197: Business combination Cellerix SADes
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9.1.2 Stand-alone balance sheetYear
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9.1.4 Stand-alone statement of chan
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) Standards and interpretations iss
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The clinical development of new dru
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future against which they may be ap
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Cellerix’ research and developmen
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YearThousandsof Euro2010 2009 2008E
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Thousands of Euro (€)Laboratoryeq
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Current financial assetsShown below
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At December 31, Cellerix’ share c
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9.1.5.17 Deferred revenueThe balanc
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9.1.5.21 Share-based paymentsThe EB
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GrantsCellerix received several gra
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10. Report regarding unaudited prof
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EMAFDAFibrous tissueGCPGMPGrowth fa
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Appendix 1: Press releases 2006-201
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Appendix 2: REGULATORY APPROVALPROC
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like ChondroCelect or the future ce
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TitleCountry/regionPatent/applicati
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TitleCountry/regionPatent/applicati
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Title“Cell populations having imu
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D. Trademarks of CellerixThe table
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Decision resources.Dell’Accio, F.
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Noyes, F. R., Barber-Westin, S. D.,
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Appendix 5: 2008, 2009 and2010 mana
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Contents1. The year in brief ......
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2. Financial informationa. The Inco
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The Directors shall call a Sharehol
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• Exercise price changed to 5.291
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10 • TiGenix • Rights Offering
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Exceptionally, for the following re
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(d)(e)Duration: The Options Plan wi
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eceipt sent to the number or addres
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THE COMPANYTiGenix NVRomeinse straa
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