ANNUAL FINANCIAL REPORT 2010 2010 - TiGenix

7. Management’s discussion andanalysis of TiGenix’ financial conditionand result of operationsThe following outlook discussion contains forward-lookingstatements, including statements about the Company’s beliefsand expectations. Forward-looking statements involve inherentrisks and uncertainties and speak only as of the date theyare made. The Company cautions investors that a number ofimportant factors could cause actual results or outcomes tomaterially differ from those expressed in any forward-lookingstatements. See also “Forward-looking information” on page39.With respect to the expectations for 2011 and beyond therecan be no assurance that such expectations will occur due to anumber of factors including, among others, general economicand business conditions, industry trends, availability and theterms of available funding, competition, currency fluctuations,failure to achieve the expected research and developmentresults and regulatory approvals to commercialize theproduct as a medicinal product, the commercial success ofChondroCelect and ChondroMimetic, the loss of key personnel,availability of suitably qualified personnel and consultantson commercially reasonable terms and other factors, someof which are referred to elsewhere in this prospectus. See also“Risk Factors”, beginning on page 23. All financial informationset out in this chapter has been derived from the auditedconsolidated financial statements of TiGenix as of December31, 2008 December 31, 2009 and December 31, 2010. Thefinancial information has been presented in accordance withInternational Financial Reporting Standards (IFRS).7.1 OverviewSection 6 contains a general overview of the Company’sactivities.Despite the numerous achievements since incorporation,including the regulatory approval of its two lead productsChondroCelect and ChondroMimetic in the European Union,the Company has not yet achieved profitability. The Companyincurred a cumulated loss of €78.9 million until December 31,2010.In the years to come, TiGenix will continue (i) to increase itscommercialization and manufacturing efforts for its leadproducts and potential third-party products, (ii) to invest inclinical validation of its products and (iii) to expand its researchand development projects in the biomaterial and stem cell area.TiGenix expects to generate operating charges tocommercialise its lead products ChondroCelect andChondroMimetic in Europe, to obtain regulatory approvalof its lead products in other regions, to maintain the marketauthorizations for its lead products, to expand the commercialproduct portfolio, to ensure the necessary production capacityfor the manufacturing of its lead products according to GMPand QMS/R requirements and to develop new products basedon its complementary biomaterials and stem cell platform.TiGenix anticipates to increase its revenues over time from thesales generated by ChondroCelect and ChondroMimetic andfrom research and development grants. It is not certain thatthe generated revenues will fully offset the incurred operatingcharges in the years to come.151 •