ANNUAL FINANCIAL REPORT 2010 2010 - TiGenix

8.1.5.4 Operating result (EBIT)Result from operations has been arrived at after charging:(a)Research and development expendituresYears ended December 31Thousands of Euro (€) Notes 2010 2009 2008Personnel costs 8.1.5.5 3,144 4,264 4,804Depreciations 1,979 644 487Operating costs 4,064 2,035 3,502General costs 686 737 685Production costs 0 433 497Total 9,873 8,114 9,975The Group’s research and development costs increasedwith 22% between 2009 and 2010. The personnel costswere lower in 2010 due to the allocation of the personnelcosts related to the direct production of ChondroCelect andChondroMimetic to cost of sales and the downscaling ofthe R&D staff. The amortization of intangible assets relatedto the acquisition of Orthomimetics Ltd (today TiGenix Ltd)led to higher depreciations in 2010. The operating costs havedoubled compared to 2009. Main drivers of the increase werethe preparation of the post-market trial for ChondroCelect asrequested by EMA, the costs related to the delivery device forChondroMimetic and the full period impact of OrthomimeticsLtd (today TiGenix Ltd) and TiGenix BV. The direct productioncosts were part of the cost of sales in 2010. In 2010, € 1,621 ofresearch and development expenditures were capitalizedcompared to € 781 in 2009. The production costs of 2010 areincluded in the cost of sales.(b)Selling, general and administrative expensesYears ended December 31Thousands of Euro (€) Notes 2010 2009 2008Personnel costs 8.1.5.5 4,816 4,268 3,595Depreciations 232 265 210Operating costs 2,501 2,011 2,378General costs 804 773 667Total 8,353 7,316 6,851The selling, general and administrative expenses increasedwith 14% between 2009 and 2010. The increase is a result ofthe expansion of the commercial sales team with 5 people,increased pricing and reimbursement costs and the additionalG&A costs associated with the acquisition of Orthomimetics Ltd(today TiGenix Ltd).175 •