ANNUAL FINANCIAL REPORT 2010 2010 - TiGenix

Appendix 2: REGULATORY APPROVALPROCESSESRegulation by governmental authorities worldwide isa significant factor in the development, manufacture,commercialisation and reimbursement of TiGenix’ productportfolio. All of the Company’s products will require marketingapproval, or licensure, by governmental agencies prior tocommercialisation.Human medicinal products are as a rule always subjectto rigorous preclinical and clinical testing and approvalprocedures of the FDA in the US, EMA in Europe and similarRegulatory Authorities in other countries. Various governmentalstatutes and regulations also govern or influence testing,manufacturing, safety, labelling and record keeping relatedto such products and their marketing. State, local or otherauthorities may also regulate pharmaceutical manufacturingfacilities. The process of obtaining such approvals and thesubsequent compliance with the appropriate statutes andregulations require the expenditure of substantial amounts oftime and money.The Company believes that the key to success in cell- andtissue-based therapies is to excel in “evidence-based medicine”.Only by proving efficacy in prospective randomised clinicaltrials and by demonstrating the health-related economicbenefits in well-designed pharmacoeconomic studies, itwill be possible to convince Regulatory Authorities of theoverall benefits provided by the use of these products.Under “evidence-based medicine”, it is no longer sufficientto demonstrate the safety of cellular products. Their efficacyand potency must also be demonstrated and validated. TheCompany anticipated this early on and so positioned its cellbasedproducts as defined medicinal products.Since cell-based therapies are a relatively new field, theregulatory framework for these products is still developing.When TiGenix started designing its first clinical trials forChondroCelect, no clear regulatory framework for cell-basedproducts existed in Europe. The Company therefore usedan FDA guidance document, describing the regulation ofproducts for cartilage repair as biologics (guidance for productscomprised of living autologous cells intended for structuralrepair (MAS-cells; Docket No. 95N-0200)). TiGenix decided toset up a fully controlled, prospective randomised clinical trialin compliance with GCP requirements deriving from Directive2001/20/EC 83 as well as related implementation measures andapplicable guidelines, thus anticipating the future regulatoryrequirements of the European Regulatory Authorities.This regulatory anticipation has proven to be the rightchoice, as cell-based products are now clearly classified asbiological medicinal products, also in Europe. From December30, 2008 onwards, a new regulatory framework has beenimplemented, regulating the development and market accessof all ATMPs including tissue-engineered, somatic cell therapyand gene-therapy products across the European Union 84 . Theimplementation of the ATMP regulation in Europe creates aregulatory environment for the above mentioned productcategories that is similar to the one existing for biologicals, bothin Europe and the US.According to the 2009 report of the Millenium research group“implementation of the advanced therapies regulation will fuelgrowth in the emerging tissue engineering industry, propelinnovation, and boost the competitiveness of the EU in thebiotechnology market.” 85Although the basic regulatory frameworks are now in place inEurope and the US, at present still little experience with suchproducts exists, and consequently the regulatory frameworkwill continue to evolve. An example of this is the still limitednumber of regulatory guidance documents providing practicalguidance on product development and requirements. TheCompany will therefore continue to proactively address the83 Directive 2001/20/EC of the European Parliament and of the Council of April4, 2001 on the approximation of the laws, regulations and administrativeprovisions of the Member States relating to the implementation of goodclinical practice in the conduct of clinical trials on medicinal products forhuman use.84 Regulation (EC) No 1394/2007 of 13 November 2007, published on December10, 2007.85 Millenium Research Group European Market for Orthopedic Biomaterials,July 2009.231 •