ANNUAL FINANCIAL REPORT 2010 2010 - TiGenix

the rules and regulations regarding reimbursement or changesto existing regimes of reimbursement or the introductionof a new regime in any country could impact on whetherreimbursement is available at adequate levels or at all. Rules andregulations regarding reimbursement may change frequently,in some cases at short notice. In view of the global costpressures on healthcare and pharmaceutical markets, furtherchanges should be expected.TiGenix may experience delays in the preclinicaland clinical development of its product pipeline.As part of the regulatory approval process, TiGenix mustconduct pre-clinical studies for each of its unapprovedproducts (medicinal products and devices) and clinical trialsfor each of its unapproved medicinal products to demonstratesafety, efficacy and quality. The number of pre-clinical studiesand clinical trials that will be required varies depending onthe product, the indication being evaluated, the trial resultsand the regulations applicable to the particular product. Theresults of pre-clinical studies and initial clinical trials of TiGenix’unapproved products do not necessarily predict the results oflater-stage clinical trials. Unapproved products in later stagesof clinical trials may fail to show the desired safety, efficacy andquality despite having progressed through initial clinical trials.There can be no assurance that the data collected from the preclinicalstudies and clinical trials of the Company’s unapprovedproducts will be sufficient to support FDA, EMA, otherregulatory approval, or approval from local ethics committees.In addition, the continuation of a particular study after reviewby an independent data safety monitoring board or reviewbody does not necessarily indicate that all clinical trials willultimately be successfully completed.TiGenix cannot accurately predict when its current preclinicalstudies and clinical trials as well as future clinical trials will becompleted, if at all, nor when planned preclinical studies andclinical trials will begin or be completed. Successful and timelycompletion of clinical trials will require TiGenix to recruit asufficient number of patient candidates, locate or developmanufacturing facilities with regulatory approval sufficient forproduction of the product to be tested and rely on agreementswith clinical research organisations to perform the trials.The Company’s products may produce unexpected side effectsor serious adverse events which could interrupt, delay or haltclinical trials of TiGenix’ unapproved products and could resultin the FDA, the EMA or other regulatory authorities denyingapproval of its products for any or all targeted indications. Anindependent data safety monitoring board, the FDA, the EMA,other regulatory authorities or TiGenix itself may suspend orterminate clinical trials at any time. There can be no assurancesthat any of TiGenix’ pipeline products will ultimately prove tobe safe for human use.TiGenix may need to engage or further engage in pre-clinicalstudies and clinical trials with partners, which may reduce anyfuture revenues from its current or any future products. Anydelays in finding suitable partners, if need be, or in completingpre-clinical studies or clinical trials will delay TiGenix’ ability togenerate meaningful revenue from product sales, as a result ofwhich the Company may have insufficient capital resources tosupport its operations.Regulatory approval of TiGenix’ products asmedicinal products or devices may be delayed,not obtained or not maintained.Regulatory approval may be delayed, limited or denied fora number of reasons, most of which are beyond TiGenix’control. Such reasons include the requirement to performadditional clinical trials, the product not meeting safety/efficacyrequirements or the relevant manufacturing processes orfacilities not meeting applicable requirements. Any such delayor denial is likely to have a significant impact on the Company’soperations and prospects, in particular on its expectedrevenues.Regulatory authorities, including the FDA, the EMA and theNotified Bodies (granting CE mark), may disagree with theCompany’s interpretations of data from pre-clinical studiesand clinical trials. Regulatory authorities also may approvea product for narrower indications than requested or maygrant approval subject to the performance of post-marketingstudies for a product. There can be no guarantee that suchpost-approval studies, if required, will corroborate the resultsof earlier trials. Furthermore, the market use of such productsmay show different safety and efficacy profiles to thosedemonstrated in the trials on which marketing approval wasbased. Such circumstances could lead to the withdrawal orsuspension of marketing approval for the product, which couldhave a material adverse effect on the Company’s business,financial condition, operating results or cash flows. In addition,regulatory authorities may not approve the labelling claims thatare necessary or desirable for the successful commercialisationof the Company’s products.In addition, a marketed product continues to be subject to strictregulation after approval. Changes in applicable legislationand/or regulatory policies or discovery of problems with theproduct, production process, site or manufacturer may result26 • TiGenix • Rights Offering