TiGenix gives business update and announces the full year 2008 financial results
Leuven (BELGIUM) - March 16, 2009 - TiGenix (NYSE EURONEXT: TIG) gives an update of business activities and announces its financial results for the full year ending December 31, 2008.
Business Highlights
Preparing for European launch of ChondroCelect
- ChondroCelect three-year clinical data analysis confirms clinical superiority
- EMEA registration procedure progressing
- CHMP opinion anticipated by end of H1 2009
- More than 500 patients treated with ChondroCelect to-date
Organization strengthened
- Move to new facilities
- Cell expansion facility obtained GMP status
- Commercial team almost complete for EU launch ChondroCelect
Progress in pipeline development
- EUR 3 million in grants awarded to support meniscus repair, stem cells and osteoarthritis programs
- Core patents granted in the US
Financial Highlights
- Cash and cash equivalents of more than EUR 25 million at year end
'Last year, TiGenix made excellent progress in positioning and pre-launching ChondroCelect as the gold standard in cartilage repair by showing clinical superiority over microfracture. In view of the positive long-term clinical benefit, we are more optimistic than ever about the prospects of ChondroCelect.' said Gil Beyen, CEO of TiGenix. 'With the anticipated European registration and subsequent commercial launch of ChondroCelect, 2009 will be a transformational year for TiGenix. The positive momentum created by these events is expected to provide additional opportunities to strengthen our leadership position in regenerative medicine.'
BUSINESS UPDATE 2008
Preparing for EU launch of ChondroCelect
In February 2008, TiGenix announced the publication of the positive results of the multi-centre, prospective, randomized, controlled clinical study confirming the structural superiority of ChondroCelect treatment compared with the current standard, microfracture treatment, over 12 months in the American Journal of Sports Medicine (AJSM), one of the highest ranked peer-reviewed journals for orthopedics and sports medicine. In this article1 it was concluded that 'the superior structural outcome may result in long-term clinical benefit', and that 'long-term follow up is needed to confirm these findings'.
The conclusions of the AJSM article were confirmed by the longitudinal statistical analysis of the three-year data of trial, demonstrating clinical superiority of ChondroCelect treatment over microfracture at 36 months. These important new results were presented at the October 31st meeting of the International Cartilage Repair Society (ICRS) in Miami, Florida, US.
With the demonstration of structural superiority at 12 months and superior clinical outcome at 36 months, TiGenix is confident that most important criteria have been fulfilled to obtain marketing approval for ChondroCelect in Europe. In the 4th quarter of 2008, further documentation on the product and process validation procedures was requested by the European regulatory authorities. The company is currently compiling this information for submission, and now expects the CHMP to issue an opinion on the marketing authorization for ChondroCelect still in H1 2009. Following a positive CHMP opinion, TiGenix expects formal marketing approval in the 3rd quarter of 2009, after which the product will be gradually launched in selected European countries.
Based on the long-term patient data and an in-depth analysis of the health-economic benefit of ChondroCelect, a Health Economic Dossier has been developed to support the reimbursement of the product in the target markets.
Since the start of the clinical development of the product, ChondroCelect has been administered to more than 500 patients in a combination of clinical trials and named patient programs in Belgium, Germany, the Netherlands and the U.K. The first patients have now been followed up for 7 years.
Upon approval, ChondroCelect will be the first cell-based product to receive a central marketing authorization for an advanced therapy medicinal product in Europe. On January 1st, 2009 the implementation of the new EU regulation on advanced therapy medicinal products has started. This new regulation stipulates that all cell-based products need central EMEA approval to be allowed on the market. For existing tissue engineered products a transition period is foreseen until end 2012.
Organization strengthened
In 2008, TiGenix has further strengthened its organization. In May 2008, the company moved to a new office and R&D building in Leuven, Belgium, in order to accommodate its expansion. TiGenix further has an option on additional space in the same building for expansion of the production in Europe. Meanwhile, TiGenix continues to evaluate alternative options for expanding its commercial cell production capacity for the European market.
TiGenix' pilot cell expansion facility in Leuven has successfully passed the Good Manufacturing Practices (GMP) inspection as part of the ongoing registration procedure for ChondroCelect. The Belgian Health Authorities have issued a GMP certificate, which will allow the commercial manufacturing of ChondroCelect upon marketing approval in Europe. This pilot facility has sufficient capacity to supply the European market with ChondroCelect for the near future.
The Sales and Marketing team has been further expanded. Patrick Haelterman, former Area Manager Nordics, Central and Eastern Europe at Abbott Vascular, has been appointed as VP Marketing and Sales Europe, regional business heads have been appointed for the major European regions and recently a responsible for reimbursement strategies has been appointed. With 11 people in Marketing and Sales, the commercial team is close to the adequate size for the launch of ChondroCelect in Europe.
Total headcount in the organization grew from 65 at the end of 2007 to 78 at the end of 2008.
Progress in pipeline development
The development of the next generation 3D product, combining ChondroCelect with a biocompatible and biodegradable matrix, is progressing. Product formulation and protocol development are ongoing in anticipation of the start of clinical development in the US. A decision on the European development track will be taken following the CHMP opinion.
In the meantime, TiGenix is pursuing the development work on its meniscus repair and stem cell programs. In 2008, TiGenix was awarded a total of EUR 3 million in grants to support these programs. A EUR 1.8 million grant was awarded by the Flemish government through the Institute for the Promotion of Innovation by Science and Technology (IWT) to support the development of novel cellular therapies for the treatment of damaged menisci. Earlier in the year, TiGenix was also awarded a EUR 1.2 million grant from the European Union's Seventh Framework Program for its participation in TREAT-OA, a leading research consortium focused on novel diagnostics and treatments for osteoarthritis.
In 2008, TiGenix' proprietary intellectual property position in the field of musculoskeletal diseases was reinforced through the issue of 3 US patents. Two US patents cover methods to determine novel functional and molecular parameters associated with mature cartilage-forming chondrocytes as well as the use of these parameters as quality control markers in chondrocyte transplantation. These claimed methods and markers form the basis for the process development and the quality control procedures used in the production of TiGenix' lead cartilage repair product ChondroCelect. The third US patent relates to the use of specific growth factors for the promotion of cartilage and bone formation for the local treatment of cartilage defects.
FINANCIAL RESULTS FOR 2008
Cash and cash equivalents of more than EUR 25 million at year end
The net decrease in cash and cash equivalents in 2008 was EUR 13.8 million.
The net cash used in operating activities of EUR 14.6 million consists of the operating result of EUR (16.5) million and total adjustments of EUR 2.0 million.
Since no commercial sales of ChondroCelect have yet taken place, the operating result is based on limited grant revenues of EUR 0.3 million and operating costs of EUR (16.8) million.
Total research and development costs for 2008 were EUR (10.0) million compared with EUR (8.1) million for 2007. This figure includes the cost of production. The increase of 23% is mainly attributable to the cost of production, both for obtaining the GMP certificate in Europe and making the cell expansion facility in the US fully operational. Furthermore, the additional experiments requested by EMEA as well as increase in personnel costs contributed to the increase.
Selling, general and administrative costs increased by 31% to EUR (6.8) million, mainly due to the pre-launch costs for ChondroCelect in Europe, together with the build up of personnel both in Marketing & Sales and in the Administration.
The total adjustments consist of non-cash items of EUR 1.6 million, other financial result of EUR 0.1 million and changes in working capital of EUR 0.2 million.
The net cash used in investing activities was EUR 0.3 million. The net cash used for investments of EUR 1.7 million, mainly the new R&D labs and offices in our headquarters in Leuven, was partially compensated by the EUR 1.4 million net interests received on the cash and cash equivalents.
The net cash provided by financing activities of EUR 1.0 million mainly consists of the net proceeds from the exercise of existing warrants.
TiGenix had a sound balance sheet structure with cash and cash equivalents of EUR 25.2 million as of December, 31 2008.
OUTLOOK
CHMP opinion for ChondroCelect
Approval and launch of ChondroCelect in selected European countries
Expansion of the cell manufacturing capacity in Europe
Filing of BLA for ChondroCelect in the US
Start clinical development of the next generation 3D product
For more information, please contact
Gil Beyen
Chief Executive Officer
+32 16 39 60 60 +32 16 39 60 63
+32 473 74 20 57
gil.beyen@tigenix.com
Kris Motmans
Corporate Communications
kris.motmans@tigenix.com
TiGenix NV Romeinse straat 12 bus 2 , 3001 Leuven, Belgium 0471.340.123 RPR Leuven tel +32 (16) 39 60 60
10/11
About TiGenix
TiGenix NV (Euronext: TIG) is a late-stage biomedical company that focuses on innovative local treatments for damaged and osteoarthritic joints. The Company is exploiting the power of regenerative medicine to develop durable treatments, validated through controlled clinical trials, for these indications. Based in Leuven, Belgium, TiGenix was founded as a spin-off from the Katholieke Universiteit Leuven and the Universiteit Gent.
TiGenix is developing a portfolio of products that address specific musculoskeletal problems. The lead indication among these is cartilage damage, which is a debilitating affliction affecting the mobility and functioning of patients. Western societies are characterized by ageing populations that place an increasing emphasis on high quality of life and life-long mobility, and, as such, cartilage problems represent a large and growing unmet medical need. Current therapies do not provide satisfying, long-term durable repair and TiGenix therefore believes there is a need for more effective treatments for cartilage damage.
About ChondroCelect (TGX001)
ChondroCelect® is the lead product for TiGenix that is in late stage development for applications in cartilage repair. ChondroCelect consists of characterized cultured chondrocytes derived from the patient's own cartilage and is used for autologous chondrocyte implantation (ACI), a surgical procedure to treat cartilage defects. Cartilage defects of the knee are very common, and the spontaneous healing capacity of cartilage is limited. The objective of the ChondroCelect technology is to facilitate the regeneration of hyaline-like cartilage that more closely approximates the structure of healthy normal cartilage. TiGenix has successfully completed a randomized Phase III clinical trial comparing ChondroCelect to the present standard-of-care surgical intervention called microfracture. The results of this study have formed the basis of a submission in the EU for regulatory approval which will be followed by a submission in the U.S. The results of this pivotal clinical trial have also been published in the February 2008 issue of the American Journal of Sports Medicine.
Forward-looking information
This document contains forward-looking statements and estimates with respect to the anticipated future performance of TiGenix and the market in which it operates. Certain of these statements, forecasts and estimates can be recognized by the use of words such as, without limitation, 'believes', 'anticipates', 'expects', 'intends', 'plans', 'seeks', 'estimates', 'may', 'will' and 'continue' and similar expressions. They include all matters that are not historical facts. Such statements, forecasts and estimates are based on various assumptions and assessments of known and unknown risks, uncertainties and other factors, which were deemed reasonable when made but may or may not prove to be correct. Actual events are difficult to predict and may depend upon factors that are beyond the Company's control. Therefore, actual results, the financial condition, performance or achievements of TiGenix, or industry results, may turn out to be materially different from any future results, performance or achievements expressed or implied by such statements, forecasts and estimates. Given these uncertainties, no representations are made as to the accuracy or fairness of such forward-looking statements, forecasts and estimates. Furthermore, forward-looking statements, forecasts and estimates only speak as of the date of the publication of this document. TiGenix disclaims any obligation to update any such forward-looking statement, forecast or estimates to reflect any change in the Company's expectations with regard thereto, or any change in events, conditions or circumstances on which any such statement, forecast or estimate is based, except to the extent required by Belgian law.
Business Highlights
Preparing for European launch of ChondroCelect
- ChondroCelect three-year clinical data analysis confirms clinical superiority
- EMEA registration procedure progressing
- CHMP opinion anticipated by end of H1 2009
- More than 500 patients treated with ChondroCelect to-date
Organization strengthened
- Move to new facilities
- Cell expansion facility obtained GMP status
- Commercial team almost complete for EU launch ChondroCelect
Progress in pipeline development
- EUR 3 million in grants awarded to support meniscus repair, stem cells and osteoarthritis programs
- Core patents granted in the US
Financial Highlights
- Cash and cash equivalents of more than EUR 25 million at year end
'Last year, TiGenix made excellent progress in positioning and pre-launching ChondroCelect as the gold standard in cartilage repair by showing clinical superiority over microfracture. In view of the positive long-term clinical benefit, we are more optimistic than ever about the prospects of ChondroCelect.' said Gil Beyen, CEO of TiGenix. 'With the anticipated European registration and subsequent commercial launch of ChondroCelect, 2009 will be a transformational year for TiGenix. The positive momentum created by these events is expected to provide additional opportunities to strengthen our leadership position in regenerative medicine.'
BUSINESS UPDATE 2008
Preparing for EU launch of ChondroCelect
In February 2008, TiGenix announced the publication of the positive results of the multi-centre, prospective, randomized, controlled clinical study confirming the structural superiority of ChondroCelect treatment compared with the current standard, microfracture treatment, over 12 months in the American Journal of Sports Medicine (AJSM), one of the highest ranked peer-reviewed journals for orthopedics and sports medicine. In this article1 it was concluded that 'the superior structural outcome may result in long-term clinical benefit', and that 'long-term follow up is needed to confirm these findings'.
The conclusions of the AJSM article were confirmed by the longitudinal statistical analysis of the three-year data of trial, demonstrating clinical superiority of ChondroCelect treatment over microfracture at 36 months. These important new results were presented at the October 31st meeting of the International Cartilage Repair Society (ICRS) in Miami, Florida, US.
With the demonstration of structural superiority at 12 months and superior clinical outcome at 36 months, TiGenix is confident that most important criteria have been fulfilled to obtain marketing approval for ChondroCelect in Europe. In the 4th quarter of 2008, further documentation on the product and process validation procedures was requested by the European regulatory authorities. The company is currently compiling this information for submission, and now expects the CHMP to issue an opinion on the marketing authorization for ChondroCelect still in H1 2009. Following a positive CHMP opinion, TiGenix expects formal marketing approval in the 3rd quarter of 2009, after which the product will be gradually launched in selected European countries.
Based on the long-term patient data and an in-depth analysis of the health-economic benefit of ChondroCelect, a Health Economic Dossier has been developed to support the reimbursement of the product in the target markets.
Since the start of the clinical development of the product, ChondroCelect has been administered to more than 500 patients in a combination of clinical trials and named patient programs in Belgium, Germany, the Netherlands and the U.K. The first patients have now been followed up for 7 years.
Upon approval, ChondroCelect will be the first cell-based product to receive a central marketing authorization for an advanced therapy medicinal product in Europe. On January 1st, 2009 the implementation of the new EU regulation on advanced therapy medicinal products has started. This new regulation stipulates that all cell-based products need central EMEA approval to be allowed on the market. For existing tissue engineered products a transition period is foreseen until end 2012.
Organization strengthened
In 2008, TiGenix has further strengthened its organization. In May 2008, the company moved to a new office and R&D building in Leuven, Belgium, in order to accommodate its expansion. TiGenix further has an option on additional space in the same building for expansion of the production in Europe. Meanwhile, TiGenix continues to evaluate alternative options for expanding its commercial cell production capacity for the European market.
TiGenix' pilot cell expansion facility in Leuven has successfully passed the Good Manufacturing Practices (GMP) inspection as part of the ongoing registration procedure for ChondroCelect. The Belgian Health Authorities have issued a GMP certificate, which will allow the commercial manufacturing of ChondroCelect upon marketing approval in Europe. This pilot facility has sufficient capacity to supply the European market with ChondroCelect for the near future.
The Sales and Marketing team has been further expanded. Patrick Haelterman, former Area Manager Nordics, Central and Eastern Europe at Abbott Vascular, has been appointed as VP Marketing and Sales Europe, regional business heads have been appointed for the major European regions and recently a responsible for reimbursement strategies has been appointed. With 11 people in Marketing and Sales, the commercial team is close to the adequate size for the launch of ChondroCelect in Europe.
Total headcount in the organization grew from 65 at the end of 2007 to 78 at the end of 2008.
Progress in pipeline development
The development of the next generation 3D product, combining ChondroCelect with a biocompatible and biodegradable matrix, is progressing. Product formulation and protocol development are ongoing in anticipation of the start of clinical development in the US. A decision on the European development track will be taken following the CHMP opinion.
In the meantime, TiGenix is pursuing the development work on its meniscus repair and stem cell programs. In 2008, TiGenix was awarded a total of EUR 3 million in grants to support these programs. A EUR 1.8 million grant was awarded by the Flemish government through the Institute for the Promotion of Innovation by Science and Technology (IWT) to support the development of novel cellular therapies for the treatment of damaged menisci. Earlier in the year, TiGenix was also awarded a EUR 1.2 million grant from the European Union's Seventh Framework Program for its participation in TREAT-OA, a leading research consortium focused on novel diagnostics and treatments for osteoarthritis.
In 2008, TiGenix' proprietary intellectual property position in the field of musculoskeletal diseases was reinforced through the issue of 3 US patents. Two US patents cover methods to determine novel functional and molecular parameters associated with mature cartilage-forming chondrocytes as well as the use of these parameters as quality control markers in chondrocyte transplantation. These claimed methods and markers form the basis for the process development and the quality control procedures used in the production of TiGenix' lead cartilage repair product ChondroCelect. The third US patent relates to the use of specific growth factors for the promotion of cartilage and bone formation for the local treatment of cartilage defects.
FINANCIAL RESULTS FOR 2008
Cash and cash equivalents of more than EUR 25 million at year end
The net decrease in cash and cash equivalents in 2008 was EUR 13.8 million.
The net cash used in operating activities of EUR 14.6 million consists of the operating result of EUR (16.5) million and total adjustments of EUR 2.0 million.
Since no commercial sales of ChondroCelect have yet taken place, the operating result is based on limited grant revenues of EUR 0.3 million and operating costs of EUR (16.8) million.
Total research and development costs for 2008 were EUR (10.0) million compared with EUR (8.1) million for 2007. This figure includes the cost of production. The increase of 23% is mainly attributable to the cost of production, both for obtaining the GMP certificate in Europe and making the cell expansion facility in the US fully operational. Furthermore, the additional experiments requested by EMEA as well as increase in personnel costs contributed to the increase.
Selling, general and administrative costs increased by 31% to EUR (6.8) million, mainly due to the pre-launch costs for ChondroCelect in Europe, together with the build up of personnel both in Marketing & Sales and in the Administration.
The total adjustments consist of non-cash items of EUR 1.6 million, other financial result of EUR 0.1 million and changes in working capital of EUR 0.2 million.
The net cash used in investing activities was EUR 0.3 million. The net cash used for investments of EUR 1.7 million, mainly the new R&D labs and offices in our headquarters in Leuven, was partially compensated by the EUR 1.4 million net interests received on the cash and cash equivalents.
The net cash provided by financing activities of EUR 1.0 million mainly consists of the net proceeds from the exercise of existing warrants.
TiGenix had a sound balance sheet structure with cash and cash equivalents of EUR 25.2 million as of December, 31 2008.
OUTLOOK
CHMP opinion for ChondroCelect
Approval and launch of ChondroCelect in selected European countries
Expansion of the cell manufacturing capacity in Europe
Filing of BLA for ChondroCelect in the US
Start clinical development of the next generation 3D product
For more information, please contact
Gil Beyen
Chief Executive Officer
+32 16 39 60 60 +32 16 39 60 63
+32 473 74 20 57
gil.beyen@tigenix.com
Kris Motmans
Corporate Communications
kris.motmans@tigenix.com
TiGenix NV Romeinse straat 12 bus 2 , 3001 Leuven, Belgium 0471.340.123 RPR Leuven tel +32 (16) 39 60 60
10/11
About TiGenix
TiGenix NV (Euronext: TIG) is a late-stage biomedical company that focuses on innovative local treatments for damaged and osteoarthritic joints. The Company is exploiting the power of regenerative medicine to develop durable treatments, validated through controlled clinical trials, for these indications. Based in Leuven, Belgium, TiGenix was founded as a spin-off from the Katholieke Universiteit Leuven and the Universiteit Gent.
TiGenix is developing a portfolio of products that address specific musculoskeletal problems. The lead indication among these is cartilage damage, which is a debilitating affliction affecting the mobility and functioning of patients. Western societies are characterized by ageing populations that place an increasing emphasis on high quality of life and life-long mobility, and, as such, cartilage problems represent a large and growing unmet medical need. Current therapies do not provide satisfying, long-term durable repair and TiGenix therefore believes there is a need for more effective treatments for cartilage damage.
About ChondroCelect (TGX001)
ChondroCelect® is the lead product for TiGenix that is in late stage development for applications in cartilage repair. ChondroCelect consists of characterized cultured chondrocytes derived from the patient's own cartilage and is used for autologous chondrocyte implantation (ACI), a surgical procedure to treat cartilage defects. Cartilage defects of the knee are very common, and the spontaneous healing capacity of cartilage is limited. The objective of the ChondroCelect technology is to facilitate the regeneration of hyaline-like cartilage that more closely approximates the structure of healthy normal cartilage. TiGenix has successfully completed a randomized Phase III clinical trial comparing ChondroCelect to the present standard-of-care surgical intervention called microfracture. The results of this study have formed the basis of a submission in the EU for regulatory approval which will be followed by a submission in the U.S. The results of this pivotal clinical trial have also been published in the February 2008 issue of the American Journal of Sports Medicine.
Forward-looking information
This document contains forward-looking statements and estimates with respect to the anticipated future performance of TiGenix and the market in which it operates. Certain of these statements, forecasts and estimates can be recognized by the use of words such as, without limitation, 'believes', 'anticipates', 'expects', 'intends', 'plans', 'seeks', 'estimates', 'may', 'will' and 'continue' and similar expressions. They include all matters that are not historical facts. Such statements, forecasts and estimates are based on various assumptions and assessments of known and unknown risks, uncertainties and other factors, which were deemed reasonable when made but may or may not prove to be correct. Actual events are difficult to predict and may depend upon factors that are beyond the Company's control. Therefore, actual results, the financial condition, performance or achievements of TiGenix, or industry results, may turn out to be materially different from any future results, performance or achievements expressed or implied by such statements, forecasts and estimates. Given these uncertainties, no representations are made as to the accuracy or fairness of such forward-looking statements, forecasts and estimates. Furthermore, forward-looking statements, forecasts and estimates only speak as of the date of the publication of this document. TiGenix disclaims any obligation to update any such forward-looking statement, forecast or estimates to reflect any change in the Company's expectations with regard thereto, or any change in events, conditions or circumstances on which any such statement, forecast or estimate is based, except to the extent required by Belgian law.
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