Publication date: 06/04/2017
TiGenix NV (Euronext Brussels and NASDAQ: TIG), an advanced biopharmaceutical company developing and commercializing novel therapeutics which exploit the anti-inflammatory properties of allogeneic, or donor-derived, stem cells, today reported its business and financial highlights for 2016 and post year-end events.
Key 2016 and post year-end highlights:
• Cx601 reached significant value inflection points in Europe and the U.S.
• Strong relationship with Takeda Pharmaceuticals
• Continued progress with pipeline
• Strong cash position at December 31, 2016 of EUR 78.0 million, due to:
• Strategic appointments
"The past year has been truly transformational for TiGenix. We have reached the final phase before our first allogeneic product potentially enters the market in Europe, published our positive Phase III data in The Lancet[i], signed a major licensing deal with a world-class partner, raised substantial funds and advanced our pipeline," said Eduardo Bravo, CEO of TiGenix. "I am proud of what has been achieved and enormously excited about the rest of the year, including taking the next steps in developing Cx601 for the U.S. market and in further indications."
Cx601 reached major value inflection points
2016 has been an extraordinary year for TiGenix as we continue the transformation of the company to focus on products from our allogeneic stem cell platforms. Our most advanced product, Cx601, reached significant major value inflection points and the vision of bringing this innovative medicine to patients suffering a severe, debilitating complication of Crohn's disease has become tangible with the signing of an exclusive licensing agreement for the development and commercialization of Cx601 outside the U.S. with Takeda, a world leader in gastroenterology.
In July, TiGenix received a payment of EUR 25.0 million upon signing the licensing agreement with Takeda. TiGenix is eligible to receive additional regulatory and sales milestone payments for up to a potential total of EUR 355.0 million and double digit royalties on net sales. In addition to these financial benefits, we believe the partnership with Takeda has increased the probability of commercial success by drawing on the reimbursement and commercial expertise of one of the leaders in the gastroenterology field.
Since signing of the licensing agreement, Takeda has made an additional equity investment of EUR 10.0 million in the share capital of TiGenix, has exercised the option to develop and commercialize Cx601 in both Japan and Canada, and has launched a series of key activities to ensure the timely launch of Cx601 as soon as the marketing approval is obtained.
Cx601 has continued to produce impressive results following the meeting of the primary endpoint at week 24. The positive 24-week results were presented at the two major congresses for gastrointestinal specialists on both sides of the Atlantic and published in The Lanceti, one of the most reputable peer reviewed publications in the scientific community. In March 2016, TiGenix announced positive follow-up results at 52 weeks for Cx601, confirming its sustained efficacy and safety profile. A single administration of Cx601 was statistically superior to control (placebo) in achieving combined remission at week 52, in line with the primary endpoint results at week 24. In March 2017, Cx601 delivered positive follow-up results at 104 weeks, confirming its long-term safety and efficacy profile.
In March 2016, TiGenix filed a centralized European MAA for Cx601. In March 2017, we received the Day 180 List of Outstanding Issues from the CHMP. Having reviewed the LoOI, we remain confident that Cx601 is on track to receive Marketing Authorization. A CHMP opinion and decision by the European Commission is expected in 2017 and upon obtaining the Marketing Authorization, TiGenix is eligible to receive from Takeda a EUR 15.0 million milestone payment. The path to European commercialization was also further advanced in October 2016 when Cx601 was granted Orphan Drug Designation (ODD) in Switzerland.
In parallel to the progress in Europe, we have been advancing our program to bring Cx601 to U.S. patients. In January 2017, the FDA agreed to an improved protocol for the global Phase III trial of Cx601, which has now been formally endorsed by a new SPA. With these amendments, the FDA has agreed that a Biologics License Application (BLA) could be filed based on the efficacy and safety follow-up of patients assessed at week 24, instead of week 52. Furthermore, the FDA has agreed to accept fewer patients than originally planned in the study, and has endorsed a broader target population that will ultimately facilitate the recruitment process. With these adjustments, the study will benefit from an expedited recruitment process that should lead to shorter timelines, an earlier filing, and the possibility of an earlier approval in the U.S. As a result of these modifications, the trial design is even more similar to the European ADMIRE-CD than before.
The global pivotal Phase III trial for the U.S. registration of Cx601 is expected to begin in the first half of 2017. In parallel, TiGenix is exploring further expedited pathways to accelerate the submission and review process for its future BLA.
Progress with pipeline
In June 2016, TiGenix announced preliminary interim six-month results for the Phase I/II (CAREMI) study of AlloCSC-01 in Acute Myocardial Infarction (AMI) and in March 2017 announced the top-line results of the study. CAREMI is the first-in-human clinical trial with the primary objective being safety and evaluating the feasibility of an intracoronary infusion of AlloCSCs in patients with AMI and left ventricular dysfunction treated within the first week post-AMI. Importantly, the trial is the first cardiac stem cell study to integrate a highly discriminatory magnetic resonance imaging (MRI) strategy to select patients at increased risk of heart failure and late adverse outcomes. CAREMI was not powered to establish efficacy therefore no conclusion can be drawn on the secondary efficacy end-points.
All safety objectives of the study have been met. No mortality or major cardiac adverse events (MACE) have been found at 30 days meeting the primary end-point of the study. Moreover neither mortality nor MACE have been found at 6 months or 12 months follow-up. Of particular relevance to this allogeneic approach, no immune-related adverse events have been recorded at one-year follow-up. A larger reduction in infarct size was found in one pre-specified subgroup associated with poor long-term prognosis which represents more than half of the patient population of the randomization phase of the study. This finding has revealed valuable insight, and provides a specific direction for potential studies in a targeted subset of high-risk patients and we expect to announce next steps in the development of AlloCSC-01 later in 2017.
Cx611, our second eASC-based product candidate, is a potential first-in-class intravenous injectable allogeneic (or donor derived) stem cell therapy intended for the treatment of severe sepsis, a major cause of mortality in the developed world. We believe that Cx611 represents a highly innovative potential treatment for this indication. The Phase I/II SEPCELL study was launched in the second half of 2016 and the first patient was dosed in January 2017. Data is expected to be available in 2019.
In July, 2016, TiGenix announced the initiation of the withdrawal of the marketing authorization for ChondroCelect. TiGenix decided to initiate the withdrawal process for commercial reasons. After the effective day, November 30, 2016, TiGenix no longer expects to generate any revenues from this product. Ultimately, this decision is in line with TiGenix's strategy to concentrate its resources and capabilities on its allogeneic stem cell platforms.
In September 2016 TiGenix announced the appointment of Dr. June Almenoff as an independent director. June Almenoff MD, PhD has more than 20 years' pharmaceutical industry experience including leading the process towards FDA approval for a GI product, broad experience in clinical development, scientific licensing and business development, an expertise in infectious diseases, and a clear focus on the U.S. market.
Financial highlights for 2016
Key figures for the full year 2016 (consolidated)
Revenues for 2016 amounted to EUR 26.8 million, compared to EUR 2.2 million in 2015. The increase is mainly driven by License revenues obtained from the licensing agreement signed in July 2016 with Takeda. The decrease in Royalties and Grants and other operating income during the year is due to the withdrawal of the marketing authorization of ChondroCelect for commercial reasons.
Total operating charges for 2016 amounted to EUR 29.8 million, compared to EUR 26.3 million in 2015. The increase is mainly due to the increase in Research and Development expenses, driven by Cx601 clinical development progress (including U.S. Cx601 clinical start-up activities), the clinical activities related to the Cx611 Phase I/II clinical trial in severe sepsis (SEPCELL) and those related to the AlloCSC-01 Phase I/II in AMI (CAREMI). General and Administrative expenses increased to EUR 8.4 million from EUR 6.7 million in 2015 mainly driven by the expenses related to the Nasdaq IPO.
As a result of the above, the operating loss decreased in 2016 to EUR 3.0 million, from EUR 24.1 million in 2015.
The Interest on borrowings and other finance costs for 2016 amounted to EUR 7.3 million. These costs include both cash financial expenditures (for EUR 3.5 million) and non-cash financial expenditures resulting mainly from the recording of the financial liabilities at amortized cost (Kreos loan, the ordinary note component of the convertible bonds and the governmental loans). The fair value gains for 2016 amounted to EUR 11.6 million. These gains include non-cash income resulting from the change in the fair value of the warrant component of the convertible bonds (mainly as a result of the lower share price at year-end 2016 compared to the share price at year-end 2015) and the warrants issued for the Kreos loan. Income tax benefits amounted to EUR 2.1 million and refer to the tax deductions under Spanish tax law obtained from R&D activities.
As a result of the above, the profit for the year 2016 amounted to EUR 3.8 million compared to a loss of EUR 35.1 million in 2015.
Cash and cash equivalents amounted to EUR 78.0 million on December 31, 2016. We end the year in a strong financial position following the equity raise of EUR 23.8 million in March 2016 with marquee investors, upfront cash payment of EUR 25.0 million from the Takeda deal in July 2016, EUR 10.0 million of equity investment from Takeda in December and EUR 34.1 million (USD 35.7 million) raised with the Nasdaq IPO. Net cash provided by operating activities in 2016 amounted to EUR 3.5 million.
Outlook for the rest of 2017
The statutory auditor of the Company, BDO Bedrijfsrevisoren Burg. Ven. CBVA, has completed its audit of the financial statements of the Company for the year ended on 31 December 2016 and issued an unqualified audit opinion. The auditor's report on the consolidated financial statements can be found in the Newsroom section of the TiGenix website, www.tigenix.com, on or around 6 April 2017.
The financial statements for the year ended 31 December 2016 can be found in the Newsroom section of the TiGenix website, www.tigenix.com. TiGenix will publish its audited Annual Report for the year ended 31 December 2016 via the Company's website on or around 6 April 2017.
More info: http://www.tigenix.com/