TiGenix Clinical Trial: On Track

TiGenix (TIG.BR) has made good progress in developing its EU stem cell business. The Dutch healthcare system now fully reimburses ChondroCelect enabling TiGenix to invest in marketing and product support into Holland. The crucial Cx601 study in perianal fistulas started on 10 July as expected. The Cx621 safety study showed that intralymphatic groin injection of adipose stem cells was safe and well tolerated. A US partner on Cx601 may be agreed in H212-H113.


Dutch reimbursement important step forward
ChondroCelect produces higher-quality cartilage than other procedures with five-year clinical superiority over microfracture. The Dutch National Health Authority allowed full reimbursement for ChondroCelect implants done from January 2012. Other countries will presumably come to the same conclusions but the timing of these is uncertain; at least one more may do so in 2012. The ATMP regulations might drive cheaper cell-based products from the EU market in 2013, but this is not certain. Edison expects ChondroCelect implant sales of 180 in FY12 and over 450 in FY13.

Cx601 enters pivotal study, Cx621 procedure safe
Cx601 is injected directly into Crohn’s perianal fistula tracts to cut inflammation and aid healing. Phase III recruitment started on 10 July. About 120,000 patients in the EU and US have fistulas; 60% respond poorly to therapy. With direct EU sales from 2016 plus an anticipated US partner, Cx601 could be highly lucrative. The Cx621 safety study on inguinal (groin) lymph-node injection reported on 2 July. None of the 10 patients experienced any side effects and the procedure was well tolerated. Injection was guided by echographic imaging, but, in practice, administration can be done direct by experienced physicians. Intralymphatic injection could enable lower doses (5m cells) and more effective therapy for autoimmune diseases.

Valuation: Break-even on ChondroCelect, value on Cx601
Edison assumes profitability by 2015 if over 1,675 ChondroCelect implants are sold at about €18k each. Adding direct Cx601 EU sales from 2016 (55% probability) plus sales by the anticipated US partner from 2017 (45% probability) gives an indicative value on rDCF (at 12.5%) of €2.33 per share or €205m. An alternative 1,000 implant sales scenario indicates €1.70 per share. TiGenix is funded into 2013, assuming ChondroCelect unit sales of 200-250 in 2012, but may need up to €4m from non-dilutive funding to realise Cx611 (autoimmune cellular therapy) clinical goals and move further funding into 2014.

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