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If you were thinking of making an investment it might be a good idea to watch how Warren Buffet does it. If you are going to sell

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

your business, maybe you should emulate Sam Zell, multibillionaire founder of Equity Residential (EQR). He is selling his compan

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

in one of the largest private equity deals ever.

Sam agreed to take an initial offer from Blackrock Private Equity at $48 per s

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

are with a break-up fee of $500 million. EQR has 292.13 million shares outstanding, resulting in a total bid of $14.02 billion. T

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

is is where most privately held business owners stop. They put the word out through their professional network, get an introducti

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

n to an owner of another related business, and begin the process. If they get an offer, it is low and is driven down during the d

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

e diligence process because there is nothing to stop this behavior from a single buyer.

Back to Sam Zell. Sam tells his investme

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

nt bankers to continue to solicit more buyers. Surprise, enter Vornado with the backing of a couple of very large private equity

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

ompetitors of Blackrock. Their first counter offer is $52 per share. It goes back and forth with these heavyweights slugging it o

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

t. When I last checked, Blackrock had increased their bid to $56.35 per share, making the total bid $16.46 billion. That is an in

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

rease of $2.44 billion over the initial bid.

We tell our clients that a competitive bid will produce a 20% premium or more over

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

single bid. In the case of a single non-solicited bid, the differences can be much greater. This one sits at a 17% premium over

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

he initial offer. The process will net the shareholders about an additional $2.5 billion.

What can we learn here? Blackrock is

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

very smart buyer. They were trying to buy at a bargain. When they made their first offer they knew exactly what EQR was worth. S

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

am Zell is a very smart businessman. He knew that getting multiple buyers involved is the only way to maximize the sale proceeds

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

or himself and his shareholders.

If you are a business owner and are approached by a buyer, do not think that your lawyer or acc

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

untant is going to do for you what the investment bankers did for Sam Zell. They will not contact hundreds of potential buyers an

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

create the soft auction required to drive up your selling price.

Don't get me wrong. Your attorney and your CPA will play criti

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

al roles in your business sale with their contract work and accounting work. However, the role of your investment banker or merge

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

and acquisition advisor is to bring the right buyers to the table and then assist them is seeing the full value for your company

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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You think you have an idea how to run a restaurant? Think again. Make sure you have all your tools ready for for all matters concerning restaurant and how to manage it.

It is also interesting to note that we are now subjected to messages that not only extol the virtues of branded products, they even go so far as to make a point that certain companies do not make own-label, to justify their premium pricing. You have to take your hat off to the ad man who came up with that little gem of building a campaign out of that one. Sadly, for the client, the horse had already bolted. But the ad men, as usual, were pocketing their fees and laughing all the way to the bank! It is no surprise then that with more and more competition, now including own label, there has been a significant increase in the number of advertisements, vying for customers’ attention. So, more competition in the marketplace and more competition to attract the viewer/reader to engage with the message, so what’s the solution?

Why do some people love what they do while others hate it? Have you ever had a job that you hated, while a coworker love the same job?

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