Digg It - Business

Selling a business and achieving liquidity is likely to be the single most important financial event for a private busines

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

s owner. Timing is perhaps the most critical factor to securing maximum value in the sale of a business.

Typically there

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

Examples of combination products may in

re three different types of timing associated in the sale of a business: seller timing, buyer timing, and market timing.

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

Examples of each are provided below:

Key Factors that Drive Timing

Seller Factors:
Lack of capital
Growth b

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

yond comfort level
Boredom / burnout
Other interests

Market Factors:
Favorable economic climate
L

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

Combination pro

ow interest rates
Advantageous tax treatment
Government regulatory changes

Buyer Factors:
Meeting growt

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

expectations
Slow organic growth
Increasing competitive pressures
Diminishing market share
Global

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

ization of industry

While numerous factors may drive a seller to seek immediate liquidity in their business, unfortunatel

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

, the needs of the buyer and the conditions of the market ultimately dictate timing and value

Determinants of market timi

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

ng

• Market timing is critical when evaluating the right time to sell a business. The economic climate, interest rates an

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

the tax and regulatory environment all impact timing.

• Interest rates are at historically low levels, reducing required

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

Following aspects would a

rates of return on investment (“ROI”) for premium buyers of companies. Lower required ROIs allow premium buyers to pay mor

dd to the challenges in developing combination products:

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

e for acquisitions than ever before.

• Low long-term capital gains tax rates are allowing sellers to retain more value th

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

n ever before. Currently, a seller can enjoy a 15% long-term capital gains tax rate (the lowest in history).

Determinants

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

of buyer timing

• Public company premium buyers are pressured by Wall Street to meet revenue growth and earnings expecta

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

ions. These buyers therefore actively monitor buying opportunities in order to rapidly improve upon limitations or weaknes

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

Professional from academic institutions, pharmaceutical industries, health care indust

ses in their businesses. Premium buyers purchase companies to increase market share, expand geographically, acquire new pr

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

ducts and gain competitive advantages.

• Favorable accounting treatment for European buyers ending in 2005 has spurred cr

.

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

oss-border M&A, driving up values for businesses and forcing U.S. buyers to match European offers in order to compete effe

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

Companies that provide selfless information through particip

tively.

Understanding and taking advantage of timing will ultimately lead to highest possible valuation for your business

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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This article begins an inquiry into what I call most-managers. These are the 2nd Lieutenants of business. They are promoted from within and are untrained. This begins an authentic inquiry into the practice of management - even in 'good' companies.

If you're a Christian, should you look for a job differently? How should that impact your resume? You might be surprised at the answer.

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