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What do you think of when you hear the word bank? The thought probably has nothing to do with anything enjoyable. If you were to ask any business professional the first word that comes to mind, it would

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

most likely be a provider of debt or money. When I hear the word bank, I think of vendor. I wish I could see the jaws drop on the people reading this excerpt. A vendor? What is this guy talking about?

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

Examples of combination products may in

Before you drop my idea all together let me explain what I mean when I say: Your bank could probably become your best vendor.

Every business owner deals with vendors on a daily basis. The better vend

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

rs in the industry will not only provide goods or services to your business, but will also provide you with technical assistance or expertise in their field. This is how you should view your “money vendo

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

.” Which bank provides you with the best service and technical support around? Here are some thoughts when choosing your next money vendor.

Size. There are huge banks, big banks, regional banks

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

Combination pro

nd local banks. Most of your local banks are focused on the local community and are limited to the amount of money they can lend to any one customer. Some have some very seasoned lenders who can be very

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

helpful in providing technical advise. The larger banks have the traditional type of lenders, but can also have specialists for specific industries. If you need $25 million or more in financing, you wi

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

l need a regional or larger bank. Most large banks are also training grounds for younger lenders, which means it may take some work to find a more seasoned technical assistant.

Rates. Although

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

ou might think that all banks are created equal, they are not. You might think that the big bank with huge deposits can give you the best rate, which is sometimes “true.” You might think that the smalle

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

bank with smaller deposits would charge a higher rate, which is sometimes “not true.” Rates are based mostly on: 1) the historic financial performance of your company: free cash flow, debt to worth ra

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

io, debt service ability, current ratio, collateral value and the advance rates on current assets (accounts receivable and inventory) and 2) how aggressive the bank is looking for loans. The biggest earn

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

Following aspects would a

ing asset the bank has is its loans. So, if their loans are down, the bank can be more aggressive in funding new borrowers. This increases their outstanding loans so they can earn more money.

Loan S

dd to the challenges in developing combination products:

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

ecialty. Many banks have developed a comfort or specialty for certain types of business loans. Some banks understand real estate very well and would rather not make an equipment or inventory loan.

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

In those types of situations, if you need a piece of equipment or inventory financed and you have real estate that can be leveraged, you can probably get the loan you need. Some banks would rather do sh

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

rt term financing and use your accounts receivable as collateral. Others really specialize in consumer financing (cars, boats, home equity lines of credit, etc.), but they don’t tell you that in their li

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

erature. It is much easier to obtain financing from a lender who understands your business, likes your collateral, and your proposed financing strategy, than one who disregards your needs to fit their po

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

Professional from academic institutions, pharmaceutical industries, health care indust

rtfolio requirements.

Relationship. Probably the most important factor in finding a good money vendor is finding a banking officer that is relationship orientated and technically competent. Most

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

seasoned bankers have a wealth of experience and can give you valuable insight into your business, from a non-biased, financial point of view. Invite them out to your business, take them to lunch, and ma

.

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

e them your friend. There are hundreds of banks and thousands of bankers. You can find one that has the expertise and interest in your business. It just might take a little work; but it is well worth i

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

Companies that provide selfless information through particip

.

The Bottom Line. Focus on the relationship factor first and then work backwards. The work you put into picking your “money vendor” in the front end will pay you large dividends in the back end

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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