Advice You - Business

For some, planning a business exit can be a predictable, methodical process. We know the competition; we understand market demands, know when we want to sell and might even know the actual date. Bu

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

t for far too many business owners, the business exit comes as a harsh reality and often unplanned event.

Protecting your business and assets against the dreaded six D’s of an unplanned business e

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

Examples of combination products may in

xit can give whole new meaning to the term “Disaster Management”. While every business may experience unexpected pitfalls, careful planning to ensure risk exposure is minimized can assist in keepi

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

ng you in the driver’s seat when it comes to managing your company. Familiarize yourself with the six D’s of an unplanned business exit: debt, death, disability, divorce, departure and disaster. Kn

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

w the enemy and look to address all six D’s in your operating and buy / sell agreements.

The Six D's of an Unplanned Business Exit

Debt: No one goes into business and plans on it

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

Combination pro

not succeeding, but 40,000 businesses fail every month in the United States. When debt exceeds revenue, it is critical to exit timely in order to minimize loses. Understanding limitations and prot

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

ecting critical assets are key to successful divesture.

Death: Many businesses are solely dependant on their owner’s abilities, relationships, and passion to drive success, and when there is a dea

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

th of an owner or partner of a business, it can have significant impact to a business almost immediately. While no one wants to consider their own demise, the strength and longevity of a business r

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

lies on being able to plan for such a critical loss even if it means downsizing or reorganization. The survival of a business in relation to key individuals needs to be evaluated and exit strategi

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

es planned accordingly.

Disability: Unbelievably, death is not as likely to end the business as a disability. A disability to a business partner can put a significant drain on cash flow, daily wor

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

kloads, and excess down time, all of which can be devastating. Insurance and financial planning towards alleviating such an impact needs to be carefully evaluated especially when dealing with small

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

Following aspects would a

business start ups where funding and resources are limited.

Divorce: No one wants to plan for a business or personal divorce, yet while Pre-nuptial agreements may be gaining in popularity many pe

dd to the challenges in developing combination products:

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

ple never look to manage such impact to their businesses. What happens when the partners cannot get along? Or worse, you inherit another partner due to a personal divorce settlement? Exiting the bu

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

siness might be the only alternative you are provided.

Departure: It does not sound as bad as death, but it can wreak the same results. A partner, key employees, or other resources decide to go to

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

the competition, retire, burn out, or win the lotto. When they leave, how does this impact your business going forward?

Disaster: If the five D’s above where not enough to impact your business, t

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

here are no limit to the other disasters that may occur that were never planned on: robbery, sickness, employee theft, employee turnover, natural devastating events, etc. In today’s post Katrina,

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

Professional from academic institutions, pharmaceutical industries, health care indust

11 world the impact of the chaos theory is enough to keep even the best business minds awake at night. Plan for the worst; strive for the best and know when to get out if need be.

For the typical

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

business owner, each one of the six D’s has special demands on the family, income, taxes, and control of assets. An agreement, commonly called buy/sell agreements, can be used to plan for the impa

.

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

ct associated with the dreaded six D's. A successful sustaining business exists as a separate entity from personal concerns and risk can be reduced by developing mutually fair and equitable agreeme

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

Companies that provide selfless information through particip

nts prior to these events occurring.

Business is an evolution and travels a diverse path. While some may look on an unplanned exit as a failure others may see an opportunity for growth and freedom

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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Advice You - The Unplanned Business Exit

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