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Cases - Private Equity Deals Offer Alternate Exits to IPOs
WSJ article "IPO Obstacles Hinder Startups" offers a good coverage of how IPOs are becoming to
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
ugher for small venture-backed companies.
This raises the question, what should CEOs and earl
This raises the question, what should CEOs and earl
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
y-stage VCs do, once a company has reached $100 M+ in annual sales? (Below this threshhold, it
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
is absolutely undesirable to go public; investor courting, ongoing investor management, Sarba
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
nes-Oaxley compliance related paperwork and massive expenses - being some key distractors ...)
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
In general, by year 5 or year 6 in a company’s history, the Series A investors, the Founders
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
, and the early executive team that is still around - get itchy to extract some liquidity. Tod
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
ay, given the sophistication, the available money, and the level of activity in the Private Eq
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
uity industry, a late-stage / LBO fund could easily step in and provide the necessary liquidit
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
y.
Liquidity, I believe, is no reason to go public prematurely. An enterprise that has built-
Liquidity, I believe, is no reason to go public prematurely. An enterprise that has built-
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
in scalability should stay private, stay on course, and execute, execute, execute. If, however
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
, the business does NOT have built-in scalability - and most don’t - they should absolutely NE
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
VER go public. They should get acquired, and become part of a larger portfolio.
Last year, 41
Last year, 41
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
start-ups backed by venture-capital investors became publicly traded U.S. companies, down fro
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
m 67 in 2004 and 250 in the boom year of 1999, according to research firm VentureOne.
I would
I would
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
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
say, the recent numbers are much closer to what they should be.
After all, how many enterpri
After all, how many enterpri
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
ses really have built-in scalability in their business model?
Most companies simply go public
Most companies simply go public
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
and then struggle, giving smart investors absolutely no reason to touch them, and hence, givi
.
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
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
ng analysts no incentive to cover them!
Rather, a secondary exit market for private placement
Rather, a secondary exit market for private placement
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
s of a chunk of the company’s shares held by early shareholders - is a far better alternative.
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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