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Many of today’s new ventures, particularly Internet startups with their enormous cash requirements, high risk, and high potential return, require approaching the ven

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

ture capital marketplace. Venture capital investors are difficult to characterize, but we can discuss what venture capital firms generally look for when they analyze

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

Examples of combination products may in

a company and its proposal for investment.

What Venture Capital Firms Look For

One way of explaining the different ways in which banks and venture capital firms e

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

valuate a small business seeking funds, is expressed by LaRue Hosmer as: "Banks look at its immediate future, but are most heavily influenced by its past. Venture ca

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

italists look to its longer run future."

Venture capital firms and individuals are interested in many of the same factors that influence bankers in their analysis o

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

Combination pro

f loan applications from smaller companies. All financial people want to know the results and ratios of past operations, the amount and intended use of the needed fu

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

nds, and the earnings and financial condition of future projections.

Banks are creditors. They look for assurance that the business service or product can provide s

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

teady sales and generate sufficient cash flow to repay a loan. Venture capital firms are owners. They hold stock in the company, investing only in firms they believe

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

can rapidly increase sales and generate substantial profits.

Venture capital is a risky business, because it's difficult to judge the worth of early stage companies

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

. So most venture capital firms set rigorous policies for venture proposal size, maturity of the seeking company, requirements and evaluation procedures to reduce ri

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

sks, since their investments are unprotected in the event of failure.

Size of the Venture Proposal

Few venture capital firms are interested in investment projects

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

Following aspects would a

of less than $1,000,000, and this threshold is even higher for the major firms. Projects requiring less are of limited interest because of the high cost of investiga

dd to the challenges in developing combination products:

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

ion and administration.

The typical VC firm will quickly reject on the order of 90% of the proposals received, because they don't fit the established geographical,

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

technical, or market area policies of the firm, or because they have been poorly prepared. The remaining plans are investigated with care. These investigations are c

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

ostly, and generally reduce the candidate pool even further.

Maturity of the Firm Making the Proposal.

Most venture capital firms' investment interest is limited 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

o projects proposed by companies with some operating history, even though they may not yet have shown a profit. Companies that can expand into a new product line or

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

Professional from academic institutions, pharmaceutical industries, health care indust

new market with additional funds are particularly interesting.

Companies that are just starting or that have serious financial difficulties may interest some ventu

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

re capitalists, if the potential for significant gain over the long run can be identified and assessed. If the venture firm already has a large risk concentration, t

.

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

hey may be reluctant to invest in these areas.

A small number of venture firms specialize in "start-up" financing. The small firm that has a well thought-out plan a

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

Companies that provide selfless information through particip

nd can demonstrate that its management group has an outstanding record (even if it is with other companies) has a decided edge in acquiring this kind of seed capital

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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