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Paperwork, specifically legal documents, is a prerequisite to buying any business. It doesn’t make any difference if you buy a business once in your life or do it all the time, every business acquisition purchase contract is different and requires intense scrutiny on the part of the business buyer, much more so than the business

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

seller.

As a business buyer, each and every sentence within the business purchase contract needs to be read, understood and agreed to before you sign on the “dotted line”. This article will give the business buyer a quick “fly-over ”of the most significant concepts one should understand relative to development and eventual exe

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

Examples of combination products may in

cution of any business purchase contract.

“He Who Writes, Wins!”

If you have been consistently exposed to business contracts in your career, you quickly learn to appreciate the concept that, in development of most complex business agreements, “He who writes, wins!” Any attorney will tell you that it is always in his, his client

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

s, best interest to be the author of the business contract to be signed in a two party agreement. As a business buyer, you want to be the writer of the purchase contact. If you personally cannot effectively write one, invest the money and have a competent contract lawyer write a purchase contract on your behalf. If the business

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

seller, or their legal counsel writes the business purchase contract be sure you and your attorney evaluate every detail within.

Always Maintain a “Paper Trail”

Given the extraordinary amount of capital involved in most business mergers or acquisitions, coupled with the wide range of people, conversations, meetings and iterativ

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

Combination pro

business evaluation steps involved to effectively buy a business, it is imperative for the business buyer to maintain ongoing, copious notes of all related events and communication exchanged between themselves and the business seller or their designated representative, throughout the purchase process.

There are three significa

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

nt advantages for the business buyer in maintaining a paper trail of notes during the purchase process: 1) All key agreement points can be traced to a specific buyer/ seller conversation, 2) If something is written, it can be improved upon by either party, if it is not documented, the likelihood of refining the content is signif

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

icantly reduced, 3) Sometimes related records can be incorporated into the final business purchase contract as an addendum or attached exhibit

“Buyer Beware!”

As a business buyer, you like to think that all business sellers are honest, forthright and have genuine intentions of developing a mutually beneficial business purchase

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

ontract. Most business sellers are! However, like in any complex asset purchase agreement, neither party knows what negative future consequences may surface in the ownership of the sold asset. More often than not, in a business purchase contract, it’s the business buyer who exclusively must address the problem not thought of or

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

included in the final purchase contract. The negative consequences of many common business misfortunes can be reduced, shared between the business buyer and seller, or eliminated altogether with proper business purchase contract contingency language

Fundamental Business Purchase Contract Concepts

Listed below are some fundamen

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

al business purchase contract concepts that any prudent business buyer will want to incorporate in their legal due diligence and documentation fulfillment:

Astute business buyers never present an offer to purchase a business without preceding it with a nonbinding “Letter of Intent” to purchase. (If you are not familiar with the

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

Following aspects would a

purpose or advantages of use of a “LOI”, you must research this topic)

Never make a purchase offer and certainly never sign a purchase offer or make an earnest money deposit until after you completed most of the due diligence required to effectively evaluate the business for sale.

No business purchase terms should ever be com

dd to the challenges in developing combination products:

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

municated to the business seller without a written statement from the business buyer to the seller, specifically documenting, “that any, and all, purchase terms are subject to analysis, justification and confirmation by an independent business appraisal entity, employed and paid by the business buyer”.

Be suspect of “canned” bu

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

iness purchase contracts provided by the seller’s broker or representative, they are typically “seller biased”

Be sure to negotiate a reasonable time period to evaluate and approve all documents provided to you from the business seller or their representative for your required due diligence

Invest in an environmental analysis

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

of the business premises and keep the business seller “on the hook” for any future environmental $ penalties or negative consequences realized as a result any documented negative environmental conditions made prior to the sale of the business

If something does not make sense to you, ask, make sure you understand every detail

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

tilize all the expertise available to you from your intended primary lender on the deal

If there are noteworthy levels of inventory and assets involved, inspect each item and use credible valuation expertise to determine approximate market value. This can represent significant dollars to you in the future as the business owner.

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

Professional from academic institutions, pharmaceutical industries, health care indust

All current legal encumbrances or extraordinary liabilities should remain the responsibility of the business seller

Any discovered misrepresentations associated with documents provided by the seller or their designated representative to the business buyer, that surface in the future operation of the business should remain “fa

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

ir game” for financial resolution, from the seller to the buyer, post purchase

All records provided by the seller or their designated representative, to the business buyer should become an purchase contract addendum or exhibit and be subject to seller warranty of accuracy

Lastly, there are published business purchase contract

.

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

content “checklists” available, take the time to review these, especially business seller warranties and representations

Typical business purchase contracts prepared by business sellers or their representatives often contain many provisions which are dangerous to business buyers. In many cases it is not what is written that is

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

Companies that provide selfless information through particip

of greatest concern, it is what is omitted that represents a potential time bomb that will eventually explode long after the business seller has left town with your money. Take the time, invest the money, expend the necessary thought required to structure a mutually beneficial business purchase agreement with the business seller

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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