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A reverse merger, also referred to as a reverse takeover, is a business transaction t

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

hat converts a private company into a public company without having to go through the

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

Examples of combination products may in

traditional paperwork and initial public offering processes. A reverse merger starts

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

by a privately held company establishing a public shell company. The shareholders of

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

he private company then sell their shares in the private company to the public shell

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

Combination pro

ompany for shares in the public company. By going public in this manner the sharehold

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

ers of the private company are able to maintain their ownership and control of the co

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

pany after it goes public.

There are many reasons why private companies go public. T

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

e first reason is that it gives them more financing options to choose from. To raise

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

money a public company can offer investors a secondary stock offer or they can exerci

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

e warrants. In addition to providing the company with additional funding opportunitie

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

Following aspects would a

going public also has many other business benefits. First it increases the liquidity

dd to the challenges in developing combination products:

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

of the company’s stock, secondly it allows the valuation of the company to increase

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

ased on the performance of the stock, next it allows the company to acquire other com

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

anies via stock transactions and finally it allows the company to attract new employe

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

es by offering stock incentives.

There are several ways reverse merger funding can b

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

Professional from academic institutions, pharmaceutical industries, health care indust

accomplished. The first way is through an all shares deal. This funding process basi

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

ally uses company shares to complete mergers and acquisitions. The second method of f

.

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

unding reverse mergers is to use cash. The final method is to use a combination of ca

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

Companies that provide selfless information through particip

h and company shares to finance the transactions needed for the merger or acquisition

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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