Main Subject - Finance

The word “hot” has over forty different meanings, according to the Merriam-Webster Online Dictionary. As used in this article, the word “hot” is used to mean: “6 a : of intense and immediate interest (some hot gossip) b : unusually lucky or favorable (on a hot streak) c : temporarily capable of

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

unusual performance (as in a sport) d : currently popular or in demand (a hot commodity) e : very good (a hot idea)”. The words eager, zealous and fresh are second place synonyms for the hot idea of accounts receivable financing.

When a B2B business suddenly needs financing fast, it is hot. It i

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

Examples of combination products may in

s hot because it is on fire with potential business: money is needed to power this growth.

According to the Wikipedia, “"Money (That's What I Want)" was a 1959 hit single by Barrett Strong for the Tamla label, distributed by Anna Records. The song was written by Tamla founder Berry Gordy. It bec

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

ame the first hit record for Gordy's Motown flagship label.” The song was hot. It has been recorded by over twenty different artists; it reached number 23 on the Rhythm and Blues Charts. The lyrics to “Money (That’s What I Want)”, as recorded by the Beatles, go like this:

“ The best things in li

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

fe are free
But you can keep 'em for the birds and bees
Now give me money (that's what I want)
That's what I want (that's what I want)
That's what I want (that's what I want), yeah
That's what I want

Your lovin' gives me a thrill
But your lovin' don't pay my bills

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

Combination pro

r> Now give me money (that's what I want)
That's what I want (that's what I want)
That's what I want (that's what I want), yeah
That's what I want

Money don't get everything, it's true
What it don't get, I can't use
Now give me money (that's what I want)
That's wha

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

t I want (that's what I want)
That's what I want (that's what I want), yeah
That's what I want…”

The Beatles were hot. It is an interesting fact that it took the Beatles many years to personally make substantial money even though they were the hottest band on the planet. For years they

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

sold more records than any other group, but the profits did not find their way into the individual Beatle bank accounts. When in the course of a B2B business’ development does the business get “hot”? Here are a few examples:

1) A video game developer labored for years to create novel technology

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

and interesting new types of multi-player games for the internet. They were almost put out of business one year when a burglar broke into their office and stole all of their computers and office equipment. A major corporation in the video game business offered them a contract to develop a new gam

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

e; substantial progress payments were offered for meeting the contract milestones; the challenge was to meet a very tight production schedule. All of a sudden, the business was hot; they needed to hire thirty new game developers. How could they meet the increased payroll requirements and accompli

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

sh the goals in the contract?

2) A small distributor of novelty products from Australia established a California corporation to sell their products throughout the United States. They introduced their product to many major department stores. After of several years of marketing they landed several

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

Following aspects would a

new contracts for five times their previous year’s sales. All of a sudden, the business was hot. How could they pay for the product and provide the items to the department stores?

3) A manufacturer of products for the military struggled to survive for five years. They invented a terrific produc

dd to the challenges in developing combination products:

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

t. Unfortunately, they were involved in patent litigation and other disputes that burdened them with substantial attorney’s fees. After years of struggling, the disputes were settled and the attorney’s were paid. The manufacturer was “cash poor”. They negotiated an order for their products that w

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

as several times their previous year’s sales. All of a sudden, they were hot. How could they manage their cash flow to take advantage of the new opportunities?

If these businesses could sing, “Money (That’s What I Want)” could be their anthem. Accounts Receivable Financing may be the answer to t

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

eir universal cash flow issues and requirements for substantial growth. Time is of the essence because these businesses, all of a sudden, are hot.

In five to ten working days, or less, accounts receivable financing may be obtained to make these businesses ready for prime time. The process is rel

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

atively simple. The business completes an application for financing. They give the appropriate accounting information and details regarding their customers to the finance entity. The finance entity conducts a due diligence review regarding their financial condition, and the strength of their cust

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

Professional from academic institutions, pharmaceutical industries, health care indust

omers. If there are no issues, a process is started whereby the businesses deliver their products or services to their customers and the finance entity advances 80% to 90% of the contract amounts. When their customer pays the finance entity it pays itself back the funds that have been advanced, d

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

educts the agreed upon fees, and the business receives the difference. This accelerates their cash flow. It eliminates the wait of thirty to ninety days to receive payment from their customers.

Sometimes there are other complicating issues such as tax problems, UCC-1 lien priority matters, subor

.

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

dination of pre-existing financing, the need for purchase order financing to pay for costs of production, or letters of credit to guarantee international trade- all in addition to accounts receivable financing to make financing a hot business work correctly. Often these issues will be overcome su

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

Companies that provide selfless information through particip

ccessfully.

The bottom line: if your business is ready for prime time and your sales are hot, if you feel like singing “Money (That’s What I Want)” like the Beatles, Accounts Receivable financing may be the cash flow solution for your business’s success.

Copyright © 2007 Gregg Financial Service

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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