Encyclopaedia - Finance

In some cases, equity issues that surround an IVA can have a serious impact on the decision as to whether or not an IVA remains the most suitable debt solution available. As a debt adviser th

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

at specialises in IVAs, I know how essential it is for clients to understand what the requirements of their creditors will be, and in turn, how those requirements will be applied to their<

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

Examples of combination products may in

/i> IVA case.

Many people do not know what an IVA is, so here is a very brief overview of the IVA concept:

An IVA, or Individual Voluntary Arrangement, allows a person in financ

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

al difficulty to reach a new formal agreement with their creditors. An IVA allows a debtor to make repayments, of an affordable amount each month, to their creditors for the term of th

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

e IVA (normally 5 years) after which period, and so long as the debtor does not have any equity in a property, the debtor will be considered debt free. By the terms of the IVA, the creditors

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

Combination pro

re legally bound to write off any outstanding balance when the IVA finishes.

However, as you can imagine, there are conditions attached.

It is important to understand from the

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

outset that an IVA is a "Voluntary" agreement, and both parties must voluntarily agree to be bound by the IVA terms. Therefore, for the IVA to be acceptable to the creditors, it must m

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

ake financial sense. Creditors will not likely accept an IVA that does not return a dividend (rescued pence in the pound) comparable with, or in excess of, their expected dividend from the de

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

tor's bankruptcy.

This does not mean that the IVA proposal must return more money than a bankruptcy might return, but rather be a realistic alternative to it.

There are very h

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

igh costs involved with a bankruptcy which become even higher when there is a property with equity that needs to be released. As much as the first ?15,000 of equity released from a forced sal

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

could be taken in costs in a bankruptcy. Also, it should not be assumed that a bankruptcy will force the sale of a property. Indeed, if there is little or no equity in the property, t

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

Following aspects would a

he Official Receiver may offer the debtor an opportunity to buy the equity interest on the property, and therefore remove the property from bankrupt's estate.

So looking at how any equity wo

dd to the challenges in developing combination products:

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

uld be dealt with by the Official Receiver in the bankruptcy of each particular case, is a useful technique to help gauge the creditors reaction when faced with an IVA.

In the main, most IVA

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

will require a release of equity at the end of the 4th year, and how much money needs to be released will be governed by 5 factors.

The size of the original debt.

The am

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

ount expected to have been paid into the IVA after 5 years.
Is there any releasable equity, and if so how much?

Can the debtor afford the costs of the remortgage required

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

Can the debtor find a company that will agree to the remortgage?

The general requirement for the remortgage is that as much as possible is released to the creditors, u

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

Professional from academic institutions, pharmaceutical industries, health care indust

p to, but no more than the original debt that was owed at the outset of the IVA. This offers the creditors a full repayment, but only where possible, and offers the debtor the reassurance tha

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

t should it not be possible to raise the full repayment, there will be a debt write off at the end of the IVA.

So, the answer to the big question, "Will I be made to sell my family

.

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

s home?" is NO.

Each case is different, and it is not always an easy choice, but reaching an agreement through an IVA will protect your property from your creditors. Once t

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

Companies that provide selfless information through particip

he IVA is accepted, the creditors can do nothing to change the terms, and providing the debtor continues with the monthly repayments they can be assured that they will be debt free in 5 years

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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