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Before we start discussing the Microsoft case here is a teaser for you.

You have started a hotdog outlet with 5 of your friends in a remote area and it is at pres

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

ent just generating $100 a profit every day which you shares equally with your friends.

For you it is a decent return on initial investment $2000 you invested in

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

Examples of combination products may in

he beginning.

One day one of your friends come and declares that he is willing to buy share if any of you is willing to sell and set the price range of 1800 to 21

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

00. The lowest bid will be accepted first.

What will be the first thoughts on your mind?

- Why he wants to increase his share in the company.
- Is there are

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

opportunities which I can’t see.
- Next will be what will be the future of the Hotdog selling business.

The same mechanism is at work in Microsoft buyback

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

Combination pro

of shares worth $20 billion through Dutch auction starting from July 21st to August 17th.

The price range of proposed dutch auction is $22.50 and $24.75

Th

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

ere are two mechanisms at work here –

First Microsoft wants to give the least possible amount to its share holders and it is for the shareholders to decide how th

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

y perceive company’s future.

Suppose the company is willing to buyback 1000 shares in the market and it received bids for 100000 shares. The break-up of 100,000 s

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

hares is as follows

A $ 22.50 - 100 shares

B $ 23 - 700 shares

C $ 23.25 - 200 shares

D $ 23.50 - 10000 shares

E $ 24 - 89000 sha

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

es

The Microsoft will just pay $22.50 for 100 shares, $23 for another 700 shares and finally $23.25 for the last 200 shares it wants to purchase. The people who w

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

nt to sell at $23.50 won’t able to sell any of their shares.

Secondly by buying back shares from open market, the management is increasing the worth of remaining

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

Following aspects would a

stockholders holding (jargon) in the company, more often than not it ended up increasing promoters holding in the company as they control the decision making at th

dd to the challenges in developing combination products:

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

highest level and have better information about future prospects of the business.

What will happen to Microsoft share at Wall Street?

Historically once t

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

he company starts buying back, the prices of the shares rises as investors believe that the company has something in tank.

Personally I believe that the range is

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

n the lower side as Microsoft share is already been traded at $24 (1st August, 2006) and shareholders have a very low incentive to sell their holding in the compan

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

.

Looking in terms of return buyback will increase the earning per share (EPS) and enable the investors a higher return than the present range of $0.26 to $0.37.

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

Professional from academic institutions, pharmaceutical industries, health care indust

The good thing the buy back will do to Microsoft shares is that it will increase the support price of the shares in open market. As per the historical trends and

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

echnical charts – that data is less relevant in the present case as none of the companies before had that much strength as Microsoft does now.

Finally the to my m

.

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

ind the real gainers of this buy back will be the one who won’t sell their stocks as technically tech stocks are bottomed out after the thrashing they received sin

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

Companies that provide selfless information through particip

e April this year. Secondly Microsoft will be launching its next version of operating system – Vistas early next year so that will help in boosting the bottom line

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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