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Speaking Finance
Translating technology into Dollars and "Sense" Strategic and financial partners target successful companies supported by beneficial technologies/products, capable leadership and concrete financials. All three components work in unison to support company development, commercial growth and overall value creation - leadership commits cash to develop and commercialize products, product revenue generates cash flow and supports the brand, and finance manages cash through capital efficiency and pays overhead.
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Cash is lifeblood of any thriving business, and paired with capital efficiency (capital intensity and cost-of-capital, aka risk/return) they determine enterprise value, equity share price and investor interest. Potential strategic and financial partners ultimately make their funding decisions by translating your patents, clinical data, regulatory design and commercial strategy into dollars (cash flow) and “sense” (capital risk/return). They are speaking finance, and to control the conversation your company needs to couple its P&L or Income Statement with a Balance Sheet (capital) and Cash Flow Statement to convey confidence in your “ask”, determine equity share value, and mitigate risk.
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Financial Planning & Analysis
Whether developing or launching a technology, cash flow and capital efficiency (risk/return) are key components to a company's success. Cash is needed to pay overhead, secure IP, purchase equipment, support working capital, etc. Run out of cash and the business ceases to operate. It is often a misconception that cash flow is synonymous with operating profit/loss found in the P&L or Income Statement, when in fact a Balance Sheet (capital) coupled with the P&L creates the Cash Flow Statement. Lucic will build out your projected financial statements to account for capital requirements (CapEx, WC, Debt, Equity, etc) in the Balance Sheet and, if needed, your P&L through Product Planning to determine cash flow needs and your investment “ask” per milestone. Lastly, Lucic will tie in capital efficiency with your projected cash flows to determine your enterprise value and potential investor equity position.
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Product Planning
Value is in the indication and its clinical design parameters. For generating cash flow the indication defines forecasted sales and promotion costs. For capital efficiency the clinical design influences funding requirements and risk-adjusted rates of return. Lucic will determine your minimal viable product and/or follow-up indications needed to secure investor confidence in the technology and strategy, for achieving milestones efficiently will increase your valuation and ability to raise follow-up capital at a lower rate. Lucic will assess the value of your development and commercial strategies by building Target Product Profiles (assumed indications) and translating them into bottom-up, unit-based sales forecasts complete with physician demand, payer access, competitive intelligence and pricing assumptions, and offsetting operating costs. Although emerging companies plan for licensing or acquisition, potential investors are influenced by a full, standalone commercial model to make their decision.
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Interim Corporate Finance
While emerging Medical Product companies should focus their time and resources on R&D and/or M&S, it is also important to focus on the financials. Cash flow in particular. Cash is the lifeblood of any successful company. Run out of cash and the business ceases to operate. Let Lucic be your part-time financial expert to direct your budget and capital requirements, pay employees and third-party vendors, oversee the capitalization table, and handle administrative issues. Within this role Lucic can also conduct Product Planning and your Financial Build, as well as solicit and manage strategic and financial partners, and outside legal and accounting vendors.
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State Regulatory Licensing
To prevent distribution and commercial delays, Medical Product companies need to have state regulatory licenses to operate and distribute product within select states, even when using third-party manufactures and distributors. Overshadowed by FDA regulatory requirements, state regulatory licensing is often overlooked but is paramount to a company’s commercial success. There are a growing number of states levying “cease and desist” letters or fines on companies that do not comply. Let Lucic assist you in successfully navigating the state regulatory license process to prevent commercial delays.
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