What is Due Diligence?

Mar 16, 2016 | News

Due diligence is a concept that has been around for a long time. In basic terms, it means doing your homework before making any major decisions about finances, investments, equipment, or more. For medical device manufacturers, it often involves a little more work in order to pass FDA scrutiny. That means conducting a thorough risk/benefit evaluation and financial review as well as determining if there are any concerns about the company’s regulatory standing with the FDA that could lower the manufacturer’s valuation, damage the company, or severely affect product development.

If you’re an investor looking for a smart investment or a company looking to acquire new products or capabilities, it can be difficult to research an organization or technology if you’re unfamiliar with the rules and regulations governing it. At MEDIcept, we understand the regulatory landscape and clinical strategies. We know what it takes to get a medical product to market — we work with medical device manufacturers on a daily basis. We have assessed investments for companies with a combined value of over $800 million.

While some investors and M&A professionals will argue that there is plenty of information available online to help them make informed decisions, the sheer volume of data often works against them. They struggle to make sense of disparate data and analysts’ opinions that masquerade as facts. The result? Lots of time wasted on mountains of information that yield little valuable knowledge. At MEDIcept, we have the experience and expertise to help investors focus on the right information to make the right decision and maximize their return on investment.

If you don’t have the time to do the necessary work to perform proper and adequate due diligence, then you’re taking a much bigger risk than necessary.  Rapid, cost-effective evaluations of new medical device ideas and company management can seem like a daunting task, but that’s why there are companies like MEDIcept who specialize in providing due diligence assistance and support.  With a proven due diligence assessment and analysis program, we have plenty of regulatory and compliance experience and all the skills needed to make informed investment decisions.

The legal standards for due diligence help ensure that the buyer isn’t getting ripped off and that the seller provides all the information necessary to make an educated decision. This concept is simple, but if you aren’t familiar with all the ins and outs of the company you’re considering purchasing or the medical device you’re thinking about investing in, it can be easy to overlook crucial details. Not understanding the finances or regulations of your target can lead to financial damages or production delays, which decrease the overall value of your investment.

If you or your company is looking to invest in, acquire, or merge with a medical device manufacturer, you should consider M&A due diligence assistance from an experienced FDA regulatory consultant such as MEDIcept. Our due diligence assessment and analysis program can include:

  • National and international regulatory strategy
  • Product classification
  • GLP/QSR/GMP compliance
  • Marketing compliance
  • Product labeling compliance

Remember, proper due diligence is important in any corporate merger and acquisition because investing in or acquiring another company is always risky business. But for medical device companies subject to additional federal regulations and substantial penalties for regulatory noncompliance, due diligence is absolutely critical.