Answers - Finance

The molybdenum price continues to surprise mining analysts by remaining ‘remarkably firm’ through 2006. And the same should be t

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

rue in 2007, if Sprott Asset Management researcher Maria Smirnova is correct. “We see demand growing, while there are not many n

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

Examples of combination products may in

ew sources of supply,” she told us. “In a market where 16-20 million pounds of new supply is required every year to keep up with

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

demand, we are aware of less than 10 million pounds coming on-stream next year from new mines.”

“New production that was antic

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

ipated, particularly during the first half of 2006, has not materialized,” William Cook explained. Cook is the North American re

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

Combination pro

presentative for Derek Raphael & Co (UK), presently the world’s largest molybdenum trader. “We have yet to see one pound of new

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

production coming from a number of mines we had anticipated.” It’s not just delays in new mines coming on. “A lot of the produci

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

ng mines are not producing what they had budgeted,” Cook said.

U.S. Geological Survey molybdenum specialist Michael Magyar poin

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

ted to Kennecott’s Bingham Canyon mine in Utah as an example, “They are producing below their mine plan this year.” Magyar expla

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

ined, “The molybdenum industry does have the ability to produce more moly, but we can’t roast much more moly right now.” He expl

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

ained that increased molybdenum in steel demand could create another bottleneck at the roasters. Roasting is the process where m

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

Following aspects would a

olybdenum is brought up to spec by burning off sulphides. “No one is actively permitting for more roasting capacity in North Ame

dd to the challenges in developing combination products:

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

rica,” Magyar warned.

Strong demand, lack of new molybdenum mines and roasting capacity to remove the sulphides from molybdenum

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

may provide investors with opportunities in the metal. While it is traded in the cash market among traders, primarily in Europe

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

and Asia, some believe emerging near-term primary molybdenum producing companies could be winners if the metal’s price remains

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

around the $25/pound level. Most of the world’s moly comes to the market as a byproduct of copper mining.

Smirnova’s favorites

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

Professional from academic institutions, pharmaceutical industries, health care indust

among near-term primary producers include Blue Pearl (TSX: BLE), which she says has been catapulted to “one of the largest and m

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

ost profitable mining companies in Canada.” Another company in which Sprott Asset Management, through its funds, has invested is

.

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

Roca Mines (TSX: ROK). “Roca is one of the very few emerging moly producers that we know of. Roca is still progressing towards

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

Companies that provide selfless information through particip

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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