E-Articles - Finance

It’s important that you understand the impact that a bear market has on your capital. The give and take of your investme

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

nt capital is not equal. If you placed $100 into an investment and it declined 50% to $50, what is the rate of return yo

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

Examples of combination products may in

u would need to earn back your original investment of $100?

Once you lose money, it takes a much greater return on the

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

funds you have left to recapture your original investment. In this case, you would need a 100% gain on the remaining $50

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

to recapture your original $100 investment.

Looking at historical bear markets in the United States, we can conclude t

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

Combination pro

hat the time to recovery from a bear market can take between six months and twenty five years! Declines in portfolio va

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

lue have ranged from 20% to 86.7%! Not a good scenario for buy and hold investors. This is why you would be better off

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

inancially to never lose money in any one year and to only achieve half of the market’s returns in the positive years. L

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

et us explain how this is possible. If you never lost money in the down market years, you would only need to capture 38.

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

33% of the gains in the positive market years to equal a buy-and-hold position in the Nasdaq 100 index. More realistical

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

ly, if your losses in the down market years were half the Nasdaq’s losses, you would only need to capture 63.37% of the

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

Following aspects would a

Nasdaq's gains in the positive market years to equal a buy-and-hold position.

The point we are making is that you don’t

dd to the challenges in developing combination products:

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

need to equal or outperform the performance of the market in the positive market years if you protect your capital in t

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

he down market years. Protecting your capital in the down market years has an exponential effect on growing your capital

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

over time.

The objective of any stock market timing strategy should be to reduce risk and maximize returns - with risk

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

reduction being the most important factor. All other things being equal, you want to invest in the least volatile, highe

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

Professional from academic institutions, pharmaceutical industries, health care indust

st reward, lowest risk strategy possible.

You may be reading this today because you are tired of giving all of your own

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

assets, or your client’s assets, away to a bear market. You may even be in the position where your retirement has been

.

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

diminished to the point of having to change your retirement plans.

Whatever the reason, there are better ways to grow a

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

Companies that provide selfless information through particip

nd protect your assets than the buy and hold (buy and hope) myth promoted by Wall Street.

Copyright 2006 Equitrend, Inc

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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