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    It’s a headline that every stock market investor fears will happen. The markets crash and their hard-earned nest egg evaporates. They’re forced to go back to work and must resort to eating beans and rice. Is 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
    hat fear justified? No.

    Stock markets around the world dropped on Tuesday. The news media echoed that it was the biggest one-day drop since September 11th, 2001. The Chinese stock market dropped almost 10%. H
    ; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

    Examples of combination products may in
    re in the U.S., the major indexes were down over 3%. At one point the Dow Jones Industrial Average dropped over 150 points in one minute!

    Should investors panic? No. The world is not coming to an end. The wor
    lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

    d’s economies continue to be strong and are growing. Interest rates are still low compared to historical standards. And yesterday’s decline follows 7 months where the markets recorded increases of 15%, 25%, 40
    here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
    , and even 77%.

    First, let’s put yesterday’s drop in proper perspective. I remember watching the ticker back in 1987 when the stock market tumbled. It’s something that I will never forget and is one of the re
    d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

    Combination pro
    asons I have developed the systems and strategies I use to manage my client’s money today.

    On Tuesday the Dow Jones Industrial Average dropped a little over 400 points. To equal the market drop in 1987, Tuesd
    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
    y’s total decline would need to be 2700 points. Tuesday, the Dow dropped 3%. In 1987 it dropped around 20%!

    Second, there are going to be times when the markets make rapid adjustments. This applies not just t
    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
    the stock markets, but to bond and real-estate markets as well. The introduction of electronic trading and the proliferation of hedge funds only add to volatility.

    That may have been what occurred yesterday.
    nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
    Hedge funds can be leveraged as much as 30:1. That means if they have one dollar, they borrow thirty dollars more and invest it all. If the markets go up, a hedge fund can make enormous returns. If the markets
    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
    drop too much then they get a ‘margin call’. That’s when those that lent the money decide they want it back—right away.

    When someone trading on margin receives a margin call, typically they have to sell inve
    ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
    tments to generate the cash needed to cover the call. When you’re leveraged 30:1, it means you have to sell a lot of investments. Hundreds of millions of dollars can be sold in a matter of minutes with the use
    ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

    Following aspects would a
    of electronic trading. That selling causes the market to go down, which causes others to receive margin calls. So they then have to sell.

    Many of today’s mutual fund managers haven’t experienced a decline lik
    dd to the challenges in developing combination products:

    Which markets to tap where the combination products can do fairly well?
    Which combination prod
    1987 or 2001. Initially, they hang in there. But as the markets drop further they succumb to the fear and decide to start dumping investments. In my opinion, that’s why the sell off picked up speed Tuesday af
    cts are meaningful and rational?
    Which therapeutic categories to select?
    Which Combinations can address unmet needs of the patients?
    Do combin
    ternoon.

    That brings me to my second point. Who’s watching your money? When things go bad they can go bad in a hurry. That’s why it is so important that you know there is someone who is closely monitoring you
    tions increase the patient compliance?
    What would be the developing cost?
    How to tackle the risks encountered during combination product developmen
    money and will take action if necessary to protect it.

    Unlike most managers, I employ multiple strategies in each account. Some are short-term, some medium term and others long-term. Days like yesterday illu
    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
    trate the benefits of this multi-strategy approach. The money in short-term strategies was quickly moved to cash. Some sales actually took place the day before the big drop. Others occurred shortly after tradi
    ping new procedures for reviewing their safety, efficacy and quality.

    Professional from academic institutions, pharmaceutical industries, health care indust
    g started. If 25% of an account is quickly moved to cash in such instances, that reduces the overall risk to the portfolio substantially.

    Third, it’s important that you be selective in what you sell. Liquidat
    y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
    ing short-term positions allows me to hold on to high-dividend paying stocks and other investments that should comfortably weather the storm. Even if the market languishes, I hold strategies that pay dividends
    .

    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
    of 6-9%.

    Lastly, after the market closed yesterday I saw a picture of a U.S. soldier carrying an Iraqi child needlessly killed. I talked with a client who was undergoing additional testing to see if she has c
    elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

    Companies that provide selfless information through particip
    ncer.

    While it’s my job to monitor and manage my client’s money and your job to safeguard your nest egg, it’s important to remember in the end, there are things in life that are much more important than money


    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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