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Diversification means spreading your risk among several products. The old adage of not putting all your eggs in on

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

e basket relates very well when it comes to designing a good investment portfolio.

Don’t put all your faith in on

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

Examples of combination products may in

e company or in one industry, because it may disappoint you. How many people believed Enron stock was a great inve

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

stment for their retirement accounts? Not any more, they don't.

If you buy a diversified group of fundamentally s

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

ound stocks with good earnings and growth, the chances are that in a good market you will catch at least some of t

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

Combination pro

e winners, and in a down market, you won't be left holding all the losers.

There are two significatn benefits to

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

diversification. First, it reduces the volatility in the value of your portfolio. When one of your holdings is dow

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

n, odds are that others are up. This stabilizes your portfolio performance. Secondly, diversification allows you t

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

o obtain a higher rate of return for your level of risk.

Don’t be deceived into thinking that eight airline stock

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

s or eight computer stocks represents diversification. They are all companies within a single industry. Strive for

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

a portfolio covering a wider range of industries. For example, you may have some stocks in the health care industr

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

Following aspects would a

y, the retail area, automotive, beverage, telecommunications, electronics, and others.

Over diversification means

dd to the challenges in developing combination products:

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

you are unable to manage the large number of companies. If you limit your holdings to ten stocks and a stock come

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

s to your attention that you feel you should buy, what will this force you to do? Probably eliminate one of the un

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

der achievers you are holding.

The way to upgrade a portfolio is to sell your losers and keep your winners, as th

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

s allows you the possibility of continuously moving to a position of strength. When managing your portfolio, you m

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

Professional from academic institutions, pharmaceutical industries, health care indust

ay find it helpful to utilize mutual funds. A mutual fund has anywhere from 20 holdings to as many as 500 from a w

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

ide spectrum of industry groups.

Purchasing a mutual fund will help your portfolio become more diversified. When

.

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

researching mutual funds, remember to look at the industry sector weightings. By designing a portfolio with severa

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

Companies that provide selfless information through particip

l mutual funds you will want to be careful that your overall portfolio is not weighted too heavily in one industry

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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