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According to a U.S. Securities and Exchange Commission warning, “Investors in penny stocks should be prepared

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

for the possibility that they may lose their whole investment." It’s probably justified. There’s no doubt that

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

Examples of combination products may in

true penny stocks are among the surest ways to lose all your money in the stock market.

But, that being 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.

case, why do so many investors love penny stocks? If you type “penny stocks" into Google it spits out more tha

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

n 8.5-million hits. If you do the same for “blue-chip stocks" you get about half that number and if you type i

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

Combination pro

n “dividend-paying stocks" you get about half that again.

The folks at Fool.com reckon it’s because “the worl

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

d of pennies is inhabited by hardworking average Joes hoping to strike it rich, pumpers and dumpers, hypesters

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

and scammers. In pennies, the logic and reason that applies in the rest of daily life is replaced by zeal and

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

prayer.”

But there may be another reason. And that is that the rest of the stock market can be so utterly bor

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

ing. Let’s face it, unless you’ve got huge amounts of money on the line, how excited can you get when one of y

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

our blue chips has a really big day and moves up 1.5%? A penny stock can easily double in price in a matter of

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

Following aspects would a

days. What are the chances of an Anglo [Nasdaq:AAUK] or a Billiton [NYSE:BHP] doing that in a couple of years

dd to the challenges in developing combination products:

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

?

And, while it must be said that buying some penny stocks may be more akin to picking up a lotto ticket on t

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

he way home from work than making a rational investment decision, that’s not to say that you shouldn’t go look

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

ng for big returns from a penny stock with a reasonable amount of cash, no debt and a CEO - or better still, a

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

CEO/founder - who has a substantial ownership in the business.

Yes, they are the exception. And, yes, of cou

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

Professional from academic institutions, pharmaceutical industries, health care indust

rse, they are hard to find. But the point is this: provided you’re willing to put in the effort and you unders

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

tand that this is a high-risk area that certainly isn’t going to suit everyone - in other words, that you full

.

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

y understand what you’re getting into - you shouldn’t let anyone dissuade you from buying a penny stock simply

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

Companies that provide selfless information through particip

because it is a penny stock.

The thing to remember is not to take a chance on something you don’t understand

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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