In what seemed like a promising biotech success story, investors are reminded again about the dangers of putting their money in development-stage drugmakers after GTx collapsed 65% following a failed late-stage drug trial. 

The pivotal trial was for drug GTX-024, which prevents muscle mass from wasting away in lung cancer patients. The drug had nice market potential as a complementary therapy, and the FDA was interested enough to give it a fast-track designation, speeding up its approval process if its phase 3 trials went well.

In this video, health-care analyst David Williamson drills down on today's terrible news for GTx investors. Watch and find out why there was so much optimism around this drug and if, after the collapse, GTx makes for a bad-news buy.

David Williamson owns shares of Johnson & Johnson. Follow David on Twitter: @MotleyDavid.

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