Why Prana Biotechnology Limited and Medbox Inc. Lost Big Today

Prana Biotechnology Limited (NASDAQ: PRAN  ) and Medbox Inc. (NASDAQOTH: MDBX  ) were the big losers in the health-care space today, and in this segment from Wednesday's Market Checkup, Motley Fool health-care analyst David Williamson looks at what caused these two market nosedives.

Prana released phase 2 trial results for its leading drug candidate PBT2 in its Huntington's disease indication. While the drug hit its safety endpoint, there is still considerable debate over the drug's efficacy, with the company calling the trial a success, while critics looking at the overall data have called it a failure. Shares are down 10% on the news. David discusses the future of Prana and PBT2 in both its Huntington's and Alzheimer's disease indications, and advises investors to be sure they know the risks involved here.

Also, Medbox Inc. took a verbal lashing from the famed bearish blog Citron Research today, driving shares down by 7%. The company offers marijuana dispensing machines and consulting services for distributors, and in the video, David notes that he's surprised the stock isn't down further after Citron called it "worthless," and attacked both the validity of the company's financials and the history of its CEO. David advises that while many investors are very eager today to get in on the ground floor of the potential future marijuana sales boom, that the risks involved in this yet uncertain industry are still extremely high, and that waiting until the dust settles further could be a very wise move.

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  • Report this Comment On February 19, 2014, at 7:58 PM, GroverNeuse wrote:

    As I commented to your colleague Brian, I am happy to see MF now providing more balanced reporting.

    I did, however, bring up this point and I will with you:

    In your first paragraph and your statements, you make it seem as if Prana is in a debate regarding the efficacy of PBT2 and using efficacy findings to call the trial a success. And that is not true.

    if you listened to the conference call, it was clear the only reason Prana called the trial a success was because of safety. Period. Drs. Tanzi and Dorsey were clear on that; Tanzi said he was encouraged by the secondary endpoints, but stated that because of the profiles of patients chosen and the protocol used, he really didn't expect statistically significant findings.

    Although you did not imply any wrong doing as some others have done, I believe your characterization of what Prana is calling success, is misleading.

    If you listen to the call they are clearly not putting a "spin" on the results.

    Thanks,

    Grover

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