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Why Prana Biotechnology Limited and Medbox Inc. Lost Big Today

By Dave Williamson - Feb 19, 2014 at 6:32PM

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One biotech and one player in the new marijuana industry that fell hard 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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