Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Prana Biotechnology Limited (NASDAQ: PRAN) plummeted 70% on Monday after its most advanced drug candidate, PBT2, failed to meet its primary endpoint in a study of Alzheimer's disease patients.

So what: The stock has soared over the past year on optimism over PBT2's potential, but today's phase 2 results -- Alzheimer's patients treated with PBT2 failed to show a statistically significant reduction in the levels of beta-amyloid plaques relative to a control group -- are forcing Mr. Market to quickly sober up. So while Prana is also studying PBT2 as a potential treatment for Huntington's disease, investors are clearly interpreting the news as a sign of more disappointing news ahead. 

Now what: Management said it will consult with experts in the field to determine how best to progress PBT2 in Alzheimer's disease. "Whilst not meeting all of our hopes, this result does not deter us from the future development of PBT2, a safe and well tolerated drug candidate for Alzheimer's disease," CEO Geoffrey Kempler said. "Our scientists and those from other institutes have developed a strong body of evidence for the efficacy of PBT2 in Alzheimer's disease. The suggestion of beneficial effect of PBT2 on brain volumes first seen in the Reach2HD Huntington disease trial and now in this Alzheimer's disease IMAGINE trial is intriguing." Prana remains far too speculative for Fools, and today's massive decline underscores the risk in small-cap biotechs.