Prana Biotechnology Limited (ADR) (NASDAQ:PRAN) Falls On Fears

Posted by Lynn Eisler February 11, 2014 0 Comment 1947 views

As with other small capped development stage bio tech firms, Australia based Prana Biotechnology Limited (ADR) (NASDAQ:PRAN) too is heavily vulnerable to analyst and trade guru commentary on the prospects of the development stage drugs which firms are attempting to bring to the market.

Sumner Street Expresses Doubts On Efficacy Being Proved

This was amply demonstrated during yesterday’s trading, when share price of Prana Biotechnology Limited (ADR)(NASDAQ:PRAN) went down by 16 percent during trading on 7th February and 10th  February. This sell off in the stock was triggered by news that analyst Bart Classen  of Sumner Street had disclosed in a letter to his clients that he was not overtly impressed by the preliminary data released by the drug maker about its ongoing clinical trials for drugs designed to treat “Alzheimer’s and Huntington’s” ailments

Data Points Not Conclusive

The analyst while conceding that the results from the 12 week long clinical tests did indicate improvements in certain aspects of the critical neuropsychological tests, goes on to underline that these results are not significantly strong enough data wise to help move the candidate drugs into the next phase of testing.  He also draws attention to the need to adjust the limited nature of the positive findings against the vagaries of the clinical trial procedure of using multiple end points to note down the end result before determining the effectiveness of the data being published. Considering these draw backs in the procedure laid out and the lack of incisive and conclusive data points,  Mr  Classen had opined that  the drug maker would struggle to prove effectively the efficacy of their drug in treating diseases like Alzheimer.

Investors React To The Analyst Warning

On the back of this analyst report getting significant traction among the investor community, a major run on the stock of this development stage drug maker became unavoidable over the past two trading sessions. At current price points, the stock is trading 31 percent below its 52 week high price bench mark of $13.29 per share.

About Lynn Eisler

Lynn Eisler is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments. Lynn has been honored with the H.L. Mencken Award for Investigative Reporting, the Champion of Justice Award for reporting on the drug war, and the John Hancock Award for business reporting. Lynn was also a Knight Medical School Fellow at the University of Michigan.

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