The recent disaster enables us to learn lessons that will be useful going forward. And it was a disaster, by the way. Only the gloomiest pessimists here predicted that the IMAGINE results would cause the stock to tumble to $2. My own worst-case scenario was $5. I expected at least ONE of the trial's endpoints to be met. I, along with most of the other longs here, regarded the $2 predictions made prior to the results as the crazy rantings of uninformed bashers. In reality, I suspect that most of the people making those $2 predictions were indeed uninformed bashers. But they happened to get it right. Adding yet another data point supporting a thesis on which I've expounded here from time to time: the future is unpredictable.
One lesson I already learned from my previous speculative disasters was that if a speculative stock starts to go up a lot, one should start selling some of one's shares. At least enough shares to guarantee that you'll still make a healthy net profit in the event that the stock crashes. I sold about one-third of my shares during the big pre-results run-up. But I violated my own rule about keeping speculative stocks at 5% of my portfolio by allowing Prana to comprise 10% of my portfolio immediately before the results. Greed at work. Nonetheless, I still have a good overall net profit on Prana, thanks to the fact that I at least partially learned from previous experiences.
To be continued...
I know this is an investment community and thus profit is and has always been (if not by the pros) the main endpoint. I think a lesson that should be known and perhaps taken from a subconscious to a conscious level is that we investors in cases like this, also have the opportunity to invest in CURES. while I expect that many of the "lessons" will reflect a fall or loss of $, I think people should take a more conscious understanding in WHAT they are investing in. Hope for a cure is NOTHING to belittle and those that did that should consider their jobs better than the rest of ours....
This coming from a coward in that regard, an investor of fallen companies.
But I am quite confident that neither big pharma, nor Wall Street view this binary event as a "0."
Before anyone says, "Well, you can see Wall Street's view reflected in the price" I will add that anyone who thinks Wall Street's perception of a stock is accurately reflected in the daily stock price has not invested in biotechs for very long (or is being disingenuous).
Counterintuitive moves in biotech stock prices are common--sometimes for innocent reasons, sometimes for not-so-innocent reasons.
Best of luck to all--especially the patients. wcamp
goutah, I have read your posts for years and agree with your above-stated philosophy on speculative investing--especially biotech investing. But don't join the chorus in OVERSTATING the trial failure:
1) This trial would have had a VERY good chance of achieving its primary endpoint, had not the placebo group for some unknown reason achieved a totally unique reduction in amyloid burden. Nobody could have predicted this.
2) NOBODY should have expected cognitive improvement in a small trial of prodromal patients who have little cognitive impairment to begin with. Had they achieved it, it would have been more than good or excellent--it would have been ASTOUNDING.
I still see positive things in these results, and feel there are MANY reasons to be hopeful for this little company.
Best regards, and good luck in the future. wcamp
Good observations, wcamp32000. Your points are valid.
I still regard IMAGINE as a failure for the simple reason that it completely failed in its intended purpose: to generate compelling results that would make it easy for Prana to obtain ample funding to proceed with further clinical trials. The IMAGINE results were supposed to make Big Pharma companies beat a path to Prana's door as well as boost the share price to the point that Prana could easily raise lots of cash. The bottom line is that IMAGINE was pitched as a "binary" event: either Wall Street and Big Pharma would see strong confirmation that PBT2 is worth pouring money into, or they wouldn't. It was indeed a binary event. Except that we got a "0" instead of the "1" for which we had been hoping.
Having said that, I agree that the IMAGINE trial provided us with lots of useful scientific information as well as a new mystery that needs to be addressed (the amyloid reduction in the placebo group). And I agree that the results don't rule out PBT2 as an Alzheimer's treatment. I also suspect that the full post-hoc analysis of the data will provide additional useful insights. And the open-label extension could provide some interesting data. I see no reason not to proceed with a much larger AD trial of PBT2, with one exception: Money. Getting enough money anytime soon to start a larger AD trial seems at this point to be a pipe dream. Prana may be able (just barely) to afford to bring PBT2 to market for HD and start generating enough cash flow a few years from now to finance more AD trials. It's this additional delay that bothers me, especially after the lengthy delay between the first Phase IIa trial and the IMAGINE trial (a delay that was also caused by lack of money).
Excellent post. I fortunately sold about half pre-results, so I didn't get burned, but I count myself lucky. If the results had been released a few weeks earlier, I would have been hit hard. Lesson learned - again. I will never leave myself open to big losses. I will always take profits on the way up.
What was it about this company that left so many of us bewildered. I mean, I never thought it would fail completely and sink back to the 2's. I figured the primary endpoint was very likely, and the trailmaking was almost a sure thing. The rest, bonus if they get it. Worst case, probably back to 4 or so. I guessed that the actual outcome was as unlikely as the over-the-top scenarios being painted by some of the more 'enthusiastic' posters. It seemed to take a lot of us by surprise.
It's amazing that the trial failed to really answer the basic question - does PBT2 have potential to treat AD. The whole point was to convince a big pharma company to partner with them and move it forward. Yet now, there are as many questions as ever. After all the DD into PBT2 and the metal theory, if you asked me now if the drug has potential to treat AD, all I could do is shrug. Nobody knows. Did they screw up the trial? Did it need to be bigger? Did they choose the wrong markers? Who the heck knows.
So with all of these questions still out there, it makes me ask another pertinent question - how competent are the folks at Prana? Not as scientists - I still think they're tops there. Tops. But as businessmen, commercializing the science. To expend the resources and time that they did on IMAGINE, and to have failed to resolve the basic questions, just seems inexcusable. What a waste. How do you convince the skeptics now? How do you raise the money to conduct a larger trial now? I fear we may never know if PBT2 can treat AD.
I do hope that Prana gets its act together and repairs the damage. Let us know what the plan is please. For my part, I bought shares Friday. HD seems promising.
One other point. Like everyone else, I was excited to see the Lawler video. But as time went on, I became a bit skeptical of them. Let's just say I considered their testimony the least convincing part of the PBT2 story.
In the back of my head, I wondered if they were publicity hounds. I'm not saying they were trying to deceive anyone, but still, their desire for publicity had me worried. Was this causing them to be self-delusional?
Even more than this, I just thought the whole idea of talking about a clinical trial before the results were released was unethical. If you're part of a scientific experiment, you have an obligation to protect the integrity of that science. Talking to air-head TV personalities, who managed to botch the details of the story, is unwise. And that's putting it politely. It's sort of like giving an interview to TV reporters while you're sitting on the jury. Ah, why not wait until the trial is over buddy.
It's not like you could ignore the video. It was there, so you had to evaluate it. It just never should have been out there to begin with. With all due respect to the Lawlers, they really ended up doing a disservice to the cause. Another lesson learned.
....continued from previous post
Notice that I've always tried to avoid calling Prana an "investment". That's because it isn't one. It never has been one. It has always been a purely speculative stock. That's because nobody knows what Prana's intellectual property is worth. A week ago, many here were saying that Prana's intellectual property was worth many billions of dollars (I think one guy was even putting it at a trillion dollars or some such nonsense, based on his projection of future sales of PBT2).
The whole point of the Reach2HD and IMAGINE trials was to give us some sort of enlightenment and clarification as to what PBT2 might be worth. For example, if IMAGINE had met its primary endpoint and had also shown strong improvement in trail making B and category fluency during the full year of treatment, the answer would have been: "PBT2 looks like it might be worth a lot." More accurately: "these results are consistent with the thesis that PBT2 is worth a lot". Instead, the best-case spin we can put on the IMAGINE results is: "We can't tell whether PBT2 helped any of the patients who were taking it, but we can see some interesting trends that suggest that a larger and better-designed study might show efficacy." Thus, IMAGINE didn't give us the sort of strong clarification that we had hoped for. In retrospect, the results from the original Phase IIa trial were much more compelling than are the IMAGINE results.
But we need to remember that the Reach2HD results did in fact show something. They showed significant reason to believe that PBT2 may have a profitable future as an HD drug. So Prana's intellectual property MIGHT be worth something after all. Not billions or trillions, but perhaps a present value of a few hundred million given what we currently know.
So perhaps the $2 price level is an overreaction based on the enormously disappointing IMAGINE results. A current price of $4 might not be unreasonable based on the Reach2HD results.
My thanks to you Goutah, I always read with interest your view on this stock. I too let greed over ride my gut feeling and my ignorance kicked me in the #$%$.. By Friday the 28th I was starting to get nervous but I did nothing, like a deer in the headlights I froze up. Unlike you I didn't sell any shares during the big run up (greed) combined with my lack of stock market knowledge (ignorance) left me without an exit strategy.
Some things that troubled me....
The Lawler video at first gave me goose bumps, but as time went on it made me uncomfortable
especially after I saw someone post the comment on the lawlers wifes blog.." time to buy stock in Pran." Just seemed like they went out of their way to show that pill bottle. Are those enrolled in the trail not bound by a strict confidentiality agreement?
Tanzi's tweets from the beginning made me cringe, just seemed unprofessional to me.
And lastly, the fact that they didn't present the trial results before or at the Conference being that the end of March was just a weekend away.
In the end I was very bummed to say the least, I just didn't think the results would bring the SP down to the 2's. Even so, I'm still green because I bought so long ago.
No one to blame but myself, just another lesson learned.
TAKE SOME PROFITS AND ALWAYS HAVE AN EXIT STRATEGY!
Thanks again to you and all the other people who contributed an enormous amount of time and energy to this board.
Goutah, like you, I sold 1/3 on the way up and made a good profit on what I sold. I too did not expect it to fall to 2.30 or so -- I was thinking that 3-4 was the worst case scenario. Of course, what I think about the price doesn't matter in this case: only the market counts. But what is puzzling is that with the HD results, this company is worth more than a year ago, when it was in the 2.20s-2.30s. I think it should move higher.
Thank you. I told the board that PRAN was too tough a nut to crack and was branded. Stopped informing the board and shorted PRAN. It went up a couple of buck and then crashed while I was holding my puts. The lesson I learned is to not express concerns to others about any possible negative outcomes when euphoria hits. In other words, allow investors to lose money and simply shut up. Sad but true.
long time bio investor and winner/loser. After being up 20 % ytd, in mid march, dumped all a week later at 11 % gain, thankfully, would otherwise be in red today. From my experience, the best way to make money in bios is to buy when they get sold off due to events, then gradually sell off with profits. HALO is a good example, if you look at 3 year chart, you see numerous big dips, after nice run ups. PRAN is also a good example. glta