Stock Alerts for MELA Sciences Inc. (MELA)
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    Trade Alerts for MELA Sciences Inc. (MELA)

    MELA Sciences (MELA) is a medical device company focused on the design, development and commercialization of non-invasive tools to provide additional information to dermatologists during melanoma skin examinations. Its flagship product, MelaFind, is intended to be used when a trained dermatologist chooses to obtain additional information to help decide whether to biopsy certain indeterminate pigmented skin lesions. MelaFind has received the CE Mark and is approved for use in the European Union. The Company has received an Approvable Letter from the U.S. Food and Drug Administration (FDA) and is working to submit finalized labeling and other items to the agency to obtain marketing approval in the United States.

    Share Statistics (26-Sept-11)

      FY

    2009

    FY

    2010

    %

    Chg

    Q2

    2010

    Q2

    2011

    %

    Chg

    Symbol MELA Revenue, $Mn 0.00 0.00 0.0% 0.00 0.00 0.0%
    Current price $5.10 Gross marg.
    52wk Range: $1.75-$8.32 Oper. margin
    Avg Vol (3m): 556,557 Net margin
    Market Cap. 128.84M              
    Shares Outstanding 25.26M EPS, $ -0.96 -0.83 -13.5% -0.20 -0.19 -5.0%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Shares of MELA have gained 54.9% in the last five days and 146.9% in the last month.  Year-to-date , the stock is down 24.2%.

    Shares of the Irvington, New York-based medical device maker gained on news the Food and Drug Administration (FDA) has issued an approvable letter for its MelaFind device used to diagnose melanoma, which is the deadliest form of skin cancer.  MELA shares yesterday jumped as much as 95%, while volume surged up significantly and reached 5.9 million shares.

    The Company said it will work with the agency to finalize the physician and patient labeling, package insert, user’s guide, training program and clinical protocol for a post-approval study in order to obtain final approval.

    “MelaFind has the potential to provide dermatologists with significantly more information about indeterminate pigmented skin lesions to help us when deciding on which lesions to biopsy to detect melanoma as early as possible,” Darrell S. Rigel MD, clinical professor of dermatology at New York University Medical School, stated in the press release. “While there have been incremental improvements in imaging tools for melanoma detection, we still primarily rely on our judgment based on a visual examination to select the lesions to biopsy; data show that this is often not enough.”

    MELA shares took off earlier this month after the Company reported that it received regulatory approval to market MelaFind in the European Union (EU), allowing it to market the skin-cancer detection device freely across the 27 nations that comprise the EU. MELA said it will initially market MelaFind in Germany, the European country with the the highest incidence of melanoma.

    The studies used to support the Pre-Market Approval (PMA) application in the U.S. and the CE mark in Europe were the 1,383-patient U.S. pivotal trial and the companion reader study of 110 dermatologists.  The device demonstrated a 98% sensitivity in the pivotal trial, whereas dermatologists had a 72% sensitivity in the adjunctive reader study.

    Source:

    http://www.melasciences.com/?passthis=yes&andthis=News

    Financial Summary

    MELA has generated significant losses since its inception. As of June 30, 2011, the Company had an accumulated deficit of $108.9 million. The Company expects to continue to spend significant amounts on the development of MelaFind.

    On June 30, 2010, the Company entered into an underwriting agreement, relating to the public offering of 2.2 million shares of the Company’s common stock, at a price to the public of $7.50 per share less underwriting discounts and commissions. The common stock was offered and sold pursuant to the Company’s Prospectus dated June 1, 2010, and the Company’s Prospectus Supplement filed with the SEC on June 30, 2010, in connection with a takedown from the Company’s effective shelf registration statement that closed on July 6, 2010. The gross proceeds to the Company from the sale of the common stock totaled $16.5 million. After deducting the underwriters’ discounts and commissions and other offering expenses, net proceeds were approximately $15.2 million. Approximately $58.5 million remains available under the Company’s 2010 shelf registration statement as of June 30, 2011.

    Most of the Company’s expenditures to date have been for research and development activities and general and administrative expenses. Research and development expenses represent costs incurred for product development, clinical trials, activities related to regulatory filings, and manufacturing development efforts. MELA expenses all of its research and development costs as they are incurred. As of August 5, 2011, the Company has not borrowed (other than by issuing convertible notes, all of which have been converted into equity) or financed its operations through equipment leases, financing loans or other debt instruments.

    As of June 30, 2011, the Company’s total of cash and cash equivalents was approximately $20.9 million. Management believes that this cash balance will be sufficient to fund the Company’s anticipated level of operations for at least the next twelve months. However, the Company will require additional funds to achieve significant commercialization of MelaFind. There can be no assurances that the Company will be able to raise additional financing in the future. Additional funds may not become available on acceptable terms, and there can be no assurance that any additional funding that the Company does obtain will be sufficient to meet the Company’s needs in the long term. In the event that the Company is unable to raise additional funds, the Company has the ability and intent to reduce certain discretionary expenditures.

    MELA’s cash and cash equivalents at June 30, 2011, are liquid investments in money market accounts and deposits with commercial banks, which are held in amounts that substantially exceed FDIC limits.

    Net cash used in operations was $9,547 for the six months ended June 30, 2011. For the corresponding period in 2010, net cash used in operations was $9,054. In both periods, cash used in operations was attributable to net losses after an adjustment for non-cash charges related to depreciation/amortization and share-based compensation, and other changes in operating assets and liabilities.

    For the six months ended June 30, 2011, there was $31 net cash used in its investing activities for the purchase of fixed assets. For the corresponding period in 2010, $636 net cash was used in its investing activities, for the purchase of fixed assets.

    For the six months ended June 30, 2011, no net cash was provided by or used in its financing activities. For the six months ended June 30, 2010, net cash provided by its financing activities was $5,331, representing proceeds from the Committed Equity Financing Facility, as well as the exercise of options and warrants.

    Source: http://biz.yahoo.com/e/110805/mela10-q.html

    Financial Strength (26-Sept-2011)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 1.58 1.79 0.78
    Current Ratio (MRQ) 17.28 1.93 2.19 1.14
    LT Debt to Equity (MRQ) 0.00 213.46 22.85 109.40
    Total Debt to Equity (MRQ) 0.00 260.10 28.99 146.35
    Interest Coverage (TTM) 2.95 1.59 24.0

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    Source: markets.ft.com

    Consensus Estimates Analysis

    # of Estimates

    Mean

    High

    Low

    1 Year Ago

    SALES (in millions)
    Quarter Ending Sep-11 3 0.47 1.41 0.00 1.89
    Quarter Ending Dec-11 3 1.03 2.88 0.00 3.52
    Year Ending Dec-11 3 1.70 4.89 0.00 7.28
    Year Ending Dec-12 3 17.53 33.36 8.62 35.82
    EARNINGS (per share)
    Quarter Ending Sep-11 3 -0.23 -0.22 -0.24 -0.26
    Quarter Ending Dec-11 3 -0.23 -0.20 -0.25 -0.22
    Year Ending Dec-11 3 -0.89 -0.86 -0.95 -1.01
    Year Ending Dec-12 3 -0.71 -0.43 -0.85 -0.35
    LT Growth Rate (%) 1 40.00 40.00 40.00 40.0

    Technical Analysis

    Source: http://stockcharts.com

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Sept26-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    Varian Medical Systems Inc. VAR 50.42 5.91B 14.61 12.76 2.26 2.08
    Bovie Medical Corp. BVX 3.25 57.20M n/a n/a n/a 1.95
    Hologic Inc. HOLX 15.39 4.03B 12.31 10.91 2.26 2.11
    Accuray Inc. ARAY 4.03 242.42M n/a n/a 0.58 0.54
    Varian Medical Systems Inc. VAR 50.38 5.90B 14.60 12.75 2.26 2.08
    Medical Instruments & Supplies Median       16.45 n/a 2.19 n/a
    MELA Sciences Inc. MELA 5.10 128.84M n/a n/a n/a 13.41

    Source: Thomson Financial

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