MELA Sciences (NASDAQ:MELA)

CAPS Rating: 1 out of 5

A medical device company which focuses on designing and development of a non-invasive, point-of-care instrument to assist in the early diagnosis of melanoma.

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Player Avatar dynam000 (< 20) Submitted: 4/21/2010 9:00:48 PM : Underperform Start Price: $7.59 MELA Score: +63.72

Hi Folks and fellow CAPS, First Post ever!

I am new to MF Pro and just began reviewing their recommendations when I ran across the MELA info. I have significant R&D, Regulatory, and commercialization experience in biotech/pharma with about 10 years specifically in medical imaging/oncology.

Mela's response and desire to have a panel review as a result of the FDA's request is quite common and predictable on the company's behalf. While not a death sentence, there is certainly increased risk surrounding the regulatory approval. Does anyone have access to the FDA's response to MELA? If there is any reference to expanding the clinical dataset the company will obviously need more cash to complete the approval process. That spells serious dilution in this market.

The aforementioned FDA letter would provide a lot of insight as to the level of risk and likelihood of approval for the MELA imaging device.

Also, there are a lot of bullish posts on the MELA board. Where is everyone obtaining the data demonstrating efficacy that was submitted to the FDA? Is this info on the MF site? Are you using research articles providing exerpts of clinical data submitted to FDA? As a example a poster states that the FDA is "crazy" for not approving a test that is 98% accurate. I would immediately ask what the specificity, positive and negative predictive values for the test are? What specific questions is the FDA asking of the company? The aforementioned are critically important at this point.

Any insight or anyone obtaining info under freedom of information would help me provide more meaningful posts in evaluating the regulatory approval issues now surrounding MELA's submission to FDA.

With the potential for such widespread use I would venture to guess the FDA is scrutinizing the statistical analysis and data set quite closely. The potential miss for the FDA is that they approve a imaging device that ultimately has a high rate of false positives which would increase the number of biopsies, adverse events, and costs to the healthcare system. Ramifications for false negatives are obvious.

Fool on,
Brett

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Member Avatar needtobsaid (< 20) Submitted: 4/27/2010 12:09:00 PM
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If you check Mela Sciences web page and their last web cast you will hear as far as Mela Sciences is concerned, FDA is not asking for further clinical data but some other questions that Mela Science would be able to respond to w/in the next 3-4 weeks. Mela Sciences did not disclose the questions the FDA was asking. Why they did not let the investors know the what the questions, I have no idea.

I believe the FDA marches to the beat of their own drum regardless of any companies business situation. Would the FDA be extra vigilant with this device anymore than any other life saving medical device? I would hope they would all be the same.

Is any thing 100% guaranteed? No, but even with biopsies performed on a patient he/she could still die if the melanoma was discovered too late. Getting into see a dermatologist takes forever. The strength of the Melafinder is its ease of use and the 98% confidence red flag it can raise to alert the patient or doctor or technician. Melafind could be done at health fairs, doctors offices, by tech's. Mela Science has disclosed that it had met the 98% confidence parameters required by the FDA before submitting pre-PMA.

Member Avatar dynam000 (< 20) Submitted: 5/6/2010 6:31:47 PM
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Made the inquiry for FDA letter and MELA response to FDA letter. MELA Investor relations stated that the information was not public and would not be disseminated.

Member Avatar dabooda (< 20) Submitted: 5/17/2010 12:25:25 PM
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Dear dynam000,

I have been reading up on Melafind and have listened to the conference call. I hold a large position on MELA.
Given your experience in biotech R&D can you help me understand the specificity information that has been
released by Melascience and restated by media/postings? How do the following statements correlate/agree?
MelaFind's specificity for all melanomas and borderline lesions was 9.9%, compared with 3.7% for the clinicians (P = .02), and the biopsy ratios of the system were 7.6:1, compared with 7.9:1 for clinicians.
The ABC news coverage from Sept. 27, 2009 states that Dr. Darrell Rigel of NYU says "unnecessary biopsies could be reduced by 90%"
Thanks,
Barb

Member Avatar markofzorro (30.21) Submitted: 5/18/2010 2:27:33 PM
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From the MELA Blurb at http://medicalphysicsweb.org/cws/article/newsfeed/37805:

“MelaFind detected 112 of 114 (98% sensitivity …”

Sensitivity is the proportion of people with melanoma who have a positive MelaFind test. A perfect test would be positive in 100%, but MelaFind is very, very good according to this data.

In practice, this means if you are a doctor and suspect somebody may have a melanoma, a positive test will increase your suspicion, and you will go on to biopsy and treatment -- perhaps earlier than if you weren’t sure and waited to see if the tumor grew before biopsy. If you have a NEGATIVE test, you can be pretty confident the patient doesn’t have melanoma, because pretty much everybody with melanoma will have a positive test.

“MelaFind's specificity, the ability to accurately rule out disease, was significantly superior (9.5%) to that of the study dermatologists (3.7%) … “

Sensitivity is the proportion of healthy people without melanoma who have a negative test. Again, in a perfect world, 100% of healthy people would have a negative MelaFind test. In fact only 9.5% of them do, and 90.5% have positive tests. Still MELA’s test is about twice as good as an expert dermatologist (3.7%).

In practice, this means that if your patient has a POSITIVE test, they might have melanoma or just be part of the false positives in healthy people, so the only way to rule out melanoma is to go ahead and biopsy.
So the test is most useful when the doctor suspects melanoma, but the test is negative. Then he can reassure the patient and spare them a biopsy.

There is a trade off between sensitivity and specificity, if you make a test more sensitive, it is hard to make it more specific. Because melanoma is a devastating, life-threatening cancer, MELA chose to make the test very specific. This way nobody with cancer gets missed. The cost of an extra biopsy is relatively small both medically and financially.

Writing this little summary for you makes me wonder how useful this test will really be, since its utility will be for suspect patients with negative tests. If and when the FDA approves it, I may just dump my shares, take any profits, and count my blessings.

Note: Tests are better evaluated by using predictive values positive and negative. If these favor MelaTest, I may hold on for the ride. We’ll have to wait for them to publish this data.

Member Avatar dabooda (< 20) Submitted: 5/19/2010 12:18:02 AM
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Thanks for your explanations, markofzorro. (Cool handle, by the way).

Did you mean to say "MELA chose to make the test very "sensitive" ?? Because it seems their sensitivity greatly exceeds the specificity.
With regard to the marketability of Melafind, I think it will initially be driven by public demand. 30% of my co-workers have dealt with Melanoma issues. One, a 53 y/o female faces the threat of several biopsies each year since having one positive. The biopsies require a few sutures and restrict movement/clothing/showering/travel. Often these are on the legs, an area that does not "repair" well.
She would welcome the Melafind !! Another co-worker's melanoma (found at age 17) was nearly passed over because the parents couldn't believe this "mole" was a potential issue and were initially refusing the procedure. In that case it would have been fatal.

The dermatologist for the 3rd co-worker could have used the backup of a Melafind analysis because he hesitated for years before excising the growth to the left of her eye, not wanting to cause a cosmetic blemish.

Melafind might encourage more people to get checked. I have been to 3 dermatologists. I found 2 of them to be worse than worthless.
Imagine a full body check without removing your shirt, or simply asking me what my concern was, and then there was the 9 second scan of my seriously freckled extremeties. Melafind and it's public service promo might encourage people to be more proactive and informed.

Regarding the stock... The shareholder meeting of 4/30 approved an amendment authorizing shares of common stock to increase from 30 mil to 45 mil. I like to presume that they anticipate demand and the need of $$$ for production. I did at one time check out the website of the European company that has the contract for production...made me feel more secure in my investment. PLEASE everyone make me feel secure...may not have bet the "farm" but certainly a few paddocks.

Member Avatar dynam000 (< 20) Submitted: 6/30/2010 9:11:09 PM
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Markofzorro>> good post. Very good call on PPV and NPV regarding regulatory approval for diangostic tests. FDA is probably evaluating the difference in area between ROC curves for the gold standard and MELA Find in addition to cost of biopsy as you suggested in your earlier posts.

Just to supplement your info for dabooda:

The sensitivity tells us how likely the test will come back positive in someone whom has the disease. Among all people that have the disease, what proportion will test positive? 95% sensitivity is pretty good.

The specificity tells us how likely the test is to come back negative in someone who does not have the disease. Among all people without the disease, what proportion will test negative? False negatives create a lot of costs to the system, mental anguish for the patient, etc...

The positive predictive value tells us how likely someone is to have the disease if the test is positive.
A high PPV or positive predictive value means that if you test positive, you have a high chance of actually having the disease. The higher the better from the perspective of the testing being correct. Obviously not the fact that you have cancer in this case.

The negative predictive value tells us how likely someone is to not have the disease if the test is negative. Among all people that test negative, what proportion truly do not have the disease? A high NPV means that if you test negative, you are very unlikely to have the disease. Rule the disease out. This is what the FDA generally looks for when comparing a new diagnostic "screening" test to a current gold standard.

If you take the sensitivity and specificity for the gold standard (72% and 3.7% for a dermatologist, respectively) and the new MELA Find device (98% and 9.5%, respectively) we can approximate the Positive and Negative predictive values between the two diagnostic tests. You must also take prevalence into consideration, you can find out why in a biostats class. On the Cleveland Clinic website prevalence of the invasive form of melanoma is estimated to be 1:63 Americans. If you double that to 2:63 to cover both invasive and noninvasive forms of melanoma we can approximate prevalence to be ~ 12,000,000 people in the USA. PPV and NPV between the current gold standard (dermatoligists) and MELA Find can now be approximated with the current data available:

MELA Find PPV ~ 92.0% and NPV ~ 8.9%
Dermatologist PPV ~ 96.3% and NPV ~ 4.3%

What does this tell us. Both the dermatolgist and MELA Find device do a relatively good job at predicting melanoma if at the end of their test (Viewing the mole) they beleive it is positive. You can be slightly more reassured that if a dermatologist tells you "you have melanoma", you actually have it. Now here is the kicker. In and of themselves, the MELA Find and or dermatologist are a poor predictive indicator for ruling out the disease, i.e. screening. Hense with litigation, patient pressure, etc... if the mole is suspicious a biopsy is recommended. Over 90% of the time a biopsy is currative for non-invasive melanoma anyway.

From the FDA's perspective they would then look for statistical difference between the two tests on the basis of NPV and PPV via a reciever operator characteristic curve (ROC). There is software that does this, but there is also underlying data (you need the actual number of persons in the clinical trials: TP, TN, FN, FP) that is missing for me to perform the calculation in this write up.

To markofzarro's point: From a insurance and the FDA's perspective what medical value is the MELA Find device providing when it is not a screening test, and it's Positive Predictive Value is lower than that of a dermatologists?

The above NPV and PPV are only estimates and I do not have access to the actual datasets for the MELA Find Trial. Another outstanding issue is the dermatologists sensistivity in the clinical trial was not revealed by the sponsor. The company states that generally dermatologists have a 72% sensitivity rate in diagnosing melanoma.

The numbers on the surface look significant, but when compared from a NPV and PPV perspective things put the risk of approval in a better light.

Fool on!

Member Avatar dabooda (< 20) Submitted: 6/30/2010 11:21:04 PM
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Thank you for you time and expertise, dynam000. Much appreciated.

MELA continues to update their reader studies which depicts dermatologist sensitivity data.
I am no expert, just an investor with a science background. I happen to know a few people who have been
melanoma positive.

I have reviewed many of the MELA studies going back 10 yrs. They mention the vast range of dermatologist ability and consensus
when moles are examined. Unless a patient visits 15 dermatologists, the analysis provided by Melafind would certainly be superior to the singular opinion of a random dermatologist. This is the VALUE of the device in the "real world" IMO.
I know of a man who routinely visits 3 dermatologists for fear that his next melanoma will be missed.
I know of a woman who plans to refuse further biopsies due to the extreme scarring and deformities on her legs.

I have reviewed devices of competitors including devices in development. Everything seems to require skill and be subjective.

Member Avatar dynam000 (< 20) Submitted: 7/6/2010 2:46:29 PM
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I've been thinking about pulling the trigger on MELA since the Fool options group listed a play on them as a speculative call option earlier this year/late last year. Been doing a little research as you can see above.

I would have bought the option if the price would have fell below 5 prior to the advisory board meeting.

In my opinion the recent run up is all speculation based on the prospective advisory board meeting. There has been no new data released or information detailing the FDA's concerns. Just as a FYI, the advisory board's opinion does not mean the FDA will approve the application contrary to a lot of the posts on this site. FDA can do as they please. The FDA's decision can be as long as 180 days after the advisory board adjourns. Normally, you will have a action by the agency within 30 days. I would have been a lot more willing to buy if MELA would have released excerpts from the FDA letter requesting additional information. The aforementioned has kept me from making a purchase.

Another looming pink elephant in the room is why raise the money now? Obviously, 1) their burn rate requires it. 2) they will need money to manufacture the product. 3) They will need money to Market, Sell, and Launch the product. and... 4) they will not be able to raise any $$$ if the FDA rejects their application... so raise the money now.

Problem is the entire company is hanging on the FDA's approval at this point. Any bad news would have precluded MELA from landing the dollars necessary to either complete a add on trial to answer any of the FDA's concerns or questions. I believe the recent downward trend is a reaction to fears that #4 above might be realized. Don't know for sure. Market has also been trending down.

Be nice to be a fly on the wall and take away a few key pieces of information. Personally, I may be late to this party, but I can just as easily fly to vegas and play craps with about the same odds until some more information is released.

Member Avatar dynam000 (< 20) Submitted: 8/6/2010 10:46:11 PM
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I just read the SEC filing on 8/6/2010.

Real interesting how mgmt now states that they were informed by the FDA that The melafind PMA was not approvable by the original action date. I guess I should check the press releases, but I believe mgmt stated the FDA simply extended their review date and made several inquiries regarding the pma. Simply stated Mgmt's omission of "not approvable" is material if it not in the original press releases. I'm sure a lawsuit will originate if the aforementioned is accurate.

The MelaFind� pre-market approval ("PMA") application was filed in June 2009 and is under review at the U.S. Food and Drug Administration (the "FDA" or the "Agency"). The pivotal trial conducted to establish the safety and effectiveness of MelaFind� was performed under the auspices of a Protocol Agreement. In addition, the MelaFind� PMA has been granted Expedited Review by the FDA. On March 19, 2010 the Company received a series of questions from the FDA and was notified that the MelaFind� PMA was not approvable at this time. In addition, the Company was advised that the review process had been extended by a period of up to 180 days following the submission of our response to the FDA action letter. Since receiving the questions from the FDA on March 19, the Company has had a series of interactions with the Agency. A draft response was submitted to the FDA in mid-April, an in-person meeting was held with the Agency to clarify several questions and the final formal response to all questions provided by the FDA was submitted to the Agency on May 7, 2010. The FDA has informed the Company that the date for the Melafind� Panel Meeting of the General and Plastic Surgery Devices Panel which was originally scheduled for August 26, 2010 is now scheduled for November 18, 2010.

Member Avatar BBRAF (< 20) Submitted: 10/7/2010 4:57:42 PM
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I appreciate all of this great info.i have a good amount of shares but i understand that this stock is extremely speculative and i believe that ono should not own it unless one is prepared to lose it all.

good luck.

Member Avatar dabooda (< 20) Submitted: 10/11/2010 11:30:33 AM
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Hello again dynam000 and markofzorro

It is approaching crunch time on MELA. There are a couple of factors that I believe favor MELAfind approval.
#1 - skin cancer is dramatically on the rise and young people
are such a rising category of new positives.
#2 - not very many patients have access to "expert" dermatologists.
#3 - MELAfind physically causes no harm and has a high sensitivity
#4 - it is the only instrumentation that does not require the presence of a human "expert" for interpretation of results

I live only 70 miles from Manhattan. 75% of the dermatologists around here actually scare me.
I am a medical professional and have visited these offices as a patient and have had related
conversations with other medical professionals regarding their similar experiences.

Those of us who live in urban environments often forget that access to specialty medical care
is a real problem for a huge portion of the population (true of any country I presume - maybe not Iceland).

Don't you think this infleunces the FDA?

Member Avatar dynam000 (< 20) Submitted: 11/16/2010 10:54:14 AM
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Unfortunate circumstances here.

Poor study design and/or execution. Management witholding material
information, etc... The aforementioned was all known back upon the first non approvable letter from the FDA. Too bad Mgmt was not forth coming.

Even if the technology holds the promise of assisting dermatologists and cosmetic surgeons in diagosing melanoma the Mgmt team at MELA have sufficiently created enough legal and regulatory issues that the technology wont be on the market for another 3-5 yrs.

Dynamo

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