More than two years, two panel reviews and one citizen’s petition after Mela Sciences (NSDQ:MELA) signed on for a 6-month FDA review of its MelaFind melanoma detection system, the company won FDA clearance for the U.S. market.
The Irvington, N.Y.-based company’s shares shot up 5 percent on the news, to $5.63, from last night’s close at $5.39.
"The FDA approval of MelaFind marks the most important achievement in the company’s history and represents a significant advance for the millions of Americans who are at risk of developing this terrible disease," president & CEO Dr. Joseph Gulfo said in prepared remarks.
It’s been a good season for the company, which also won CE Mark approval in the European Union for MelaFind in September.
The FDA green light marks an end to the years-long plight that made Mela Sciences a poster child for charges of unpredictability at the FDA, culminating in a Progressive Policy Institute report, "Is the FDA Strangling Innovation?"
In July 2009, Mela Sciences submitted a pre-market approval application for the MelaFind. The company had already signed a definitive agreement with the FDA in 2004 detailing the precise path to clearance and had launched the largest melanoma trial to date to support the application.
The system proved highly effective in trials. Mela anticipated FDA panel review in Q1 2010, but got an "unapprovable" letter instead. The negative vote "poisoned" public and medical opinion against the company, Gulfo told MassDevice, and led to several lawsuits from shareholders after shares sank abruptly from $6.37 on Nov. 15, 2010, to $2.53 just two days later, a 60 percent slide.
"It’s very important to understand that that non-approvable letter was illegal," Gulfo told us during a one-on-one podcast interview. "It was illegal because MelaFind is a breakthrough PMA product and a first-of-a-kind product and the statute, the regulations, say that a product of that type has to undergo an advisory committee meeting prior to a decision letter. MelaFind was denied that right."
In June, Gulfo told MassDevice that the company was an unintended victim of the push for reforms at the FDA’s Center for Devices & Radiological Health.
"We’re collateral damage in the efforts to re-design the 510(k) program," Gulfo told us. "I’m just being a megaphone for transparency."
But less than two months ago, the FDA issued an "approvable letter" for MelaFind, sending MELA shares soaring 90 percent from a pre-weekend Sept. 23 close of $3.18 to $6.06. Shares settled down to $4.93 by the end of that day – still a 55 percent spike.
With U.S. market approval in hand, Mela plans to roll out MelaFind in the Northeast in the first quarter next year, according to a press release.