Mela Sciences (NSDQ:MELA) CEO Joe Gulfo tells MassDevice that he feels like a kid in a candy store as he takes the company back to market – and not even the ever-looming burden of the medical device tax can dampen his enthusiasm.
Mela Sciences baked the effect of the 2.3% levy, set to take effect next year, into its financial planning, so it’s not playing a big role in the re-emergence of a company celebrating its 1st month back on the market.
"There’s things I can control and things I can’t control," Gulfo told us. "Do I like the tax? Of course not. But it won’t have the kind of impact on my business that you’ll see in others."
"I think I’m at a slight advantage, to be quite honest," he said. "I don’t have a lot of revenues or earnings track records yet. For some companies, the tax is going to take away their projected earnings, it’s going to take away from their valuations and dividends and all that. I don’t have to worry about that, because I’ll only be operating commercially in the environment of that tax."
Mela Sciences this month launched the MelaFind handheld melanoma detection system in the U.S. and Germany, but it isn’t the company’s first rodeo. A bid to develop a cavity-detection device was ditched in 2005 to focus on MelaFind.
"We just couldn’t devote ourselves to it," Gulfo said of the Difito dental system. "Classic small company – we had very limited resources and I had to make a decision."
Gulfo recommended to the board that Mela Sciences cut its losses on the Difito device, which was subsequently licensed to Danaher (NYSE:DHR).*
Mela Sciences’ grand return to commerce comes 4 months after it won FDA clearance for the MelaFind system, a process that took more than 2 years, 2 FDA panel reviews and a citizens’ petition, making the Irvington, N.Y.-based company a poster child for charges of unpredictability at the FDA.
"We’re collateral damage in the efforts to re-design the 510(k) program," Gulfo told MassDevice back when the company was engulfed in bureaucratic red tape. He was in a much better humor this week, brimming with enthusiasm as he spoke of Mela’s rebirth and a recent study he says demonstrates the clinical benefits of the MelaFind device. That study compared the sensitivity and specificity of dermatologists’ diagnoses alone against their calls when using data from MelaFind.
"Before knowing the MelaFind information, the doctors’ sensitivity – the ability to detect disease when disease is really there – was only 69%. But after they were told the MelaFind information it jumped to 94%," Gulfo told us. "Only 13% of doctors alone, before knowing the MelaFind information, would have caught all of the melanomas in the sample that they were tested on, and that jumped to 70% after knowing the MelaFind information."
The study was designed after an FDA panel in November questioned how MelaFind would affect dermatologists’ decision-making and raised concerns that doctors could miss melanomas by skipping biopsies and over-relying on the device.
In documents released ahead of a November PMA review, regulators said the risk associated with the device’s use did not outweigh the benefits of circumventing a skin biopsy. The agency wrote that "since melanoma is often a fatal disease and the standard of care is to seek early detection and biopsy on any suspicious lesion … this device has not, with the current data, demonstrated any true clinical trade-off and may potentially cause more harm than good to the health of the public."
MelaFind won a positive vote in the end, but sought to allay any misgivings about the device with a 179-physician study, published in the Archives of Dermatology, demonstrating how dermatologists might be swayed by using MelaFind in diagnosing lesions.
"What we learned was that doctors do exactly what they’re supposed to do with a diagnostic test. They incorporate it into their decision-making," Gulfo told us. "If they’re convinced something is something, they won’t change their minds – but if they’re on the fence, a little more input will be incorporated and could be incredibly useful."
When we spoke, Gulfo was on hand for the 70th annual meeting of the American Academy of Dermatology in San Diego. He fairly gushed about the feedback he received from doctors in the conference’s exhibition hall, whom he said spent ample time at the company’s booth learning about MelaFind.
"It’s a skewed sample, because they’re coming to our booth, so it’s not like we’re standing in the middle of the aisle and asking people as they walk by whether they want MelaFind," Gulfo said. "But if you’re going to come to our booth and spend 15 minutes there – you know, I’m not that handsome. They’re coming for MelaFind."