Mela Sciences Inc.’s (NSDQ:MELA) stock doubled in price overnight after the a Food & Drug Administration panel voted in favor of its melanoma-detecting device’s safety and efficacy.
MELA shares were up 105.5 percent to $5.24 before the trading day opened. Through yesterday’s close, the shares lost 60 percent of their value in the past three months. The company’s shares’ gain remained around 95 percent up in mid-morning trading.
The FDA’s General and Plastic Surgery Devices Panel advisory panel recommended approval of the device on a narrow 8 to 7 vote. The review panel’s vote is non-binding, but the FDA often takes its cues from advisory panels in making final rulings omn pre-market approval applications. The vote comes two days after the release of a scathing internal FDA review of the Irvington, N.Y.-based company’s MelaFind device. The FDA said the device as a biopsy replacement may cause "more harm than good," and was not studied adequately and urged the company to run a new clinical trial.
Law firms were quick to pounce, announcing “investigations” of allegations that the company misled shareholders about the device.
The company’s shares tumbled to a low of $2.53 after the release of the negative review, down from a January peak of $12.24. MELA went public in 2005 for $5 per share.
Physicians testifying on behalf of the device at yesterday’s panel suggested that the MelaFind, which the company designed for early diagnosis of catch skin, would be a welcome addition to their cancer detecting tool kits.
Dr. Michael Newman, who participated in the first clinical trial for MelaFind, told the panelists that he’s a good dermatologist but not as good as the FDA would lead you to believe. He said he can use all the help he can get, according to The Street.
University of Pittsburgh dermatologist Dr. Laura Ferris, who also studied MelaFind for the company, told the panel that doctors like her “need help in evaluating these lesions.”
“The decision to biopsy is subjective, and it’s variable. Having an objective device to give me input on making that decision would be very helpful,” she said, according to Reuters.
The FDA has yet set a date for its decision on the MelaFind PMA application, according to the company.