This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

MELA Burdened By Statistics Issue: Analyst

IRVINGTON, NY ( TheStreet) -- MELA Sciences (MELA - Get Report) claimed success in a clinical trial of its experimental skin cancer detection device only by altering the statistical method used to analyze the data in violation of an agreement with U.S. regulators, charges an independent healthcare analyst in a report issued last week.

In response, MELA says it is confident in the statistical analysis of the data supporting MELAFind, disputing the report by Biologic Equity Research (BER), which has a sell rating on MELA based on the belief that MELAFind will not be approved in the U.S

MELAFind is a computer-enhanced imaging device that takes high-tech pictures of suspect moles and lesions to assist doctors in the early detection of melanoma, the deadliest form of skin cancer.

The U.S. Food and Drug Administration is convening an advisory panel on Nov. 18 to review the accuracy of MELAFind in diagnosing early-stage melanomas. The timing of the advisory panel is a bit unusual in that FDA told MELA last March that MELAFind was not approvable. MELA protested the FDA's rejection, submitted responses to the agency's concerns and demanded an advisory panel be held.

To this day, MELA has not disclosed fully the reasons why FDA issued a "not approvable " letter rejecting MELAfind. The BER report, however, relies on its own analysis to suggest that MELA struck out with FDA because the agency's medical device reviewers discovered the MELAFind pivotal study failed to reach statistical significance despite the company's claims to the contrary.

At Monday's close of $6.95, MELA shares are trading about where they were in March after the FDA's initial decision on MELAFind was announced.

MELA claims that a phase III study of MELAFind met its primary endpoint by detecting accurately 112 of 114 eligible melanomas for a "sensitivity" rate of 98%. The lower confidence bound of the sensitivity analysis was 95.1%, which met the FDA's standard for statistical significance in the study spelled out in a binding agreement with MELA, the company says.

The binding agreement between MELA and FDA covering the conduct of the MELAFind study required the company to analyze the data using a statistical method known as the "exact mid-P" test.

Clearing the 95% hurdle for the lower confidence bound using the mid-P test is important because that means if the phase III study were repeated, there would be a 5% chance or less that MELAFind's sensitivity to detect melanoma would be below 95%.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,663.19 -9.41 -0.05%
S&P 500 2,054.06 +2.24 0.11%
NASDAQ 4,765.3010 +7.4220 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs