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MELA Sciences Is Doomed

Stocks in this article: MELA

WASHINGTON, D.C. ( TheStreet) --The FDA advisory panel convening Thursday to assess MELA Sciences' (MELA - Get Report) skin cancer detection device will be a disaster for the company and its dwindling number of shareholders.

The FDA panel's experts will vote against MELAFind because the FDA has already made it very clear that the noninvasive computerized imaging device, as studied, doesn't work and may actually harm patients.

I don't feel the need to hedge my prediction of a MELAFind rout tomorrow. I've read a lot of damning reviews of experimental drugs and medical devices conducted by FDA in my ten years covering the biotech beat, but I cannot remember any FDA review until MELAFind in which the agency states flatly that approval could hurt patients.

Yet that's what FDA concluded about MELAFind in a review of the device released Tuesday. The FDA's warning is alarming:

"FDA's Mission is to Protect and Promote the Public Health and the FDA review team has significant concerns this device has not been studied adequately for its current indications for use and therefore puts the health of the public at risk," FDA concluded.

MELA shares fell more than 50% Tuesday but were up 2% Wednesday to $3 as analysts who have long backed company tried to reassure investors that MELAFind still had a chance for a positive vote Thursday.

More likely, MELA's stock price will soon fall farther and trade closer to the value of the company's dwindling cash, now a bit more than a $1 a share.

I've been questioning MELAFind's accuracy for months but even I was surprised at the ferociousness by which FDA attacked MELA Science and the device.

The FDA, in its review, accuses the company of reneging on an agreement to study the device in certain patients at risk for melanoma. The FDA concluded that data from a pivotal study showed MELAFind to be less accurate than trained dermatologists in detecting potentially deadly melanoma, raising the risk of misdiagnosis. And MELAFind's benefit was "clinically meaningless" because the device does not reduce the number of biopsies and in fact, may actually force doctors to perform more biopsies, FDA found.

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