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MELA Sciences: Not So Doomed

Stocks in this article: MELA

WASHINGTON, D.C. ( TheStreet) -- MELA Sciences (MELA - Get Report): Not so doomed.

An FDA advisory panel voted Thursday night 8-7 in favor of recommending the approval of MELA's MELAFind skin cancer detection device. A lone panel member abstained from the final vote.

The positive vote in MELAFind's favor came despite strongly worded statements from FDA reviewers at the meeting that the MELAFind clinical data, as submitted, did not support the device's approval.

Regardless, MELA is still very much alive, so I need to eat some crow. I predicted a negative vote at Thursday's panel based on the overwhelmingly negative critique of MELAFind released by FDA in advance of the panel.

I was wrong.

Congratulations to MELA and its chief executive Joe Gulfo. The company dealt with withering questions and criticisms from the panel and FDA and ultimately got the positive vote it sought.

MELA shares were halted for trading all day Thursday at $2.53. The stock, heavily shorted, will almost certainly head higher once trading opens again. How much so depends on how confident investors feel about the eventual approval of MELAFind.

Advisory panels are just that, advisory, which means the final approval decision resides with FDA. I spent 10 hours live-blogging Thursday's MELAFind panel and what I heard from the FDA didn't seen overly reassuring for the prospects of MELAFind's near-term approval.

"The FDA review team recommends that this device needs a new prospective study," is how the FDA summed up its presentation to the panel members before the voting began.

Whether the close 8-7 vote tally on the question of MELAFind's risk-benefit and the overall comments from the panel members persuade FDA to soften its negative opinion and approve MELAFind remains to be seen.

In many ways, the MELAFind panel reminds me of another contentious medical device panel. In 2004, FDA was harshly critical of Cyberonics' (CYBX) effort seeking the expanded approval for a nerve stimulation device as a treatment for patients with severe depression. The FDA's review of the Cyberonics' device was very negative yet an advisory panel still voted to recommend approval. The FDA decided to ignore the panel's vote and rejected the device.

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