This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Biotech Stock Mailbag: Mela Sciences

Stocks in this article: MELA DCTH DSCO KERX CYTX ACHN VRUS

Perhaps Cytori Therapeutics (CYTX) is the best proxy for making an educated guess about how well Mela will perform commercially in Europe. Cytori has a CE Mark for its Celution System device, which extracts stem cells from fat tissue for use in reconstructive surgery. Cytori has not been able to gain FDA approval for Celution System, however, because the company hasn't yet conducted the clinical trials FDA requires.

Cytori has convinced a smattering of European cosmetic surgeons to purchase and use Celution System, but nowhere near the levels required to make Europe a profitable business opportunity.

Mela lacks the infrastructure, expertise and funds to sell an unproven medical device in Europe. My best guess is that Mela, just like Cytori, will find it difficult to generate significant revenue in Europe. I see no reason to change my bearish fundamental view of the company and its stock.

And for the record, my skepticism over Mela and its CE Mark is consistent with similar bearish view I hold about Delcath Systems (DCTH).

Funny coincidence. After Achillion Pharmaceuticals (ACHN) CEO Michael Kishbauch wrapped up his investor presentation Wednesday at the Stifel Nicolaus Healthcare Conference, I saw him chatting with a reporter from DealReporter.

Thursday, DealReporter published a story claiming that Achillion's CEO was considering a merger or a hepatitis C drug licensing deal with Pharmasset (VRUS).

Really? That's a head scratcher. I can think of no reason why Pharmasset would want to sign a deal with Achillion. I'm not the only one who has doubts about this rumor. Brean Murray Caret biotech analyst Brian Skorney is an Achillion fan, thinks their portfolio of early-stage Hep C drugs has a lot of potential, but a deal with Pharmasset? Not going to happen.

"Pharmasset has everything they need right now," Skorney told me. "Any Hep C company would be open to partnering with Pharmasset and that is likely all that Achillion management meant by saying they would entertain a Pharmasset deal."

At a New York investor conference on Thursday, Pharmasset's CEO said the company had no interest in acquiring any outside Hep C drug assets. That should pretty much put the Achillion rumor to rest -- until the next DealReporter story.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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