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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Analyst, Bullish on Mela, Misquotes FDA

Stocks in this article: MELA

Updated with response from analyst.

NEW YORK ( TheStreet) -- The chief U.S. medical device regulator did not tell Congress that rejecting Mela Sciences' (MELA) skin cancer detection device was a mistake, contrary to what a Needham & Co. analyst told his clients last week.

Needham medical technology analyst Dalton Chandler published a research report last Wednesday in which he argued that the U.S. Food and Drug Administration may be under additional pressure to approve Mela Science's MelaFind skin cancer detection device because European regulators granted the company a CE Mark, or regulatory clearance, to begin selling the device there.

In his report, Chandler writes: "The head of the CDRH, the division reviewing the MELA application, is on record in congressional testimony saying that the original 'non-approvable' letter was a mistake and should not have been sent, and if the data support MelaFind approval (and we already know it does via protocol agreement) that the device would be approved."

But a review of the congressional testimony given this summer by Dr. Jeffery Shuren, director of the FDA's Center for Devices and Radiological Health (CDRH), shows that FDA's top medical device regulator said no such thing.

In response to a question about the FDA's handling of the MelaFind review, Shuren responded: "The decision the first time around not to have the device go to the advisory panel was wrong. The staff made the wrong call. It should have been allowed to go to advisory panel. It eventually was. It was supported. It was a very slim margin. It was 8-7."

Shuren, in his testimony, says his CDRH reviewers erred by not convening an advisory panel to review MelaFind before rejecting the device in March 2010. Shuren said nothing during his testimony about the FDA making a mistake by issuing a non-approvable letter -- FDA jargon for a rejection.

"I went back and reviewed Shuren's quote and I should have worded it his research note differently," said Chandler. Since Shuren acknowledged that his medical device reviewers should have brought MelaFind in front of an advisory panel, it means that FDA would not have sent Mela a non-approvable letter prior to the panel, he added.

Chandler says he is checking with Needham's compliance department to determine whether a public correction to his note is required. He has a buy rating on Mela Sciences. Mela is an investment-banking client of Needham, which has helped the company raise money from investors.

1 of 2

Select the service that is right for you!

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!


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

  • 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