Investopedia: MELA Gets A Surprising "Yes"

When it comes to the FDA these days, almost anything is possible. In the last year, the agency has blocked applications that seemed like slam-dunks and granted approvals to long shots. Even though the FDA's position on MELA Sciences' (Nasdaq:MELA) MelaFind during the company's advisory panel meeting could best be summarized as "over our dead bodies," the FDA surprised the market Monday morning by issuing an "approvable letter" to the company, and MELA's stock is likely to soar in the immediate aftermath. (For more on the FDA, and the effect it can have on stock prices, read Pharmaceutical Sector: Does The FDA Help Or Harm?)


Not Quite "Yes," but Close Enough
The FDA has not given the company the green light to start selling the MelaFind device yet. What an approvable letter means, in essence, is that the FDA finds that a device is more or less approvable as is but there have to be some additional changes to labels, user guides, training, and post-approval trial guidelines. Importantly, these issues never require a second clinical trial to resolve and I cannot immediately recall an example in the last 15 years where a company and the FDA were not able to resolve these issues and go from "approvable" to "approved."

In other words, while the company will not begin shipping MelaFind to U.S. doctors on Tuesday, the finish line is very much in sight.



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http://stocks.investopedia.com/stock-analysis/2011/MELA-Gets-A-Surprising-Yes-MELA-CYBX-ABMD-GIVN-ATRC-SPNC-HNSN0926.aspx