Shares in MELA Sciences Inc (Nasdaq: MELA), the medical device company that developed MelaFind, gained 17.2% on volume of 1.67 million in the last trading session before closing at $2.93 after analysts at Cowen initiated coverage on the penny stock. Cowen set an “outperform” rating on MELA stock which is currently trading at -26.83% below and -31.70% below its 50 and 200 day moving averages respectfully. If the upgrade can cause enough momentum to drive the share price back to its 52 week high of $6.96, investors in MELA stock could see an additional 137.54% gain on the penny stock.
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MELA Stock Chart:
Market Cap: 88.87M
(Oct 14, 2011): 6.96
(Aug 10, 2011): 1.75
50-Day Moving Avg: 4.00
200-Day Moving Avg: 4.29
Avg Vol (3 month): 340,144
Avg Vol (10 day): 710,688
Shares Outstanding: 30.33M
% Held by Insiders: 4.16%
% Held by Institutions: 24.90%
(as of Apr 30, 2012): 6.78M
MelaFind is the Company’s breakthrough non-invasive and objective automated point-of-care system for use when a dermatologist chooses to obtain additional information for a decision to biopsy clinically atypical pigmented skin lesions with one or more clinical or historical characteristics of melanoma.
Note: Every hour, one American dies of melanoma and approximately fifteen are diagnosed with the disease.
In the beginning of May, MELA Sciences announced their Q1 2012 financial results of which the Company reported revenues of $11,250 compared to no revenues reported for the same period in 2011. MELA’s net loss for Q1 was $5.8 million, -$0.19 per diluted share, compared to a net loss of $4.9 million, -$0.20 per diluted share, for the same period in 2011. As of March 31, 2012, MELA Sciences reported having cash and cash equivalents of $22.3 million which would roughly be enough to sustain the Company at its current pace for the next 11 months without having to seek outside funding.
About MELA Sciences:
The Company is a medical device company focused on the commercialization of its flagship product, MelaFind®, and its further design and development. MelaFind is a non-invasive tool to provide additional information to dermatologists during melanoma skin examinations. The device uses light from visible to near-infrared wavelengths to evaluate skin lesions up to 2.5 mm beneath the skin. The device provides information on a lesion’s level of morphologic disorganization to provide additional objective information that may be used by dermatologists in the biopsy decision-making process. MelaFind has been approved by the US Food and Drug Administration for use in the US. In addition, MelaFind has received CE Mark approval and is approved for use in the European Union.
Bottom Line: MELA Sciences’s stock is worth adding to the list of penny stocks for those who treat penny shares as long term investments. Percentage gains like the last trading session where MELA stock price was as high as $3.12 are not going to be a daily trend since the shares have a beta volatility of -0.52.
If and when MELA PPS gets back to the 50 Day Moving Average, you’re looking at a 36.52% gain.
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