MELA Sciences Reports Second Quarter 2014 Financial Results and Provides a Business Update
Wed August 13, 2014 4:01 PM|GlobeNewswire | About: MELA
IRVINGTON, N.Y., Aug. 13, 2014 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. ( MELA) (the Company), developer of the MelaFind ® system, a non-invasive optical diagnostic tool that assists dermatologists in the diagnosis of melanoma at its most curable and cost-effective stage and that has received both FDA Pre-Market Approval (PMA) for the U.S. and CE Marking certification for the European Union, today announced financial results for the three and six months ended June 30, 2014. The Company also provided a business update.
Business Highlights for the Second Quarter and Subsequent Weeks:
An application was submitted for a Current Procedural Terminology (CPT®) code, which is the first step in gaining Medicare Part B reimbursement from the Centers for Medicare and Medicaid Services (CMS). The Company's procedure could be eligible for payment under Part B as early as 2016. The Company will also commence efforts to obtain reimbursement from private insurance companies as the CMS review process proceeds.
Additional studies demonstrating the effectiveness of MelaFind predictive probability information when used by dermatology residents and dermoscopists strongly correlate with previous study findings showing the benefit of MelaFind on dermatologists' decisions to biopsy.
Significantly strengthened the balance sheet resulting from the previously announced closing of a private placement that will allow for continued efforts in obtaining reimbursement and the further commercialization of the MelaFind system.
Completed a 1-for-10 reverse stock split and regained compliance with NASDAQ listing requirements.
Named Michael R. Stewart to its Board of Directors, adding specific reimbursement and broad dermatology and medical device experience to the Board.Rose Crane, MELA Sciences President and CEO, stated, "This has been a very productive quarter for MELA Sciences. We raised capital that will allow us to continue our progress and we took steps toward obtaining CMS reimbursement. As stated previously, our goal is to continue to expand the use of MelaFind toward becoming the standard of care."
Second Quarter Financial Results:
(Compares the second quarter of 2014 to the second quarter of 2013, unless otherwise stated)
Revenue increased to $225,000 from $144,000 due to new MelaFind®system sales as we implement the change in the Company's business model from a lease-based model to a sales-based model. A reduction in placement fees partially offset the increase in system sales.
Total expenses decreased by $2.6 million, consisting of $0.7 million in research and development expenses and $1.9 million in selling, general and administrative expenses in accordance with the cost reduction plan initiated in August 2013.
The change in the fair value of the Company's warrant liability increased to a benefit of $4.9 million from an expense of $105,000 and in each period represents warrants accounted for as derivatives in separate transactions. The benefit results from the reduction in the Company's stock price for the period.
Net income totaled $627,000, or $0.12 per share on a fully diluted basis, compared with a net loss of $7.4 million, or $1.72 per share on a fully diluted basis. The second quarter 2014 profitability resulted from the warrant liability benefit noted above. The operating loss, which is more reflective of the Company's operating activity, improved to $4.3 million compared with $7.0 million for the 2013 period.
Cash and cash equivalents totaled $4.2 million, compared with $3.8 million at December 31, 2013.Year to Date Financial Results:
(Compares the six months ended June 30, 2014 to the six months ended June 30, 2013, unless otherwise stated)
Revenue increased to $323,000 from $288,000 due primarily to the change in business strategy from a lease-based model to a sales-based model, which resulted in sales for the current quarter and a decrease in placements of the MelaFind® systems quarter to quarter.
Costs of revenue decreased to $2.2 million from $2.5 million, primarily due to a one-time charge for inventory obsolescence of MelaFind accessories taken during the six months ended June 30, 2013.
R&D expenses decreased to $1.1 million from $2.4 million and SG&A expenses decreased to $6.0 million from $9.0 million, due to previously stated cost reduction measures, primarily due to headcount and related expense reductions.
The change in fair value of the Company's warrant liability increased to a benefit of $5.0 million from an expense of $90,000 and in each period represents warrants accounted for as derivatives in separate transactions. Net loss totaled $7.4 million, or $1.46 per share on a fully diluted basis, compared with $13.9 million, or $3.38 per share on a fully diluted basis, for the same period in 2013. This reduction resulted from the $5.0 million benefit from the warrant liability offset by $3.4 million in liquidating damages from the February 2014 financing. The reduction in operating loss of $4.5 million from $13.5 million in 2013 to $9.0 million in 2014 is more reflective of operating activities and resulted from Company's cash conservation and cost reduction activities.Conference Call and Webcast Details:
Conference Call: U.S. 800-274-0251; International: 719-325-2284; Passcode: 2866769
Replay through Aug. 29: U.S.: 877-870-5176; International: 858-384-5517; Replay PIN: 2866769; Click here for: Live Webcast and Replay
About MelaFind www.melafind.com
MelaFind® is the first and only medical device with FDA Pre-Market Approval (PMA) for the U.S. and CE Marking certification for the European Uniondesigned to assist dermatologists in the evaluation and diagnosis of melanoma at its most curable and cost-effective stage. The MelaFind®system utilizes innovative software driven technology and state-of-the-art 3-D optical imaging to non-invasively extract data 2.5 mm below the skin surface from patient's pigmented ambiguous moles and objectively analyzes them with proprietary algorithms. MelaFind provides important additional perspective to physicians to help them better understand the structural disorganization of a patient's pigmented ambiguous moles (before cutting the skin) for a more accurate biopsy management decision.
About MELA Sciences, Inc. www.melasciences.com
MELA Sciences is a medical technology company dedicated to designing and developing innovative software-driven technology for the clinical early detection and prevention of skin cancer. MELA Sciences conducted the largest, positive prospective study ever done on the melanoma disease, and is the first and only medical technology company to receive both FDA Pre-Market Approval (PMA) for the U.S. and CE Marking certification for theEuropean Union for a device of this nature.
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