Electro-Optical Sciences: A Speculative Stock with Great Potential

My stock suggestion today is in the spirit of adventure. It’s a medical technology company that doesn’t really have revenues, much less earnings, and it doesn’t have a product approved for sale. What it has is a great idea for a hand-held device that will enable dermatologists to scan skin lesions to determine whether they are melanomas.

The company is Electro-Optical Sciences (MELA), and the device-called the MelaFind-uses light at various wave-lengths to scan the suspicious lesion. It then uses its database of melanoma images to calculate a diagnosis.

With a huge age cohort of sun-worshiping Baby Boomers now approaching the danger years, the diagnosis of melanoma, the leading cause of death from skin cancer, is a big deal. The MelaFind is non-invasive, quick, and reportedly has a 95% accuracy rate.

Electro-Optical has submitted a Pre-Market Approval form to the FDA for MelaFind. The FDA has put the decision on a fast track, and the estimated decision date is some time this December.

This is a low-priced, speculative stock, but the potential payoff is huge. If you’re the kind of investor who likes to spin the roulette wheel every once in a while, this may be for you.

Comments

[Goodguy:]

I couldn't agree more. Check their web site for more information on how effective the MelaFind device is.


Disclosure: Long MELA

Jul 08 05:05 PM

[drd:]

good idea but how will they make money? will they just sell machines (how many will be sold ?) will they charge per test

Jul 09 12:39 PM

[PalinTologist:]

It's my understanding that they charge for the device itself (relatively inexpensive at 5 grand) and then the recording 'card' which is used on each patient and stores the data of each test which costs the patient around $100 per test, of which MELA keeps $40 and the physician keeps $60 (above figures are not exact and only meant to convey the general idea, relative to the question asked).

Benefit to the patient is that it is fast and non invasive.

For the busy physician, it allows better customer service to their patients who face potential cancer diagnosis and are anxious to find out results. As well, it provides better patient flow, i.e. more clients=more money as it frees up the physician's time that they would otherwise use to do unnecessary, expensive, invasive and time intensive biopsies.

I am Long MELA; >1000 shares.

On Jul 09 12:39 PM drd wrote:

> good idea but how will they make money? will they just sell machines
> (how many will be sold ?) will they charge per test

Jul 09 02:23 PM

[spatty:]

extraordinary opportunity could be the state of medicine for melanoma

Jul 14 05:48 PM

[spatty:]

Extraordinary opportunity, could be the state of medicine for melanoma

Jul 14 05:49 PM

[iliasa:]

they don't charge for the device. the device costs $25K and remains the property of EOS. they are thinking about charging $5K for the installation and maintenance. they will make their money from the memory cards where the images are stored and share the revenues from the cards with the physician. it's a great product and a very good commercialisation approach that benefits all stakeholders. approval is almost certain. my only concern is on the valuation. based on my assumptions for penetration and utilisation with an expected IRR of 25% this stock is worth $6-15. but it's worth a bet, especially as it is an attractive acquisition target. i don't have any positions on them but I am following closely.


On Jul 09 02:23 PM PalinTologist wrote:

> It's my understanding that they charge for the device itself (relatively
> inexpensive at 5 grand) and then the recording 'card' which is used
> on each patient and stores the data of each test which costs the
> patient around $100 per test, of which MELA keeps $40 and the physician
> keeps $60 (above figures are not exact and only meant to convey the
> general idea, relative to the question asked).
>
> Benefit to the patient is that it is fast and non invasive.
>
> For the busy physician, it allows better customer service to their
> patients who face potential cancer diagnosis and are anxious to find
> out results. As well, it provides better patient flow, i.e. more
> clients=more money as it frees up the physician's time that they
> would otherwise use to do unnecessary, expensive, invasive and time
> intensive biopsies.
>
> I am Long MELA; >1000 shares.
>
> On Jul 09 12:39 PM drd wrote:

Jul 30 10:07 AM