UPDATE: H.C. Wainwright & Co. Initiates Coverage On MELA Sciences On Commercialization Strategy Change

In a report published Monday, H.C. Wainwright & Co. analyst Swayampakula Ramakanth initiated coverage on MELA Sciences (NASDAQ: MELA) with a Buy rating and $4.50 price target.

In the report, H.C. Wainwright & Co. noted, “MELA Sciences has developed a multi-spectral scanning device, MelaFind, that can help the dermatologist to decide if a biopsy is required for diagnosing an atypical mole as a melanoma. MelaFind entered the US market upon FDA approval in 2011. However, the initial launch strategy was unsuccessful resulting in unprofitable operations.

"In late 2013, current management was brought on board to execute new commercialization strategies which are currently underway. An application has been filed with the American Medical Association to obtain a Current Procedural Terminology (CPT) code for reimbursement, and a decision is expected in 4Q15. In the meantime, management is raising awareness of MelaFind through by engaging with key opinion leaders and publications. Management has also initiated the new commercialization strategy to either lease or sell MelaFind to dermatologists and key institutions that treat high-risk melanoma patients.

"Though the company seems to be in a ‘show-me' situation, considering the current management's previous successful commercial experience and their commitment to the new strategy, MelaFind's commercial potential, and improving operational efficiency, we believe MELA shares are currently undervalued.”

MELA Sciences closed on Friday at $2.30.