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Mela Sciences (MELA) Announces Second Quarter 2012 Financial Results


8/8/2012 9:52:21 AM

IRVINGTON, NY--(Marketwire - August 07, 2012) - MELA Sciences, Inc. (NASDAQ: MELA), the medical device company that has developed and is commercializing MelaFind®, today announced financial results for the second quarter ended June 30, 2012.

Second Quarter 2012 Performance Highlights:

  • Continued its controlled and deliberate launch of MelaFind in the US and in several key cities throughout Germany.
    • The Company ended the second quarter with 25 MelaFind systems in the field in the US and Germany and continues to work with customers to train and assist them in using MelaFind appropriately to incorporate its use successfully into their practices.

  • Published positive and highly statistically significant clinical results of the impact of MelaFind in a German clinical study.
    • The study demonstrated that dermatologists, who incorporated MelaFind into their biopsy decision-making process for the detection of melanoma at its earliest, most curable stages, outperformed those who did not have the MelaFind information.
    • The study was conducted in collaboration with the German Cooperative Oncology Group (DeCOG) and German Skin Cancer Society. It included over two hundred dermatologists.

  • Added resources to support the expanding and accelerating commercial launch and demand for the MelaFind system.
    • Continued to build sales, field service, and medical affairs capabilities, including the addition of four sales people, a technical support engineer and an Assistant Medical Affairs Director in the quarter.
    • Ramped up contract manufacturing by expanding the utilization of existing capabilities and adding a new manufacturing bay to further increase capacity.

"We continued our controlled launch of MelaFind in the US and Germany in the second quarter and are thrilled with the level of demand we are experiencing and broad based clinician acceptance," said Dr. Joseph V. Gulfo, President and CEO of MELA Sciences. "While we are still in the initial phase of our controlled and deliberate launch, MelaFind has been put into the offices of over 25 dermatologists in the US and Germany. We are working alongside our initial dermatologist customers to help them incorporate MelaFind into their practices, which we believe will, in turn, facilitate wider penetration. We are finalizing various programs and tactics designed to encourage increased utilization of installed systems, and we look forward to rolling-out these initiatives in the coming months."

"We were pleased with the results of the German study, the largest study of its kind, which were consistent with studies performed with dermatologists in the US. The clinical data were recently presented by the principal investigator, Dr. Axel Hauschild, Professor of Dermatology from the University Hospital (UKSH) of Kiel, Germany, at the 23rd Practical Dermatology & Venereology Conference (FoBi) in Munich in July," Dr. Gulfo continued.

"Based on the favorable customer experiences and in concert with our plans, we will now accelerate the pace at which we will be placing MelaFind systems in dermatologists' offices. We look forward to the Summer American Academy of Dermatology meeting next week and the American Society of Dermatologic Surgery meeting in October to engage customers and drive sales. We believe we are on track to achieve our stated goal of placing 200 systems in the US and 75 in Germany by the end of 1Q 2013," Dr. Gulfo concluded.

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.

Second Quarter 2012 Financial Results
Revenues for the three months ended June 30, 2012 were $75,757 compared to no revenues reported for the same period in 2011 and up from revenues of $11,250 reported in 1Q 2012. Deferred revenues for the second quarter were $70,724 versus no deferred revenue for 2Q 2011 and up from $17,250 of deferred revenue in 1Q 2012. Deferred revenues reflect the timed recognition of the installation fee revenue over the term of the user agreement, or two years.

The Company's net loss for the three months ended June 30, 2012 was $5.5 million, or $0.18 per diluted share, compared to a net loss of $4.8 million, or $0.19 per diluted share, for the same period in 2011. The increase in the net loss was primarily attributable to an increase in General and Administrative expenses related to the expansion of the Company's salesforce and the Company's incremental marketing costs as well as the increase in direct costs associated with the placement of MelaFind systems in dermatologists' offices.

As of June 30, 2012, the Company's cash and cash equivalents were $17.2 million.

Conference Call
MELA Sciences will host a conference call today at 4:30 PM EST to discuss second quarter 2012 quarterly results. To participate in the call, dial 1-888-240-9345 approximately 10 minutes before the conference call is scheduled to begin. To listen via live webcast, please go to the investor relations section of the MELA Sciences website at http://www.melasciences.com approximately 10 minutes prior to the teleconference start time. If you are unable to participate during the live conference call and webcast, the conference call audio cast will be archived and available for replay for approximately 90 days.

About MELA Sciences, Inc.
MELA Sciences 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.

For more information on MELA Sciences, visit www.melasciences.com.

Safe Harbor
This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to our plans, objectives, expectations and intentions and other statements that contain words such as "expects," "contemplates," "anticipates," "plans," "intends," "believes," "assumes," "predicts" and variations of such words or similar expressions that predict or indicate future events or trends, or that do not relate to historical matters. These statements are based on our current beliefs or expectations and are inherently subject to significant known and unknown uncertainties and changes in circumstances, many of which are beyond our control. There can be no assurance that our beliefs or expectations will be achieved. Actual results may differ materially from our beliefs or expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the company and the medical device industry in general, as well as more specific risks and uncertainties facing the company such as those set forth in its reports on Forms 10-Q and 10-K filed with the US Securities and Exchange Commission (the "SEC"). Factors that might cause such a difference include whether MelaFind® achieves market acceptance. Given the uncertainties affecting companies in the medical device industry such as the Company, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. The Company urges you to carefully review and consider the disclosures found in its filings with the SEC which are available at www.sec.gov and www.melasciences.com.

                                                                            
                                                                            
                             MELA SCIENCES, INC.                            
                          CONDENSED BALANCE SHEETS                          
                                                                            
                                                June 30,       December 31, 
                                                  2012             2011     
                                             --------------  ---------------
                                               (unaudited)          *       
                   ASSETS                                                   
Current Assets:                                                             
Cash and cash equivalents                    $   17,211,098  $    27,996,871
Accounts receivable                                  68,360                -
Inventory                                           473,454                -
Prepaid expenses and other current assets           664,463        1,061,550
                                             --------------  ---------------
                                                                            
Total Current Assets                             18,417,375       29,058,421
Property and equipment, net                       3,214,932        1,626,791
Patents and trademarks, net                          53,258           59,208
Deferred financing costs                                  -           62,391
Deferred public offering cost                       144,199                -
Other assets                                         71,235          586,498
                                             --------------  ---------------
Total Assets                                 $   21,900,999  $    31,393,309
                                             --------------  ---------------
                                                                            
                                                                            
    LIABILITIES AND STOCKHOLDERS' EQUITY                                    
Current Liabilities:                                                        
Accounts payable (includes related parties                                  
 of $50,000 and $36,027- as of June 30, 2012                                
 and December 31, 2011, respectively)        $    1,328,742  $       670,950
Accrued expenses                                    976,775          745,754
Deferred revenue (ST)                                47,334                -
Other current liabilities                            43,270           30,993
                                             --------------  ---------------
Total Current Liabilities                         2,396,121        1,447,697
                                             --------------  ---------------
                                                                            
Long Term Liabilities:                                                      
Deferred rent                                       140,994          138,216
Deferred revenue (LT)                                40,640                -
                                             --------------  ---------------
Total Long Term Liabilities                         181,634          138,216
                                             --------------  ---------------
Total Liabilities                                 2,577,755        1,585,913
                                             --------------  ---------------
 COMMITMENTS, CONTINGENCIES and LITIGATION                                  
 (Note 8)                                                                   
                                                                            
Stockholders' Equity                                                        
Preferred stock - $.10 par value; authorized                                
 10,000,000 shares; issued and outstanding:                                 
 none                                                                       
Common stock - $.001 par value; authorized                                  
 45,000,000 shares; issued and outstanding                                  
 30,332,217 shares at June 30, 2012 and                                     
 30,307,538 at December 31, 2011                     30,332           30,308
Additional paid-in capital                      150,057,460      149,304,424
Accumulated deficit                            (130,764,548)   (119,527,336)
                                             --------------  ---------------
Stockholders' Equity                             19,323,244       29,807,396
                                             --------------  ---------------
Total Liabilities and Stockholders' Equity   $   21,900,999  $    31,393,309
                                             --------------  ---------------
                                                                            
* Derived from the audited balance sheet as of December 31, 2011            
                                                                            
                                                                            
                                                                            
                                                                            
                            MELA SCIENCES, INC.                             
                     CONDENSED STATEMENTS OF OPERATIONS                     
                                (unaudited)                                 
                                                                            
                        Three months ended June                             
                                  30,             Six months ended June 30, 
                       ------------------------  -------------------------- 
                           2012         2011         2012          2011     
                       -----------  -----------  ------------  ------------ 
                                                                            
Revenue                $    75,757  $         -  $     87,007  $          - 
Cost of revenue            372,048            -       502,458             - 
                       -----------  -----------  ------------  ------------ 
                                                                            
Gross profit              (296,291)           -      (415,451)            - 
                                                                            
Operating expenses:                                                         
Research and                                                                
 development             1,673,338    2,620,554     4,108,096     5,196,682 
General and                                                                 
 administrative          3,528,575    2,208,059     6,746,066     4,601,179 
Operating loss          (5,498,204)  (4,828,613)  (11,269,613)   (9,797,861)
                                                                            
Interest income              9,021       13,934        22,405        34,465 
                                                                            
Other income                 4,996        5,022         9,996        11,670 
                                                                            
                       -----------  -----------  ------------  ------------ 
                                                                            
Net loss:              $(5,484,187) $(4,809,657) $(11,237,212) $ (9,751,726)
                                                                            
                       -----------  -----------  ------------  ------------ 
                                                                            
Basic and diluted net                                                       
 loss per common share $     (0.18) $     (0.19) $      (0.37) $      (0.39)
                       ===========  ===========  ============  ============ 
                                                                            
                                                                            
Basic and diluted                                                           
 weighted average                                                           
 number of common                                                           
 shares outstanding     30,332,217   25,262,538    30,323,061    25,262,538 
                       ===========  ===========  ============  ============ 
                                                                            
                                                                            



                             MELA SCIENCES, INC.                            
                     CONDENSED STATEMENTS OF CASH FLOWS                     
                                 (unaudited)                                
                                                                            
                                                                            
                                               Six Months Ended June 30,    
                                             -----------------------------  
                                                  2012            2011      
                                             --------------  -------------  
Cash flows from operating activities:                                       
  Net loss                                   $  (11,237,212) $  (9,751,726) 
  Adjustments to reconcile net loss to net                                  
   cash used in operating activities:                                       
    Depreciation and amortization                   330,395        283,785  
    Noncash compensation                            774,493        734,222  
    Write off of unamortized financing costs         62,391              -  
    Changes in operating assets and                                         
     liabilities:                                                           
      Increase in accounts receivable               (68,360)             -  
      Increase in inventory                        (383,181)             -  
      Decrease (increase) in prepaid                                        
       expenses and other current assets            306,814       (410,357) 
      Increase (decrease) in accounts                                       
       payable and accrued expenses                 888,813       (419,525) 
      Increase in deferred rent                       2,778         16,956  
      Increase in other assets                       (6,751)             -  
      Increase in deferred revenue                   87,974              -  
      Increase (decrease) in other current                                  
       liabilities                                   12,277           (647) 
                                             --------------  -------------  
                                                                            
        Net cash used in operating                                          
         activities                              (9,229,569)    (9,547,292) 
                                             --------------  -------------  
                                                                            
Cash flows from investing activities:                                       
  Purchases of property and equipment            (1,390,572)       (30,811) 
                                             --------------  -------------  
                                                                            
        Net cash used in investing                                          
         activities                              (1,390,572)       (30,811) 
                                             --------------  -------------  
                                                                            
Cash flows from financing activities:                                       
  Proceeds from exercise of stock options            33,310              -  
  Expenses related to Public Offerings             (198,942)             -  
                                             --------------  -------------  
                                                                            
        Net cash used in financing                                          
         activities                                (165,632)             -  
                                             --------------  -------------  
                                                                            
Net decrease in cash and cash equivalents       (10,785,773)    (9,578,103) 
Cash and cash equivalents at beginning of                                   
 period                                          27,996,871     30,520,812  
                                             --------------  -------------  
                                                                            
Cash and cash equivalents at end of period   $   17,211,098  $  20,942,709  
                                             --------------  -------------  
                                                                            
Supplemental disclosure of cash flow                                        
 information:                                                               
Non-cash investing activity:                                                
Re-classification of MelaFind® components                                   
 from other assets to property and equipment $      522,014  $           -  

For further information contact:

For Investors
Lynn Pieper
Westwicke Partners
415-202-5678

For Media
Melissa Hurley
Post+Beam
646-442-2773


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