MELA Sciences Announces First Quarter 2012 Financial Results

MAY 3, 2012 - 16:05 ET
FOR: MELA SCIENCES, INC.

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IRVINGTON, NY--(Marketwire - May 3, 2012) - MELA Sciences, Inc. (NASDAQ: MELA), the medical device company that has developed MelaFind^®, today announced financial results for the first quarter ended March 31, 2012. 

First Quarter 2012 Performance Highlights:

• Commenced commercialization of MelaFind as part of a controlled and deliberate launch in the US, focusing on the Northeast, and in several key cities throughout Germany.
  
  
  • The Company is working with customers to train and assist them in using MelaFind appropriately and to incorporate its use successfully into their practices.
    
    
  • MELA Sciences presented MelaFind at the American Academy of Dermatology (AAD) Annual Meeting in San Diego which was held in late March. The Company collected over 200 leads, and reception from dermatologists has been encouraging.
    
    
• Entered into a three-year expanded manufacturing agreement with its long-term supplier, Askion GmbH for the production of the MelaFind hand-held device.
  
  
  • Askion has built systems to support the initial launch of MelaFind and is currently building inventory for the early commercialization effort, ensuring a secure supply of MelaFind hand-held devices for the next three years.
    
    
• Entered into a two-year agreement with Quintiles (Quintiles Commercial Germany GmbH) for commercialization support for MelaFind in Germany. 
  
  
  • Quintiles is providing customer service, sales, marketing and management support to supplement the commercialization and launch of MelaFind in Germany.

"We are pleased to report the significant achievements we have reached in the first quarter of 2012, most notably our commercial launch of MelaFind into the US and Germany," said Dr. Joseph V. Gulfo, President and CEO of MELA Sciences. "While we are in the initial phase of our controlled and deliberate launch, MelaFind has been put into the offices of a handful of dermatologists in the US and Germany. Early experiences indicate great interest in MelaFind as we work with these dermatologists to help them incorporate it into their practices, which will, in turn, facilitate wider penetration."

"We look forward to participating in the NASDAQ Opening Bell ceremonies on Melanoma Monday (May 7, 2012), during which we will do our part to communicate the need for detecting melanoma at its earliest and most curable stages," Dr. Gulfo continued.

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.

First Quarter 2012 Financial Results
Revenues for the three months ended March 31, 2012 were $11,250 compared to no revenues reported for the same period in 2011. 

The Company's net loss for the three months ended March 31, 2012 was $5.8 million, or $0.19 per diluted share, compared to a net loss of $4.9 million, or $0.20 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 incremental marketing costs as well as the expansion of the Company's sales force and the re-allocation of certain expenses from Research & Development to General and Administrative to properly reflect commercial operations.

As of March 31, 2012, the Company's cash and cash equivalents were $22.3 million.

Conference Call
MELA Sciences will host a conference call today at 4:30 PM ET to discuss first quarter 2012 quarterly results. To participate in the call, dial 1-888-437-9481 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 U.S. 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
			March 31,				December 31,
			2012				2011
			(unaudited)				*
ASSETS
Current Assets:
Cash and cash equivalents			$	22,301,266			$	27,996,871
Accounts receivable				12,078
Inventory				400,363
Prepaid expenses and other current assets				816,206				1,061,550
Total Current Assets				23,529,913				29,058,421
Property and equipment, net				2,411,815				1,626,791
Patents and trademarks, net				56,233				59,208
Deferred financing costs				62,391				62,391
Other assets				64,484				586,498
Total Assets			$	26,124,836			$	31,393,309
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable			$	940,117			$	670,950
Accrued expenses				551,978				745,754
Deferred placement revenue				17,250
Other current liabilities				44,880				30,993
Total Current Liabilities				1,554,225				1,447,697
Long Term Liabilities:
Deferred rent				139,605				138,216
Total Long Term Liabilities				139,605				138,216
Total Liabilities				1,693,830				1,585,913
COMMITMENTS, CONTINGENCIES and LITIGATION
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 March 31, 2012 and 30,307,538 at December 31, 2011				30,332				30,308
Additional paid-in capital				149,681,035				149,304,424
Accumulated deficit				(125,280,361	)			(119,527,336	)
Stockholders' Equity				24,431,006				29,807,396
Total Liabilities and Stockholders' Equity			$	26,124,836			$	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 March 31,
		2012				2011
Revenue		$	11,250
Cost of revenue			130,410
Gross profit			(119,160	)
Operating expenses:
Research and development		$	2,434,758			$	2,576,128
General and administrative			3,217,491				2,393,120
Operating loss			(5,771,409	)			(4,969,248	)
Interest income			13,384				20,531
Other income, net			5,000				6,648
Net loss		$	(5,753,025	)		$	(4,942,069	)
Basic and diluted net loss per common share		$	(0.19	)		$	(0.20	)
Basic and diluted weighted average number of common shares outstanding			30,313,905				25,262,538

MELA SCIENCES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
						Three Months Ended March 31,
						2012				2011
Cash flows from operating activities:
	Net loss					$	(5,753,025	)		$	(4,942,069	)
	Adjustments to reconcile net loss to net cash used in operating activities:
		Depreciation and amortization					148,044				147,086
		Noncash compensation					347,618				170,646
		Changes in operating assets and liabilities:
			Increase in accounts receivable				(12,078	)			-
			Increase in inventory				(310,090	)			-
			Decrease in prepaid expenses and other current assets				155,071				156,014
			Increase (decrease) in accounts payable and accrued expenses				75,391				(19,243	)
			Increase in deferred rent				1,389				8,478
			Increase in deferred placement revenue				17,250				-
			Increase in other current liabilities				13,887				7,093
				Net cash used in operating activities			(5,316,543	)			(4,471,995	)
Cash flows from investing activities:
	Purchases of property and equipment						(408,079	)			(7,645	)
				Net cash used in investing activities			(408,079	)			(7,645	)
Cash flows from financing activities:
	Proceeds from exercise of stock options						33,310				-
	Expenses related to 2011 Public Offering						(4,293	)			-
				Net cash provided by financing activities			29,017				-
Net decrease in cash and cash equivalents							(5,695,605	)			(4,479,640	)
Cash and cash equivalents at beginning of period							27,996,871				30,520,812
Cash and cash equivalents at end of period						$	22,301,266			$	26,041,172
Supplemental disclosure of cash flow information:
Non-cash investing activity:
Reclassification 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
Ricochet Public Relations
212-679-3300 x128