Verisante Technology Inc. V.VRS

Brian Marckx Analyst from Zacks

[electricsockets]

https://seekingalpha.com/article/1482551-competitive-advantages-huge-skin-cancer-market-bode-well-for-aura?source=tracking_email_activity_alerts&ifp=0&v=1371555900

.

The above article was a great read - but I enjoyed checking back and reading the Q&A's in the comment section of the article - have a look:

• Fantastic article. I am more interested in the macro regarding the particular segment, but the company you mentioned has piqued my curiosity. Will research further. Tell me, how much does the machine cost? Are there consumables? 10k a pop for machine? Important from a clinics business cost benefit analysis

  6 Jun, 09:07 AMReply! Report AbuseLike0
• 

  Brian MarckxComments (49)
  gtcoogee,
  
  Pricing is still kind of a work in process and will likely be at least somewhat determined by what the market will bear as well as how much the device will cost to make - with some manuf volume. Right now, the guess is somewhere between $35k - $60k but also possible to have a lease option. There is a consumable - disposable, one-time use end cap - that right now is expected to sell for $10 and where most of the margin will be.

  6 Jun, 09:17 AMReply! Report Abuse1
• 

  Paul NouriComments (243)
  Brian,
  
  Do you think dermatologists are comfortable with the lower level of specificity vs. a biopsy? Is this a case of something that the derms will get used to over a time and understand that it is a front line diagnosis?
  
  What is the company's capital raising strategy? They are burning over $1m quarter and have about that left in the bank (maybe a tad more counting the recent capital raise).
  
  Do you think MELA's "failed" attempt in the market so far is a result of an inferior product or a market that may not be as large as these guys hope it is?
  
  How far off is the company to commercializing its lung cancer opportunity?
  
  Sorry for all of the questions, but hopefully you have some insight into the answers.
  
  Thanks!

  18 Jun, 10:01 AMReply! Report AbuseLike0
• 

  Brian MarckxComments (49)
  Paul,
  
  This will be used as an adjunct or in place of "ABCD" but it's not competing with biopsy - biopsy will be the definitive diagnosis for the foreseeable future. So, yes, it's a matter of how comfortable doctors will be with using it at the initial diagnosis. If it's better than "ABCD", which it looks like it may be, then it makes sense that it has clinical utility.
  
  Re: capital raising, they had previously announced plans to raise up to $10 million via stock and warrants. They've only raised a small portion of that so far but I think it's safe to assume the company is looking for the best terms possible and expects to close on a stock sale in the near future.
  
  Re: MELA - I don't think the slow start has to do with a lack of a sizeable market. There's a few hurdles/questions though: derms being comfortable with using something novel, lack of reimbursement, whether the economics work for a particular derm practice, and does Melafind actually improve diagnosis. Time will likely provide some answers to these.
  
  Re: lung cancer application -timing is a big unknown right now. VRS is focused on skin right now but has had the benefit of outside funding for the lung cancers studies. It's possible larger studies will be initiated in the near future to support an eventual commercialization for lung.

  18 Jun, 10:38 AMReply! Report AbuseLike0
• 

  Paul NouriComments (243)
  Thanks,
  
  The idea of this product seems like a no brainer. It should be easier to charge patients off-insurance for something done at a derm practice. MELA may have done Verisante a favor by spending tens of millions of dollars creating awareness. Did you mention in the article that they won't be in the U.S. until 2015-2016?

  18 Jun, 10:56 AMReply! Report AbuseLike0
• 

  DScherComments (66)
  Paul, it is definitely worth noting the scan time difference between Melafind and Aura. Minutes compared to seconds; also Aura uses one replaceable tip to scan an entire body whereas Melafind tips are one-use if I understand correctly. If someone goes into a Derm's office and has 10 lesions to be scanned, that's at least 20 minutes with the dermatologist. With Aura it could be less than a minute and the dermatologist doesn't even have to be the one to do the scans.
  
  From what I've understood from Melafind investors, they defend this difference by stating that Melafind is really geared towards better understanding advanced cases where there needs to be a better understanding of the lesion, not a preliminary diagnosis such as Aura offers.

  18 Jun, 11:14 AMReply