With the sequencing of the human genome, personalized genomic medicine is within the reach of every patient today. Cancer detection by molecular diagnostic markers is critical for determining disease progression and treatment. Melanoma Diagnostics has developed novel molecular markers and antibodies for detecting and determining appropriate therapy for melanoma. The pathologic diagnosis of melanoma is an unmet medical need because it is one of the most daunting tasks in pathology. While numerous histopathological features have been described for malignant melanoma, the diagnosis of melanoma remains problematic, as the relative weight assigned to these criteria is uncertain and differs between different pathologists. The misdiagnosis of melanoma is a major cause of inappropriate therapy as well as malpractice claims involving pathologists and dermatologists in the United States, second only to the diagnosis of breast cancer. Melanoma is one of the deadliest cancers, with the fastest raising incidence in the United States.

This is a molecular diagnostics company whose proprietary, patent-pending technology is unique for evaluating malignant melanoma. This novel technology, licensed from UCSF, includes a number of highly validated markers with utility in the diagnostic and prognostic assessment of melanoma patients. An additional value of this technology is a better assessment of the role of adjuvant treatments (such as chemotherapy or interferon therapy) in patients with melanoma.

The standard immunohistochemical assays and reagents routinely used by pathologists and clinical pathology laboratories are inadequate. The novel biomarkers developed by Melanoma Diagnostics were derived from recent genomic analyses of moles, primary and metastatic melanomas. Specifically, Melanoma Diagnostics has developed proprietary diagnostic markers and antibody kits whose expression can accurately distinguish between benign moles and malignant melanomas. Additional confirmation of the utility of these markers is ongoing in several top laboratories in the US and Europe. The patent portfolio consists of filed patent applications covering both the diagnostic and prognostic markers worldwide.

At present, no molecular markers are routinely used in the diagnostic or prognostic assessment of melanoma patients. The currently available immunohistochemical assays distinguish melanoma from other cancers but do not distinguish between a benign mole and a malignant melanoma. In addition, these markers do not predict melanoma prognosis. The clinical behavior of a melanoma (once diagnosed) is unpredictable, as patients with thin tumors can die while those with thicker tumors survive. Thus markers (such as those developed by Melanoma Diagnostics) that improve upon routine histological diagnostic and prognostic factors are urgently needed.

Currently in the US, there are 2.5-3 million moles biopsied every year, with an estimated equal number in the rest of the world. In addition, 100,000 individuals are diagnosed with melanoma in the US each year. Despite the lack of accurate diagnostic or prognostic markers, only 225,000 assays are conducted on this population each year in the US. It is our intent to target all tumors biopsied for a potential diagnosis of melanoma. In addition, we would target all diagnosed melanomas with a prognostic evaluation. This yields a potential target population of 5-6 million moles annually and over 132,000 melanomas annually worldwide.

Our accurate diagnostic markers (greater than 90% accuracy) can discriminate between normal tissue and malignant tissue and will give us significant opportunity to penetrate the target market quickly and achieve dominant market share.

The assay kits will have a high margin and are expected to capture a significant share of the target market within the first two years. We expect to sell over $150 million (~10% market penetration) annually in the US alone, and over $300 million worldwide.