DermTech (DMTK +0.00%) stock skyrocketed earlier this year. Now, though, its shares are more than 50% below the previous highs. In this Motley Fool Live video recorded on Sept. 1, Motley Fool contributors Keith Speights and Brian Orelli address a viewer's question about whether there's reason to be concerned about DermTech.
Keith Speights: Very quickly, Brian, let's hit one question before we end our segment. The question that's getting the most upvotes is from Dorian. Any cause for concern with DermTech, the ticker there is DMTK. Just really quickly. Do you know any reason for concern with this stock?
Brian Orelli: No. I think you've got to be in it for the long term. Let's quickly go back. DermTech has a melanoma test that they're changing the way doctors normally do tests for melanoma.
Normally doctors take a biopsy and now what they're doing is they're trying to put something before a biopsy, it's basically a piece of tape and it rips off some cells off the lesion that the doctor thinks might be melanoma. Then they send it to a lab and they do genetic testing on those cells and they can determine fairly accurately whether that melanoma is likely cancerous. Then you would avoid having to do a biopsy on all of the suspect lesions and you would only do a biopsy on ones that tested positive by the DermTech's test.
So basically you got to change doctors' habits. I think that can be very difficult. I think DermTech is finding that that's quite difficult. They need to get more and more doctors to use it. They need to get more and more coverage by insurance companies. As they do that, it'll grow in popularity by the doctors. So then they'll be able to ramp up -- there'll be hockey stick of ramping up sales and so, I think that you have to wait for that hockey stick to actually happen.
