If you accept the premise that where there is smoke there is fire, you'll want to check out ChromaVision Medical Systems (NASDAQ:CVSN) -- because it's smokin'. The stock was up more than 200% to nearly $4 this morning.

Fueling ChromaVision is news of an FDA approval of the company's Automated Cellular Imaging System (ACIS) for use in treating breast cancer, previously performed by manual microscopy. A higher degree of accuracy relative to conventional methods allows doctors to focus on individual treatment and to better predict patient outcomes.

Yet, for all the excitement, ChromaVision remains a tiny operation. Revenues last quarter were just $3.1 million, and as with most startups, cash burn consumed all that and more, producing a net loss of $2.2 million. With 37.5 million shares outstanding, the market capitalization swelled this morning to nearly $150 million.

Clearly, this is a very speculative bet. The company has no debt and a soon-to-be-vaporized $2.3 million in cash; so, if nothing else, the ACIS approval leaves the company much better positioned to raise capital going forward -- without diluting current stockholders. Who, by the way, must be a happy group, indeed.