DermTech, Inc. [DMTK]

DermTech seemed like a great idea when it went public. A non invasive way to detect melanoma and skin cancer

While I lost money on the stock I more than made up for it with covered calls. By October it looked hopeless so I exited the position at $30.72.

I still very much like the technology and now it can be had for a fraction of the price. I’m thinking of adding DMTK to my portfolio’s covered call income section.

Yahoo has a bunch of news about DermTech here

The Captain


so just because its cheap(er) its now a buy?
Maybe its just short covering because of one news in last days…
The cash burn is sky high, there will be dilution on single digits or low double digit levels. There managment is weak. This stock was one of FinTech (Pump and Dump) community darlings.



  1. First off, they are running out of cash, so they will need to raise money. Soon and repeatedly. That’s usually called dilution (when you can get the money), or bankruptcy (when you can’t get the money).
  2. They don’t appear to be conserving cash. Their office is in a prime, very expensive location. Torrey Pines is super expensive.
  3. And all the execs are collecting their salaries, of course, and not relying mostly on stock options (relying mostly on stock options is usually the sign of “true believers”).
  4. Their website has a major inaccuracy. Taking a skin sample for biopsy is hardy “invasive”, I’ve had it done many times, and it’s less invasive that a scrape or a bruise. They cover it with a bandaid, you discard it a day later, and it’s over.

I’m not saying that it isn’t a good idea. It is a good idea. And there is indeed a wide market for it. But I’m not sure dermatologists will take to it, they get paid a much higher reimbursement for cutting, and then the lab gets paid for the sample analysis, than they get for simply having the patient place a sticker over the affected area.



The Captain 12345

  1. And all the execs are collecting their salaries, of course, and not relying mostly on stock options (relying mostly on stock options is usually the sign of “true believers”).

Interesting contrast! :imp:

The Captain

Ever hear of the law of gravity? You can’t escape it. Well, the same thing applies to self interest. You can’t escape it.

Which does not remove the irony. It’s OK for doctors but not for executives because they are the evil JC class.

The Captain

1 Like

It’s not “ok” or “not ok”, it just “is”.

I wasn’t implying not okay in 3 above, I was just figuring out the level of “true believer”-ness there. That’s one of the inputs into the decision to invest or not.

OK! :wink:

The Captain’s
reply was one character short of the permissible post length but with this added clarification the meaning of OK is certainly more OK than without it.


I am glad of this post however. I gonna bring up this company and the technology at my dermatologist appointment next month. I can already visualize my doctor frowning, stick out his lower lip and shaking his head no. I’m just wonder what he will said about this “unproven” technology.
I spent the first 6 months of last year getting sliced & diced upon last year. This year I will get some entertainment from my appointment. LOL


I’m glad to hear the thread is useful beyond investing!

The Captain


Yea tbf i never understood why they targeted dermatologists in the first place. This should be at primary care offices and places that they dont normally offer biopsies… cvs or walgreens included… if you can send a stool sample in, from home, to screen for cancer and avoid an “invasive” colonoscopy, you should be able to do this from home as well.

Management overall just has no clue. Dermatogists 100% lose money on this. But the wait to see a dermatologist is over 3 months in most places in the US. Theres a huge need for this literally anywhere but dermatology offices.

Sigh. So much promise wasted. Anyhow, im sure itll get bought out for pennies by p&g or some massive biomed/pharma and be hugely successful. Its already recommended and approved by all the derm societies.


You can Cologuard.

My primary doc tried to push me into a colonoscopy. I said nope no family history. I knew both siblings had had the procedure done twice each with no detected cancer. I did the Cologuard test with no negative results.
I later emailed them to determine how many suspicious polyps they had removed. The answer-zero.
I would think the Cologuard test be the first step at detecting colon cancer. But then the doctor won’t get the thousand bucks for doing the colonoscopy procedure.

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Your PCP or Pharmacy should never be the first to tell you about your melanoma. This is a serious diagnosis. There are major treatment options that need discussing in private. This has nothing to do with nonspecialist or a guy at Walgreens saying a word to you like, “hey not so good. I am surprised. Have you made out your will? This could be serious. Perhaps you need to see my nurse in the back. Or I donno see a dermatologist”. That conversation should never be happening.

As a physician and a general surgeon who has treated all stages of melanoma i strongly disagree.

Access to care is the number one problem with healthcare in the community and gatekeeping is not the answer. Melonoma is largely treatable unless its a later stage. Time to diagnosis is very important.

Also the point of the test is to determine if you need a biopsy or not. So instead of EVERYONE with a lesion waiting for limited dermatogist only those with positive lesions or high risk lesions get referred, reducing wait times and improving access for all.

And yes i was referring to cologaurd. If ppl can mail in stool samples they can mail in dmtk patches. I dont see why not. Either way with a positive result you now know you need to urgently see a specialist.


Most of the time, your primary care physician (PCP) is the first to tell you about almost everything, and sometimes recommends seeing a specialist.

Thanks all! I certainly learned a lot about DermTech from this tread.

The Captain

Hey Denny,

Going forward, has this information made any difference to your investing thesis in DMTK, either for options or as part of your portfolio?


Yes, I still like the technology but the investing thesis, long and calls, is on hold.

The Captain

I’ve made a few efforts to find independent explanation/validation of the technology and seem to find very little that isn’t marketing by the manufacturer. Eerily reminiscent of the early days of Theranos (which was very favourably received on TMF in its early days of aggressive marketing)