UPDATE 1-Leerink starts Mela Sciences with outperform

* Expects regulatory nod for MelaFind

* Sets price target of $9 on stock

July 26 (Reuters) - Leerink Swann started Mela Sciences Inc (MELA.O) with an "outperform" rating, saying it expects U.S. regulatory approval for the company's skin cancer screening device MelaFind.

The brokerage, which has a price target of $9 on Mela shares, said it expects the company's melanoma detection device to gain a positive recommendation from its November clinical data presentation with the U.S. Food and Drug Administration's advisory panel.

It expects the U.S Food and Drug Administration approval to follow shortly thereafter.

"Mela can then drive MelaFind into dermatology practices well, enabling an attractive recurring revenue stream," analyst John Sullivan wrote in a research note.

Last week, the U.S. health regulator's advisory panel meeting to review Mela's device was postponed to November. [ID:nSGE66K0L5]

"Upon FDA approval of MelaFind, we expect Mela will see compelling financial progress," Sullivan said.

Shares of Mela closed at $6.82 Friday on Nasdaq. (Reporting by Shailesh Kuber in Bangalore; Editing by Vyas Mohan)