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Can a Cyber Implant Cure Depression?

CNN Money

U.S. regulators have given conditional approval to Cyberonics Inc.'s bid to sell an implanted device to treat chronic depression, the company said Wednesday, sending its shares up over 30 percent.

Houston-based Cyberonics (Research) said it expects full U.S. Food and Administration approval by May.

The VNS Therapy System is a pacemaker-like device implanted in the chest that delivers electrical impulses to the brain through an electrode attached to a nerve in the neck. Cyberonics already sells the implant for reducing seizures from epilepsy.

It costs about $20,000, including surgical and hospital expenses, said Cyberonics Chief Executive Skip Cummins.

The FDA said approval was conditional on final labeling, protocols for a post-marketing dosing study and patient registry as well as resolution of manufacturing issues and any outstanding clinical trial issues.

"The conditions are straightforward. We are making good progress on resolving them," Cummins said.

The device is the only product Cyberonics sells. Annual sales are about $110 million. Some analysts estimate the device's market for depression -- about 4.4 million Americans are estimated to suffer from treatment-resistant depression -- would be as much as ten times larger than the one for epilepsy.

Last June, an FDA advisory panel voted 5-2 to recommend approval of the device for chronically depressed patients who had failed other treatments. The agency, however, turned down the company's application in August.

Cyberonics then submitted an amended application, hoping to overcome FDA concerns about the device's safety and effectiveness for relieving severe depression.

The conditional FDA approval is for patients who have failed at least four other treatment regimens, Cummins said.

Side effects of the device include hoarseness and throat tingling.

Shares of Cyberonics were up $9.19, or 33 percent, higher at $36.67 on the Nasdaq.

The company said it is building its organization to support a potential late May launch of the product for depression.

Cyberonics also said its sales and earnings for the fiscal third quarter ended in January will likely beat previous guidance of $25 million in sales and a net loss of $3.3 million, or 13 cents a share.

Analysts on average expect a quarterly net loss of 11 cents a share, according to Reuters Estimates. Top of page

SOURCE: CNN Money

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