Cyberonics' New Kit for VNS - Analyst Blog

Recently Cyberonics Inc. (CYBX), a leading neuromodulation company, has received approval from the US Food and Drug Administration (FDA) for AspireHC (High Capacity), a new and improved generator to be used in vagus nerve stimulation (VNS) therapy.

Cyberonics expects the AspireHC generator, represents the fifth generation of VNS Therapy. It has longer battery life, more user-friendly features and improved electronics that proves more beneficial to VNS patients as well the physicians. This approval will also pave the way for introduction of new products in future like the AspireSR seizure response system, whose the European clinical trial is expected by the first half of 2011. Cyberonics plans to begin the limited launch of AspireHC generator in the first quarter of fiscal 2011 (ending April 29).

Cyberonics' VNS system is a non drug, surgically implanted medical device that stimulates the vagus nerve by sending electrically pulsed signals. It is specially used for treatment-resistant depression when all other anti-depressant treatments fail.

Cyberonics' VNS therapy system is the first implantable medical device to receive FDA approval for the treatment of epilepsy. The device has the potential to treat other neurological disorders, such as depression, Alzheimer's disease, anxiety, bulimia, fibromyalgia, obesity, obsessive-compulsive disorder, multiple sclerosis and traumatic brain injury. The device is widely accepted amongst neurosurgeons, as reflected by the sales of the company. Till now more than 60,000 patients worldwide have been implanted with the VNS therapy system for epilepsy and many more have used it for depression.

Cyberonics reported revenues of $47.5 million during the second quarter of fiscal 2011, 17% higher than $40.7 million in the year-ago period. Sales related to epilepsy units increased 14% in the US and 6% in the international market.

Cyberonicsenjoys a strong position in the neuromodulationmarket. We are encouraged by its improvement in the international business. With the presence of players such as Medtronic (MDT) and St. Jude Medical (STJ), the company faces stiff competition. We are also concerned about the reimbursement related issues faced currently by the company.

Thus, we remain Neutral on the stock.

 
CYBERONICS INC (CYBX): Free Stock Analysis Report
 
MEDTRONIC (MDT): Free Stock Analysis Report
 
ST JUDE MEDICAL (STJ): Free Stock Analysis Report
 
Zacks Investment Research