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FDA approves Cyberonics depression device
 WASHINGTON (Reuters) - A
stopwatch-sized device that uses electrical impulses to treat chronic depression
won U.S.
Food and Drug
Administration approval,
Cyberonics CYBX> said on Friday.
About 18.8 million adults in the United
States suffer from depression in any given year, according to the
National Institutes of
Health.
News of the FDA approval sent the company's shares up 8
percent in after hours trading to $48.50. Those gains were pared back to $47.50
before after hours trade was through.
The device, known as the Vagus Nerve Stimulation Therapy
System (VNS), is implanted in the chest and sends impulses to the brain through
a nerve in the neck. It was cleared by the FDA for long-term use in adults whose
depression has not responded to other treatments.
FDA officials cautioned that the VNS device is not to be used
as the first therapy but would give the sickest patients another option.
"We're really dealing with a very sick group of patients
here. These are not standard depression patients," said Dr. Daniel Schultz,
director of the FDA's device center.
The device would carry the strongest warning possible -- a
so-called black box -- cautioning patients that the device is permanent, Schultz
said in an interview. Cyberonics will also have to create a registry to monitor
some patients.
The Houston-based firm ramped up its sales force during the
last three months and has 200 people to start calling on customers on Monday,
Cyberonics Chief Executive Officer Robert "Skip" Cummins told Reuters.
"We have the potential to do $300 million in revenue in the
first four quarters after launch," he said.
Analysts said the long-anticipated decision would boost
shares of the Texas-based firm.
"I expect Monday's trading will be chaotic and the stock will
go up some more on the reality of the good news rather than on the prospect of
the good news," Piper Jaffray analyst Thomas Gunderson said.
But FDA approval sparked renewed concern from patient
advocates. The agency rejected the device in August 2004.
"It's a new low for FDA device approvals. If this device can
get approved with data as unconvincing as these, it's hard to see what can't get
approved," Peter Lurie of Public Citizen's Health Research Group said.
An FDA advisory panel last year supported the device but said
muddled data made it hard to tell if the implant or other factors were at work.
The advisers also worried about suicide risk seen in some study patients who
received the device.
In February, the FDA granted conditional approval if the
company provided more information.
The agency's handling of the Cyberonics application is the
subject of a
Senate Finance Committee
Investigation. Senate Finance Committee Chairman Chuck Grassley, an Iowa
Republican, and the committee's ranking Democrat, Sen. Max Baucus (news,
bio,
voting record)
of Montana, said on Friday that their inquiry would continue.
VNS Therapy is already approved to treat epilepsy in Europe,
the United States and Canada. The device is also approved for
treatment-resistant depression in Europe and Canada in 2001.
(Additional reporting by Deb Sherman in
Chicago, Lisa Richwine in Washington)
By Susan
Heavey July 15, 2005
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