FDA Rejects Cyberonics Depression Device

U.S. regulators have rejected Cyberonics Inc.’s experimental device to treat depression, the company said on Thursday, sending its stock down 37 percent in electronic trading before the market opened.

The decision comes as a surprise as an advisory panel to the U.S. Food and Drug Administration had recommended approval of the VNS device, which is already approved to treat epilepsy. The FDA rarely overrules its advisory panels. The surgically implanted device sends impulses to the vagus nerve and affects neurons in the brain. Cyberonics had been banking on approval to help fuel its future growth. Chronic depression is a bigger market than epilepsy. The Houston-based company said the FDA’s reasons for rejecting the device included worsening depression in some patients, and potential biases built into the structure of the trial of the device. In June, an advisory panel ruled that the device was safe to treat chronically depressed patients who had failed other treatments. But some members of the panel were troubled by what they saw as a lack of substantial clinical data to support claims for the effectiveness of the device. “We are shocked and bewildered by FDA’s decision to ignore its expert advisory panel’s recommendation,” said Robert Cummins, Cyberonics’ chief executive officer. Cyberonics said it is considering all regulatory and legal options to try to get the FDA decision reversed. Cyberonics shares fell to $15 in electronic trading on Inet after closing on Wednesday at $23.95 on Nasdaq. (Source: Reuters Health News: August 2004)