) announced the 100,000th patient implant of its Vagus Nerve
Stimulation (VNS) Therapy system. The announcement comes in the
fifteenth year of VNS approval for the treatment of epilepsy by
the U.S. Food and Drug Administration (FDA) and the twenty-fifth
anniversary of Cyberonics' founding.
The 100,000th patient implant of its flagship product marks a
landmark in Cyberonics' operating history. It also reflects the
widespread acceptance of the company's VNS Therapy system as a
treatment for refractory epilepsy.
The Epilepsy Market
According to the U.S. Centers for Disease Control and the
National Epilepsy Foundation, around 2.0 million individuals in
the U.S. have some form of epilepsy, with 140,000 new cases
diagnosed each year. Thus, the market is growing rapidly and has
Recently disclosed by the Institute of Medicine Report, roughly
one in 26 individuals are prone to suffer from epilepsy at some
point during their lives. Clinical studies conducted by the New
York University support Cyberonics' VNS Therapy system to treat
refractory epilepsy. The data suggest that the VNS Therapy system
was successful in reducing seizures by at least 50% in more than
60% of the patients under observation. Further, studies from the
Emory University also support the use of the VNS Therapy system,
based on a cost-benefit analysis.
VNS Leads the Upside Potential
Cyberonics grossed more than $50 million in revenues for the
second successive quarter on the back of robust growth in the
U.S. epilepsy device market. In the second quarter of fiscal
2013, revenues increased 17% year over year to $63 million.
While domestic sales of epilepsy devices soared 16%,
international sales jumped 28.3% year over year, favorably
impacted by double-digit sales growth in Europe and increased
shipments to Japan as well as improved sales in all other
international regions. Over the last four years, epilepsy market
revenues in the U.S. increased 97% and we expect the momentum to
continue. Moreover, international performance should improve on
account of increased sales and marketing efforts, and geographic
We currently have a long-term 'Outperform' recommendation on
Cyberonics which carries a short-term Zacks #2 Rank (Buy). With
no dearth of near-term positive catalysts, competitive pressure
St. Jude Medical
) remains our only concern.
CYBERONICS INC (CYBX): Free Stock Analysis
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