Consistent uptrend in the core epilepsy business, pipeline
development, strategic investments and impressive third-quarter
performance has helped
) to become a global leader in the neuromodulation space.
Recently, in the Barclay's global healthcare conference, the
company disclosed plans on its key areas of development.
The company encouragingly noted that the market for epilepsy
is huge and still to a great extent underpenetrated in the U.S.
The recent data shows that nearly 2.7 million people in the U.S.
are suffering from epilepsy leading to around 4 lac potential
patients (with drug-resistant epilepsy) for Cyberonics.
Moreover, data shows that each year a minimum of 1.25 lac
epilepsy patients are detected, leading to 15,000-24,000 new
patients for the company. Cyberonics believes that this rapidly
growing market has huge potential to maintain its growth
In addition, the company's international operation is quite
attractive.Currently, Cyberonics has international sales in 70
countries and has already made implants in 68,000 patients over
the years. In the last reported quarter, international sales,
representing 19% of the company's revenues, grew a robust 37% (on
a reported as well as CER basis to a record high of $12 million)
with unit growth of 36%. Growth in the overseas market was led by
double-digit European unit sale growth for the 7
Currently, Cyberonics is working hard for market development.
At present, it is emphasizing on domestic market development
through investment as well as working on increasing international
Moreover, Cyberonics is focusing on strengthening its
pipeline, which seems to be on the right track with the company's
AspireHC and AspireSR product line. Furthermore, the generation 3
of the Pulse product, generation 4 of the Demipulse product and
generation 5 of the AspireHC products are expected to boost the
top line in the coming quarters.
With rising uptake of its VNS therapy across the globe,
Cyberonics increased its guidance for the ongoing fiscal,
reflecting the potential to drive growth. Although we remain
apprehensive about the tough macroeconomic scenario and
competitive pressures from
) in the neuromodulation space, considering the advantages of VNS
therapy and the strong untapped potential of the epilepsy market,
we are optimistic about the growth prospects of the company.
The stock currently holds a Zacks Rank #1 (Strong Buy). Apart
) with a similar Zacks Rank is expected to do well in the medical
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