) recently provided further information on its reimbursement
claim submission to the Centers for Medicare & Medicaid
Services (CMS). The leading player in the neuromodulation space
is currently seeking reimbursement coverage for all
treatment-resistant depression (TRD) indications for its
well-regarded VNS Therapy System.
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Cyberonics provides VNS Therapy for the treatment of refractory
epilepsy and TRD. The VNS Therapy System is delivered from a
small pacemaker-like generator implanted in the chest that sends
preprogrammed, intermittent, mild electrical pulses through the
vagus nerve in the neck to the brain.
The VNS Therapy System was approved as treatment for TRD in 2001
in Europe and Canada. Subsequently, the system received
approval in the U.S. (for patients of 18 years or above) in Jul
2005. Regulatory bodies in the European Economic Area, Canada and
Israel also approved the system for patients without age
However, Cyberonics no longer actively sells or markets the
product for depression in the U.S. market due to reimbursement
issues following CMS determination of non-coverage of VNS Therapy
for patients with TRD. The company also does not actively market
VNS Therapy for TRD in Europe and Canada.
Earlier, Cyberonics submitted an appeal to reconsider
reimbursement coverage for VNS Therapy for TRD to CMS. Subsequent
to the request, the company expected some form of formal feedback
from CMS, either affirmative or dissenting, before the end of Mar
2013. However, Cyberonics is yet to receive any acknowledgement
from CMS to date.
Although the company is still engaged in discussions with CMS to
reconsider the request, the timing and result of the ongoing
dialogue is uncertain. Nonetheless, Cyberonics is optimistic
about securing reimbursement coverage for VNS Therapy for TRD on
the back of positive clinical outcomes obtained in the last five
years. We believe that the reimbursement coverage for TRD
indication is likely to garner incremental revenues in the U.S.
as well as in the international market.
Uptrend in the core epilepsy business, pipeline development,
strategic investments and consistently impressive quarterly
performance reflects the strong growth potential of Cyberonics.
Accordingly, the stock carries a Zacks Rank #1 (Strong Buy).
Other Zacks Rank #1 medical stocks are