Cyberonics, Inc., a medical device company, engages in the design, development, sale, and marketing of an implantable medical device, the VNS Therapy System, which delivers vagus nerve stimulation (VNS) therapy using pulsed electrical signals applied to the vagus nerve for the treatment of refractory epilepsy and treatment-resistant depression (TRD). The company is also investigating the use of VNS and other neuromodulation therapy for other indications, including chronic heart failure, and developing non-implantable device solutions for the management of epilepsy. The company’s VNS Therapy System includes an implantable pulse generator to provide appropriate stimulation to the vagus nerve; a lead that connects the pulse generator to the vagus nerve; a surgical instrument to assist with the implant procedure; equipment to enable the treating physician to set the pulse generator stimulation parameters for the patient; instruction manuals; and magnets to suspend or induce stimulation manually. The VNS Therapy pulse generator and lead are surgically implanted into patients generally during an outpatient procedure. The battery contained in the generator has a finite life, which varies according to the model, as well as the stimulation parameters for each patient. If a physician determines that a patient’s battery is at or near the end of its useful life or that the generator should be replaced for clinical reasons, a patient or a patient’s caregiver may choose to implant a new generator. The generator may be replaced with or without replacing the original lead. The U.S. Food and Drug Administration (FDA) approved the company’s VNS Therapy System for use as an adjunctive therapy in epilepsy patients approximately 12 years of age in reducing the frequency of partial onset seizures that are refractory or resistant to antiepileptic drugs. Regulatory bodies in Canada, the European Economic Area, certain countries in Eastern Europe, Russia, South America, Africa, Australia and certain countries in Asia, including Japan, China and Taiwan, have approved the VNS Therapy System for the treatment of epilepsy, many without age restrictions or seizure-type limitations. The company sells the VNS Therapy System for refractory epilepsy to hospitals and ambulatory surgery centers. In addition to maintaining and expanding its regulatory approvals, its ability to successfully expand the commercialization of the VNS Therapy System depends on obtaining and maintaining favorable insurance coverage, coding and reimbursement for the device, the implant procedure and follow-up care. This coverage allows the company’s customers to invoice and be paid by third-party payers. Marketing and Sales The company markets and sells its products for drug-resistant epilepsy through direct sales and marketing teams. In the U.S., its sales and marketing plan focuses on creating awareness and demand for the VNS Therapy System among epileptologists and neurologists who treat refractory epilepsy, implanting surgeons, ancillary healthcare professionals, third-party payers, hospitals and patients and their families. The company conducts direct-selling activities using a specialized sales force consisting sales personnel; field clinical engineers and marketing personnel focused on educational and promotional marketing programs; and case managers experienced in patient education, insurance verification and authorization issues. The company is approved to market its products in approximately 73 countries. The company markets and sells its products in these countries through a combination of a direct sales force in certain European countries and independent distributors elsewhere. Government Regulation The products the company manufactures and markets are subject to regulation by the FDA under the federal Food, Drug and Cosmetic Act and, in some instances, state authorities and foreign governments. The company is subject to the Transparency Reports and Reporting of Physician Ownership or Investment Interests (the Sunshine Act), which was finalized by Centers for Medicare and Medicaid Services on February 8, 2013 as part of the federal Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act of 2010, (the Health Care Acts). Patents, Licenses and Proprietary Rights As of April 25, 2014, the company owned or licensed approximately 173 U.S. patents and 299 pending U.S. patent applications, in addition to foreign patents and applications corresponding to the foregoing U.S. patents and applications. The company has filed counterparts of certain of its key U.S. patent applications in certain international jurisdictions and owns or licenses approximately 67 patents issued by the European Patent Office or other international authorities and 162 patent applications pending in the European Patent Office or before other national or international authorities. History Cyberonics, Inc. was founded in 1987. The company was incorporated in 1987.
(CYBX:Consolidated Issue Listed on NASDAQ Global Select )
100 Cyberonics Boulevard
Houston, TX 77058
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