FDA Rejects Cyberonics' Device
The FDA rejected Cyberonics' (CYBX), VNS nerve stimulation device for use in patients suffering from severe depression this morning. As I and others have said all along, the data supporting the efficacy of the VNS device in depression was weak, to put it mildly. The FDA obviously agreed, overruling a recommendation for approval from an advisory panel held in May.
The company's press release basically blasted the FDA's decision in some very angry terms. But in the end, it seems as if negative data, and not emotion, spin and arm twisting, wins this battle.
CEO Skip Cummins just concluded what was an incredibly inflammatory conference call regarding this morning's FDA rejection of the company's VNS nerve stimulation device. Cummins blasted the FDA's decision as "shocking," "inexplicable" and "unprecedented." He strongly suggested that the FDA was to blame now for the suicides of 2,500 people with treatment-resistant depression every month (It should be noted that the figure quoted by Cummins just two months ago was 1,000 suicides per month.) Regardless, does Cummins really think that scorching the FDA is the best way to get the agency to reverse its decision? It seems like a funny way to negotiate, but then, Cummins has his own unique style.
This FDA rejection should only come as a surprise to people who didn't pay attention to the failed studies and weak data that Cyberonics presented to the FDA. The rejection is a surprise only to those who believed that emotion can or should trumpet the scientific process. (It can't.)So what's next? Cyberonics said it will appeal, but the odds are not great. If that doesn't work, then a new study will be required. Cummins admitted that this route will likely take another three years. As for Cyberonics' epilepsy business, and more importantly, the value of that business, well, I pretty much stand by what I wrote a couple of months ago. Bottom line: Epilepsy is not worth much. You can read the details here.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV