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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.

Adam Feuerstein writes regularly for RealMoney.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to adam.feuerstein@thestreet.com.

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