Cyberonics

(CYBX)

Monday said it had received a warning letter from the Food and Drug Administration about manufacturing practices at its Houston medical device plant.

The company said the warning letter and Cyberonics' efforts to answer the FDA's complaint won't interfere with the availability of the VNS Therapy system for epilepsy or Cyberonics' plan to secure FDA approval of the VNS device for treating depression. Cyberonics said it expects to submit a response to the FDA by Jan. 19.

"We are obviously disappointed," said Robert P. Cummins, the company's chairman and CEO, that the FDA characterized as "incomplete" Cyberonics' previous responses to questions raised by FDA inspectors.

FDA examiners looked at the Houston plant's operations between July 20, 2004, and Sept. 15, 2004, and told Cyberonics it had to make certain changes and improvements. The company filed responses on Sept. 17, Oct. 7 and Dec. 8 and also met with FDA inspectors on Nov. 9.

But the company said it received a more strongly worded notice on Dec. 22, stating that Cyberonics' responses "are incomplete and do not satisfactorily" address all the issues raised during last year's inspection.

Cyberonics' VNS Therapy is a device surgically implanted in a patient that delivers mild electrical shocks to a nerve in the brain as a treatment for epileptic seizures. An FDA advisory committee supported the company's application in June to use VNS Therapy as a treatment for depression. But the FDA, in a rare move, overruled the panel and rejected the application on Aug. 11.

Cyberonics has been pursuing an informal appeal to get the FDA to reconsider. If that approach doesn't work, Cyberonics says it will file a formal appeal. The company expects to hear from the agency by the end of this month. If the appeals are unsuccessful, Cyberonics must decide if it wants to conduct more clinical trials to aid its application for treating depression.

In premarket trading, shares of Houston-based Cyberonics dropped $1.37, or 6.6%, to $19.35.