CEO Skip Cummins wants to go it alone in his battle against the Food and Drug Administration. Now, he's getting his wish.
Advanced Neuromodulation Systems
withdrew its $22-per-share takeover offer for the Houston-based medical device maker, a bid that Cyberonics had already spurned. ANS may own just under 15% of Cyberonics, but Cummins made it clear from the beginning that there would be no friendly merger. A hostile bid, it seems, was not something ANS was ready to initiate.
Cyberonics shares were recently down $1.47, or 7.2%, to $18.99. ANS stock was off 10 cents, or 2.3%, to $4.19.
So, Cummins can now focus solely on his quest to convince the FDA to overturn its
rejection of the company's VNS Therapy device for the treatment of severe depression. The FDA rejected Cyberonics' application in August, sending shares of the company tumbling; the stock recovered in part because of the ANS bid.
Last week, Cyberonics submitted to the agency additional efficacy and safety data on the VNS device. The FDA is expected to announce a decision on Cyberonics' appeal by the end of January, according to the company.
Cummins spent the bulk of his time Thursday at the UBS Global Life Sciences conference explaining -- I dare say
-- to the assembled investors why the FDA's rejection was wrong in so many ways. Nothing I heard Wednesday changed my
bearish view. I think the new VNS Therapy data submitted to the FDA will be unconvincing, and when the agency speaks, it will once again ask Cyberonics to conduct another clinical study to prove that the VNS is an effective treatment for severe depression.
If Cummins is successful in getting the FDA to change its mind, it will be because of his strong force of will. His anger at the agency and his utter determination to right what he perceives as a wrong was on full display at the UBS confab.
"Out of the blue, without so much as the dignity of communication, we got a not-approvable letter from the FDA," said Cummins, raising his voice as he explained what happened on Aug. 12.
At another moment, Cummins used stark terms to argue why the VNS Therapy device was the only hope for patients suffering from severe depression. "The only real way out for people with treatment-resistant depression is suicide." Later during his presentation, he said without the VNS device, suicide for these people was "the only solution."
Those are harsh words, the implication being that the FDA, by denying VNS Therapy for depression, is partly to blame for these suicides.
More than a few people have suggested that Cummins, by continuing to castigate the FDA for its decision, is all but wiping out any chance that Cyberonics gets a fair rehearing. But Cummins apparently believes that applying pressure to the agency, and escalating the rhetoric, is going to get the job done.
Several times during his 30-minute breakout session Thursday, Cummins talked about gathering outside groups to lobby on his behalf.
"A large number of patients, psychiatric thought leaders and people the FDA answer to have weighed in with shock and dismay at this unprecedented decision," he said.
The new VNS Therapy data submitted last week, Cummins added, should "give the FDA a way out of its bad decision."
But in response to a question, Cummins admitted again that the FDA, in its not approvable letter, specifically asked the company to conduct another randomized, controlled study. None of the data submitted to the agency last week address this request.
And that, to me, gets to the crux of the matter. While in some ways Cummins' determination is admirable, invective doesn't get a medical device, or a drug, or anything, through the FDA approval process. Cyberonics still has a lot of work ahead of it.
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