Shares of Cyberonics ( CYBX) jumped Thursday after a First Albany Capital analyst raised his rating on the Houston medical devices company to buy from neutral.

William J. Plovanic said he changed his rating due to a favorable risk/reward scenario that includes the prospects of Cyberonics becoming a takeover target again.

Plovanic said he believed Advanced Neuromodulation Systems ( ANSI) might make another run at Cyberonics. Last year, Advanced Neuromodulation Systems bought about 14.7% of Cyberonics shares, then offered to buy the rest of the company for $22 a share. Cyberonics rebuffed the proposal, and its competitor finally backed off.

Plovanic said he believed Advanced Neuromodulation Systems could pay as much as $30.50 a share for Cyberonics "without diluting current shareholders."

His comments sent shares of Cyberonics up $1.57, or 7.8%, to $21.56.

Plovanic's risk/reward scenario also anticipates a final decision by the Food and Drug Administration concerning Cyberonics' application that its VNS Therapy be used as a treatment for depression patients who haven't responded to other therapies. VNS Therapy consists of a device surgically implanted in a patient that delivers mild electrical shocks to a nerve in the brain to treat epileptic seizures.

An FDA advisory committee supported the company's application in June to use VNS Therapy for depression. But the FDA overruled the panel and rejected the application on Aug. 11. Cyberonics has been pursuing an informal appeal to get the FDA to change its mind.

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.

Even if the FDA rejects the depression application, Plovanic said, the "epilepsy franchise still provides significant value and would interest potential suitors." (He doesn't own shares; his firm is a market maker for both Cyberonics and Advanced Neuromodulation Systems.)