Medical Device Daily

It will be no great surprise if Cyberonics (Houston) becomes the latest medical device firm that increasingly finds itself described in news reports with the adjective “beleaguered.”

The firm, developer of the vagus nerve stimulation (VNS) system, is facing a growing amount of criticism, despite what it calls a steady stream of endorsements for what it has bannered as its flagship application for the product – therapy for treatment-resistant depression (TRD).

The criticisms it is facing are both internal and external.

This week, a group of Cyberonics shareholders issued a statement citing a “series of bad decisions” by the company's management and board and that they are continuing their effort to nominate three directors, ostensibly to influence a change in direction. And on Tuesday, the company received a second delisting notice from the Nasdaq, citing non-compliance with listing standards due to a failure to file financial results for the quarter ended July 28. The delay in filing reports with the SEC is the result of an investigation by the commission into the company's stock option practices, primarily to Skip Cummins, president/CEO of the company.

Additionally, the group Public Citizen (Washington) continues its criticism of the company's claims for the benefits of VNS therapy to treat TRD. Following last week's press statement from Public Citizen arguing that the approval of Cyberonics' system for treatment of TRD should be revoked (Medical Device Daily, Sept. 8, 2006), the company issued a lengthy statement, clearly offered as a response to Public Citizen's criticism. The statement reports on public comments concerning VNS therapy for TRD, backing its attempt to seek CMS reimbursement, saying that those comments offered overwhelming endorsement of the therapy.

In the statement, Shawn Lunney, vice president of market development for Cyberonics, reported that CMS received more than 1,3000 comments supporting qualified psychiatrists' and fully-informed patients” access to VNS therapy for TRD and fewer than 10 negative comments. That support, he said, came from “more than 250 psychiatric thought leaders and psychiatrists; 175 other healthcare professionals including neurologists, surgeons, nurses, social workers and psychiatrist; 175 other healthcare professionals including neurologists, surgeons, nurses, social workers and health economist; more than 650 TRD patients and family members, some 40 patient advocacy organizations . . . and some 20 Senators and Congressmen.”

The statement also cites figures from the company's database to collect what it called “long-term” results of early post-approval experience with VNS therapy for TRD. According to Richard Rudolf, MD, vice president, clinical and medical affairs and chief medical officer for Cyberonics, the outcomes data employs “standard physician assessment tools to rate patient outcomes and to collect data on stimulation parameters, concomitant treatments and healthcare utilization.” He said that data showed that for 50 TRD patients after three months of VNS Therapy, “an average of 30% of patients were rated as much or very much improved across six functional outcomes. In addition, 34% of patients had a decrease in their antidepressant medications, 96% of patients had no ECT and 90% of patients had no hospitalizations in their first three months of treatment . . .”

He said these results mirrored the results of outcomes for epilepsy patients treated with VNS therapy, an earlier application of the therapy.

Responding to this release from Cyberonics, Dr. Peter Lurie, deputy director of health research for Public Citizen, told MDD, “It doesn't do anything for me,” and that the statement was marked by a clear lack of science, or scientific rigor.

As to the supporting comments Cyberonics has garnered, he said, “hopefully, this entire thing will be resolved on the basis of science, not on the basis of some popularity contest.” He said that those lauding VNS therapy for TRD are providing their stories, but “this shouldn't be resolved on the basis of anecdote – either anecdotes from patients who believe the device helped them or from doctors who have talked to them.

“This should be a scientific contest, and the company has already lost the most important contest, the contest of its device against the comparative effectiveness of the device compared to placebo.” The company's own studies indicate, he said, that the therapy was no better than placebo.

Lurie also lamented the FDA's handling the company's application and its ultimate approval of the system, calling that a “ridiculous process.”

The experience of Cyberonics, he said, serves as a disincentive for the industry to do complete and thorough science. “Why bother with science? – you only need as much science as they need to get FDA approval.”

Adding to the company's difficulties, The New York Times on Sunday offered a lengthy discussion of the company and its battle to promote the application for depression, the story indicating primarily a negative experience with the therapy, since most of its detailed concerned a female patient who suffered setbacks after implantation with the device and eventually had it removed. Following explant, she felt like she was “beginning to get my life back,” she told the Times.

Lurie said he was as little convinced by the negative anecdotes as he was by those on the positive side, saying that the pudding's proof should be “a long-term, placebo-controlled clinical trial – that's what's needed.” Such a trial should be done, he said, by an independent source, reiterating previous charges that a trial conducted by the company is flawed and that positive write-ups of the therapy have largely been “ghost-written.”

Lurie contended that the apparent broad show of support for use of the VNS treatment of TRD indicates a wish for “more choices.”

“It's always going to be tempting to want more choices in this therapeutic situation,” he said. “But the fact that current choices have limitations is not an argument to add additional drugs or device. A new drug or device actually has to work. The fact that there are inadequacies with what we have is not sufficient to justify [product] approval.” That approach he termed “simple-minded – more choices aren't better than fewer if additional choices offer nothing except money spent on more surgery.”

And in a comment hardly designed to make device manufacturers happy, he added: “There is no reason why a device should get on the market with a lower standard of evidence than a drug.”

As to the notices from Nasdaq, the company issued a statement on Tuesday saying it will address both delays at a Sept. 14 hearing with Nasdaq. The letter seeking a change in the company's direction came from Metropolitan Capital Advisors (New York) “and related parties,” reflecting 7.33% ownership in the company.

“In light of recent developments,” the letter says, “we remain steadfast in our commitment to see these [three] nominees elected to the board of Cyberonics.

“If there was ever a question about the need for change at Cyberonics, recent events have provided an emphatic answer,” the letter states. “We believe that Cyberonics has a valuable franchise and enviable market position. However, that value has been masked due to the lack of credibility of senior management that consistently over-promised and under-delivered, and by a board that continually rewards such behavior with ever increasing compensation.”

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