CYBX Resumes Reimbursement Efforts - Analyst Blog
April 08 2013 - 11:00AM
Zacks
Cyberonics (CYBX)
recently provided further information on its reimbursement claim
submission to the Centers for Medicare & Medicaid Services
(CMS). The leading player in the neuromodulation space is currently
seeking reimbursement coverage for all treatment-resistant
depression (TRD) indications for its well-regarded VNS Therapy
System.
Cyberonics provides VNS Therapy for the treatment of refractory
epilepsy and TRD. The VNS Therapy System is delivered from a small
pacemaker-like generator implanted in the chest that sends
preprogrammed, intermittent, mild electrical pulses through the
vagus nerve in the neck to the brain.
The VNS Therapy System was approved as treatment for TRD in 2001 in
Europe and Canada. Subsequently, the system received approval
in the U.S. (for patients of 18 years or above) in Jul 2005.
Regulatory bodies in the European Economic Area, Canada and Israel
also approved the system for patients without age restrictions.
However, Cyberonics no longer actively sells or markets the product
for depression in the U.S. market due to reimbursement issues
following CMS determination of non-coverage of VNS Therapy for
patients with TRD. The company also does not actively market VNS
Therapy for TRD in Europe and Canada.
Earlier, Cyberonics submitted an appeal to reconsider reimbursement
coverage for VNS Therapy for TRD to CMS. Subsequent to the request,
the company expected some form of formal feedback from CMS, either
affirmative or dissenting, before the end of Mar 2013. However,
Cyberonics is yet to receive any acknowledgement from CMS to
date.
Although the company is still engaged in discussions with CMS to
reconsider the request, the timing and result of the ongoing
dialogue is uncertain. Nonetheless, Cyberonics is optimistic about
securing reimbursement coverage for VNS Therapy for TRD on the back
of positive clinical outcomes obtained in the last five years. We
believe that the reimbursement coverage for TRD indication is
likely to garner incremental revenues in the U.S. as well as in the
international market.
Uptrend in the core epilepsy business, pipeline development,
strategic investments and consistently impressive quarterly
performance reflects the strong growth potential of Cyberonics.
Accordingly, the stock carries a Zacks Rank #1 (Strong Buy). Other
Zacks Rank #1 medical stocks are Cepheid (CPHD),
Given Imaging (GIVN) and Medical
Action (MDCI).
CEPHEID INC (CPHD): Free Stock Analysis Report
CYBERONICS INC (CYBX): Free Stock Analysis Report
GIVEN IMAGING (GIVN): Free Stock Analysis Report
MEDICAL ACTION (MDCI): Free Stock Analysis Report
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