By CBS MarketWatch
Last Update: 10:04 AM ET June 16, 2004
SAN FRANCISCO (CBS.MW) -- Shares of Cyberonics surged as much as 64 percent Wednesday in response to a regulatory panel's recommendation that the device maker's implant system be approved as a depression therapy.
After being halted at $19.58 on Tuesday ahead of the panel's decision, the Houston-based company's shares rose as high as $32.15 and changed hands lately at $31.06, up $11.48, or nearly 59 percent.
Late Tuesday, Cyberonics ( CYBX : news , chart , profile ) said a Food and Drug Administration advisory panel recommended approval of its VNS system for patients suffering from treatment-resistant depression.
The device, similar to a pacemaker, is already used to treat patients with epilepsy.
While the recommendation is not binding, the full FDA typically follows the lead of its advisory panels.
"It's a giant step forward toward approval," said Skip Cummins, chairman and CEO of Cyberonics.
Gaining marketing approval from the FDA for depression would make Cyberonics "the market leader in what's considered by many to be the next frontier in medical devices," Cummins said.
Approximately 4.4 million Americans suffer from treatment-resistant depression, according to Cummins. That's more than 10 times the size of the company's current potential market for treatment-resistant epilepsy, he said.
The company believes the device may eventually be able to be used to treat other conditions as well, including Alzheimer's disease, anxiety and chronic pain. The VNS system applies "mild, intermittent electrical pulses" to a nerve in the neck.
Patients in the company's studies had suffered depressive illness for an average of more than 25 years, Cummins said.