FDA rejects Cyberonics device, contradicts panel

The US Food and Drug Administration has refused to approve a pacemaker-like device made by Houston-based Cyberonics to treat depression rejecting the advice of its own panel of experts.

The panel had recommended approving the nerve-stimulating device, and the agency almost always follows such recommendations.

Cyberonics had been banking on approval of the Vagus Nerve Stimulator to help fuel its growth. The company generates US$110 million a year from the device as a treatment for epilepsy. Analysts estimate the market for chronic depression could be 10 times bigger.

"It is a devastating blow," said analyst Fariba Ghodsian, managing partner at CCL Partners. "This was the upside everyone was looking for."

Cyberonics said the FDA's reasons for rejecting the device, which is inserted in the neck and stimulates neurons in the brain, included worsening depression in some patients in clinical trials.

The FDA also criticised the design of the clinical trial, which compared patients with the device with a control group that took a variety of depression drugs. Typically, trials are conducted on a randomised basis, where patients don't know whether they are being given the experimental treatment.

Chief Executive Robert Cummins said Cyberonics is considering all options, including legal action, to "try to convince the FDA that it made a mistake."

Cummins said "there was nothing new" in the FDA rejection notice, "nothing that hadn't been considered and discussed at the panel meeting,"

"The FDA inexplicably has chosen to ignore the advice of its advisory panel," he said.

The FDA denied Cyberonics' claim that it was blindsided by the decision. "There were issues relating to the design of the clinical trial that were discussed with the company prior to the decision having been made," said Daniel Schultz, director of the FDA Centre for Devices and Radiological Health.

The FDA advisory panel voted 5 to 2 in June to recommend approval of the device for chronically depressed patients who had failed other treatments.