FDA Clears Cyberonics' AspireHC
Cyberonics’ AspireHC generator represents the fifth generation of VNS Therapy. It has a longer battery life, more user-friendly features and improved electronics that prove more beneficial to VNS patients as well as physicians. The FDA approval of AspireHC is expected to pave the way for the AspireSR seizure response system generator, which is the subject of the E-36 clinical trial in Europe. Cyberonics plans to submit the re-designed AspireSR generator to the ethics committee and competent authority approvals for the E-36 clinical trial by the end of its fiscal 2012.
Presently, about 118 people worldwide have been provided with the AspireHC or AspireSR generators. Prior to the withdrawal of AspireHC generator, this model contributed around 9% of worldwide sales of Cyberonics. The company believes that the re-designed model of AspireHC will regain sales growth in the upcoming quarters.
Amidst several headwinds in the form of shipment cancellation, mounting third-party reimbursement issues along with stiff competition in the neuromodulation space from players like Medtronic (MDT) and St. Jude Medical Inc. (STJ), the re-designed product approval of Cyberonics is a relief for the company. Additionally, the company’s effort to expand in Europe, Japan, Latin America, China and India is encouraging. The company is investing in these countries which should boost its international performance in the rest of fiscal 2012. Presently, Cyberonics retains a Zacks #3 Rank (Hold) in the short term, in line with long-term Neutral recommendation on the stock.