Is Cyberonics the next Ackman-Like Short Seller Drama?

Is Cyberonics the next Ackman-Like Short Seller Drama? January 24, 2013 8:21 AM

benzinga.com

Is Cyberonics the next Ackman-Like Short Seller Drama?

Tim Parker, Benzinga Staff Writer

Tickers: CYBX, HLF
 

If it sounds like Deja-Vu, it may well be. The Bill Ackman versus Herbalife (NYSE: HLF [FREE Stock Trend Analysis]) battle and recent charges against Cyberonics (NASDAQ: CYBX) leveled by a group called Infitialis on TheStreetSweeper blog yesterday.

 

Ackman, a well-known hedge fund manager, has famously charged Herbalife with being an illegal pyramid scheme and publicly stated that he hopes to short the stock to zero. According to a disclaimer posted with the Infitialis report, prior to publication, Both TheStreetSweeper and Infitialis established a short position in Cyberonics.

 

Never heard of Infitialis? According to the report, the group identifies themselves as a research collective that uncovers Wall Street fraud. According to their stated past results, their reports caused a 22 to 99 percent drop in the mentioned stock. Most are OTC or pink sheet stocks.

 

The group calls their Cyberonics report, “our highest conviction and most asymmetric expose yet.”
 

In a detailed report, Infitialis claims that Cyberonics’ main product, an implanted device designed to treat epilepsy and depression by a process called Vagus Nerve Stimulation or VNS, is only effective in a small number of cases.

 

The report cites FDA clinical trials on the device that limit Cyberonics’ VNS treatment to only the rarest cases of epilepsy and depression. According to Infitialis, this represents a much smaller market opportunity than indicated by Cyberonics and Wall Street analysts.

 

The report cites 11 research papers that cast doubt on the effectiveness of VNS. One paper by the Utah Department of Health stated, "Studies have yielded inconclusive results regarding short and long-term efficacy..."

 

Infitialis goes on to point out that the patent covering VNS treatment for epilepsy expired in July 2011. At least two other companies have begun the process of creating and marketing VNS devices.
 

This, along with descriptions of a poorly trained sales staff, are all part of a “bad business model” charge that suggests Cyberonics is not the high growth high margin medical company it advertises itself to be.

 

Finally, Infitialis details what it claims are whistleblower allegations filed January 16, 2013 in Massachusetts federal court. Among the charges filed by, former employee, Andrew Hagarty, are accusations that Cyberonics employees coerce surgeons to prematurely schedule battery replacements as part of a directive to accelerate battery replacement revenue by upper management.

 

According to the Wall Street Journal, Cyberonics responded by saying TheStreetSweeper report discusses information that has long been in the public domain and doesn’t “accurately characterize the benefit that VNS therapy provides patients and the opportunities for the company.”

The company denied knowledge of the recent whistleblower lawsuit brought by Hagarty following his termination. Cyberonics concluded by saying it can’t comment on active litigation but intends to defend vigorously the original lawsuit.

 

The Wall Street Journal reported that Dougherty & Co. analyst, Deepak Chaulagai stated that TheStreetSweeper report contained “wildly misleading” quotes and other inaccuracies about VNS therapy, but wouldn’t comment on the lawsuit in particular.

 

More than 5.6 million shares of Cyberonics stock were traded yesterday, compared with normal average daily volume of around 300,000. The stock is up 36 percent in the last 12 months.

 

Shares of Cyberonics closed Wednesday at $43.98, down 8.5 percent.

 

Tags: cyberonics, infitialis, TheStreetSweeper
Posted in: News, Short Ideas, Rumors

http://www.benzinga.com/news/13/01/3270308/is-cyberonics-the-next-ackman-like-short-seller-drama

New form of depression therapy comes to Madison

 

January 06, 2013 11:00 am • DAVID WAHLBERG | Wisconsin State Journal | dwahlberg@madison.com | 608-252-6125

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Transcranial Magnetic Stimulation.jpg

Rosecrance Health Network

Gayle Laszewski, Transcranial Magnetic Stimulation coordinator at Connections Counseling in Madison, demonstrates how a TMS machine works on Dr. Thomas Wright, chief medical officer for Rosecrance Health Network in Rockford, Ill. Connections Counseling and Rosecrance will start offering TMS therapy for depression in Madison beginning Monday.

Gayle Laszewski, Transcranial Magnetic Stimulation coordinator at Connections Counseling in Madison, demonstrates how a TMS machine works on Dr. Thomas Wright, chief medical officer for Rosecrance Health Network in Rockford, Ill. Connections Counseling and Rosecrance will start offering TMS therapy for depression in Madison beginning Monday.

Enlarge Photo

TMS Center of Madison

For more information, call 608-231-2200 or go to www.connectionscounseling.com.
 

A new brain stimulation therapy for depression is coming to Madison this week.

Transcranial magnetic stimulation, or TMS, uses a magnetic coil positioned on the head to activate targeted brain cells.

TMS is meant for patients who haven’t been helped by medication and seek an alternative to electroconvulsive therapy, the decades-old treatment in which a seizure in induced.

Connections Counseling will open the TMS Center of Madison on Monday at its clinic on Madison’s West Side through a joint venture with Rosecrance Health Network of Rockford, Ill.

During TMS, patients sit in what looks like a dental chair while magnetic pulses, like those from an MRI machine, stimulate nerve cells thought to be involved in mood regulation.

That’s different from electroconvulsive therapy, or ECT, which requires patients to take a muscle relaxant and be under general anesthesia. Those steps help them withstand the seizure generated by current from electrodes on their head.

Madison’s three main hospitals offer ECT. But TMS, approved by the Food and Drug Administration in 2008, hasn’t been available in the area until now. It is offered in Mequon, Stevens Point and Wauwatosa.

Shelly Dutch, director of Connections Counseling, said some patients with depression struggle to work, maintain relationships and avoid suicide despite taking a variety of medications.

She said some worry about side effects from ECT, which can include memory loss.

“The number one attraction for us is that (TMS) is a non-invasive process,” Dutch said. “If they can have a quality of life that is functional, this is definitely a therapy we wanted to invest in.”

Rosecrance has offered TMS in Rockford since 2010 and treated more than 40 patients there, said Dr. Thomas Wright, a psychiatrist who is chief medical director.

Half of the patients have stopped being depressed and others have experienced improvements, Wright said. “Virtually all of our patients have responded to some degree,” he said.

The therapy typically involves five treatments a week for about six weeks, with each session lasting about 40 minutes. Sometimes follow-up treatments are advised.

The average cost is about $8,000. Anthem Blue Cross and Blue Shield of Wisconsin covers TMS, but no insurers based in the Madison-area do. Wright said doctors will help patients request coverage.
About 15 million American adults have major depression each year, according to the National Institutes of Health. In about a third, medications don’t help, Wright said.

The FDA approved TMS largely based on a 2007 study of 301 patients with major depression who hadn’t responded to medication.

Depression improved significantly after six weeks in 14 percent of the patients who got TMS, compared to 5 percent of those who got a fake treatment. Some recent studies have found higher rates of benefit.

Since Madison-area insurers generally cover ECT, it might take a while for TMS to catch on, said Dr. Jerry Halverson, a psychiatrist who is medical director for adult services at Rogers Memorial Hospital in Oconomowoc.

But Halverson said TMS is promising and not as risky as ECT.

“It’s exciting to have more options,” he said.

When Halverson previously worked at Meriter and UW hospitals in Madison, he offered another brain stimulation therapy for depression, called vagus nerve stimulation.

In that therapy, a device implanted under the skin stimulates a nerve thought to help produce certain brain chemicals. Insurers generally didn’t cover the therapy, and it is no longer offered in the Madison area, Halverson said.

Read more: http://host.madison.com/news/local/health_med_fit/new-form-of-depression-therapy-comes-to-madison/article_996ef92c-5679-11e2-a0f9-001a4bcf887a.html#ixzz2HmqskP8F

Mom Blames Nerve Stimulator for Death

Monday, January 07, 2013
Last Update: 9:16 AM PT

Mom Blames Nerve Stimulator for Death By LORRAINE BAILEY CHICAGO (CN) - A girl died of an epileptic seizure after an implanted vagus nerve stimulator failed, her mother claims in court. Carol Holmes, mother of the late Rainia Holmes, sued Cyberonics, the University of Chicago Hospital, and Patti Ogden, APN (advanced practice nurse), in Cook County Court. A vagus nerve stimulator (VNS) is a small device implanted under the skin that sends weak electrical signals to the brain. It is used to treat intractable epilepsy and some forms of depression. Holmes says her daughter underwent surgery at University of Chicago Hospital in 2010, "to replace her existing vagus nerve stimulator with a new vagus nerve stimulator Therapy Demipulse Model Generator." On January 13, 2011, "Ogden performed an adjustment of Rainia Holmes's VNS 103 at U of C," the complaint states. "During the above referenced procedure, Ogden had trouble activating the VNS 103 implanted in Rainia Holmes. After multiple attempts, Ogden increased the normal output from 2 to 2.25 mA [milliamperes], and the mag output was increased from 2.25 to 2.5 mA." Holmes claims that the adjusted device "was defective insofar as it ceased to operate on January 13, 2011 and January 14, 2011." "On January 14, 2011, at or around 1:00 a.m., plaintiff's decedent Rainia Holmes suffered a seizure which abated after a magnet was used to activate the VNS 103. "On January 14, 2011, at 7 a.m., plaintiff's decedent Rainia Holmes was found unresponsive and was pronounced dead upon arrival to the hospital." The mom adds: "A VNS 103 should not cease to operate in the absence of negligence by the adjuster of the manufacturer of the vagus nerve stimulator." She seeks damages for strict liability, negligence, breach of warranty, and wrongful death. She is represented by Larry Rogers with Power, Rogers & Smith.   http://www.courthousenews.com/2013/01/07/53661.htm

J ECT. 2013 Jan 8. [Epub ahead of print]

Vagus Nerve Stimulation in Treatment-Resistant Depression: Acute and Follow-Up Results of an Italian Case Series.

Dell'osso B, Oldani L, Palazzo MC, Balossi I, Ciabatti M, Altamura AC.

Source

From the Departments of *Psychiatry and †Mental Health, Fondazione IRCCS Cà Granda, Ospedale Maggiore Policlinico, University of Milan, Milan, Italy.

Abstract

ABSTRACT: The present study evaluated short- and long-term efficacy and tolerability of augmentative vagus nerve stimulation (VNS) in a group of patients with treatment-resistant depression (N = 6). A statistically significant improvement in the Hamilton Depression Rating Scale (HDRS21) and Montgomery-Asberg Depression Rating Scale after 3 months (P = 0.039 and P = 0.05, respectively) was found in comparison with baseline (VNS implant). After 12 months, a statistically significant improvement was observed in the Hamilton Depression Rating Scale (HDRS21), Montgomery-Asberg Depression Rating Scale, and Clinical Global Impression (P = 0.01, P = 0.005, and P = 0.001, respectively). Patients showed an overall favorable tolerability. Present data support VNS short- and long-term efficacy and tolerability in a small group of patients with treatment-resistant depression. Further controlled investigation is necessary to confirm the present open findings.

PMID:

23303420

[PubMed - as supplied by publisher]

Related citations in PubMed

• A pilot study of vagus nerve stimulation (VNS) for treatment-resistant anxiety disorders.[Brain Stimul. 2008]
  A pilot study of vagus nerve stimulation (VNS) for treatment-resistant anxiety disorders.

  George MS, Ward HE Jr, Ninan PT, Pollack M, Nahas Z, Anderson B, Kose S, Howland RH, Goodman WK, Ballenger JC. Brain Stimul. 2008 Apr; 1(2):112-21. Epub 2008 Mar 28.
• A 1-year pilot study of vagus nerve stimulation in treatment-resistant rapid-cycling bipolar disorder.[J Clin Psychiatry. 2008]
  A 1-year pilot study of vagus nerve stimulation in treatment-resistant rapid-cycling bipolar disorder.

  Marangell LB, Suppes T, Zboyan HA, Prashad SJ, Fischer G, Snow D, Sureddi S, Allen JC. J Clin Psychiatry. 2008 Feb; 69(2):183-9.
• Effects of 12 months of vagus nerve stimulation in treatment-resistant depression: a naturalistic study.[Biol Psychiatry. 2005]
  Effects of 12 months of vagus nerve stimulation in treatment-resistant depression: a naturalistic study.

  Rush AJ, Sackeim HA, Marangell LB, George MS, Brannan SK, Davis SM, Lavori P, Howland R, Kling MA, Rittberg B, et al. Biol Psychiatry. 2005 Sep 1; 58(5):355-63.
• Review Safety and efficacy of Vagus Nerve Stimulation in treatment-resistant depression. A systematic review.[J Affect Disord. 2008]
  Review Safety and efficacy of Vagus Nerve Stimulation in treatment-resistant depression. A systematic review.

  Daban C, Martinez-Aran A, Cruz N, Vieta E. J Affect Disord. 2008 Sep; 110(1-2):1-15. Epub 2008 Mar 28.
• Review Vagus nerve stimulation in depression.[Expert Opin Pharmacother. 2001]
  Review Vagus nerve stimulation in depression.

  Goodnick PJ, Rush AJ, George MS, Marangell LB, Sackeim HA. Expert Opin Pharmacother. 2001 Jul; 2(7):1061-3.

See reviews...See all...

 

http://www.ncbi.nlm.nih.gov/pubmed/23303420

ElectroCore Announces Initial Activities in its Chronic Migraine Prevention and Cluster Headaches Studies Utilizing its GammaCore Therapy

- Company has enrolled first U.S. patients for its FDA approved chronic migraine prophylaxis study

- ElectroCore received FDA approval to begin enrollment of an acute cluster headache study

- Initial enrollment of a cluster headache acute and prophylaxis study has begun in Germany

MORRIS PLAINS, N.J., Jan. 10, 2013 /PRNewswire/ -- ElectroCore®, a company dedicated to developing effective, non-invasive Vagal Nerve Stimulation (nVNS) therapies for serious medical conditions including primary headaches, announced today that initial enrollment has begun for its FDA approved chronic migraine prevention study using its GammaCore nVNS therapy. The randomized, sham-controlled study is enrolling patients at 10 sites across the U.S.

The study, which is expected to offer an initial read out during the first half of this year, will include 60 patients who suffer with migraine more than 15 days per month. Participants will use three 180-second GammaCore treatments per day for two months, comparing the frequency, duration, and severity of their migraines against a control group using a sham device, and against their own baseline data gathered prior to the initiation of the treatment protocol. After the study's initial phases, subjects will be given the opportunity to continue using the prophylactic therapy for six additional months.

"GammaCore is the first non-invasive device capable of stimulating the cervical branches of the vagus nerve, enabling self-administration of therapy without a surgical procedure," said JP Errico, CEO of ElectroCore. "Positive results from this study will bring us one step closer to providing an important new treatment option to the more than seven million Americans who suffer from chronic migraine."

Additional ElectroCore activities include:

• Initial enrollment has begun in a randomized cluster headache study being conducted by leading neurologists at six sites in Germany with the intent of establishing government reimbursement for nVNS therapy. In the first phases of the study, 90 chronic cluster headache patients are being randomized between GammaCore nVNS therapy and the standard of care. After the first four-week phase, all patients enrolled in the study will be provided GammaCore nVNS therapy during a final phase. In this study, the therapy will be used as both an acute and a prophylactic treatment of their condition. GammaCore nVNS therapy has already been CE marked, and is commercially available in Germany and across the European Union.
  
• ElectroCore received FDA approval to begin a pivotal study of GammaCore as an acute treatment for cluster headaches. This trial, expected to begin enrolling during the first quarter of 2013, will study the acute benefits of treatment of cluster headache events in 150 chronically suffering subjects at 15 sites across the U.S. During the initial phase of the study, subjects will be randomized against a sham device for a period when they will treat up to five headache events in a two-week period. At the conclusion of the first phase, all 150 subjects will be provided access to the GammaCore nVNS therapy for a period of six months. This study is expected to read out with an interim analysis in the first half of this year. Based on the results of the study, ElectroCore plans to submit for U.S. Food & Drug Administration approval of GammaCore for the acute treatment of cluster headaches.
  
• GammaCore technology was featured in a poster session at the 2012 European Headache and Migraine Trust International Congress in London. Fourteen patients attending headache centers in the U.K. and Ireland were offered non-invasive VNS treatment and questioned during routine follow up about their experience with the device and the perceived impact. Thirteen felt there was an overall improvement in their condition since using the device (the median device use period was 13 weeks), suggesting that GammaCore appears to be well-tolerated and effective in both the acute and preventive treatment of episodic and chronic cluster headache.

About ElectroCore®ElectroCore is a healthcare company focused on non-invasive neuromodulation therapies for the treatment of diseases and disorders. The company has developed non-invasive Vagal Nerve Simulation (nVNS) therapies intended to treat and/or prevent symptoms of a number of highly prevalent and disabling conditions. ElectroCore currently has three commercial products on the market: GammaCore®, AlphaCore®, and GammaCore VET™. The company is headquartered in Morris Plains, NJ, with international offices in Stockholm, Sweden, Hamilton, Bermuda, and Sydney, Australia.
For more information, visit: http://www.electrocoremedical.com/.

SOURCE ElectroCore Medical

http://www.prnewswire.com/news-releases/electrocore-announces-initial-activities-in-its-chronic-migraine-prevention-and-cluster-headaches-studies-utilizing-its-gammacore-therapy-186303961.html