Epilepsy Device Pioneer Cyberonics Still Evolving After 25 Years

Long before the explosion in the personal electronics field brought us iPods and iPhones, biomedical engineers were making devices to interact with the personal electrical “circuitry” that regulates the human heart and other organs. Back in 1958, Minneapolis, MN-based Medtronic produced its first battery-operated, portable pacemaker to stimulate nerves in the malfunctioning heart. It looked something like an old Sony Walkman cassette player strapped around the waist.

In 1987, Texas entrepreneurs founded a company to try a nerve stimulation device as a treatment for epilepsy. The units now marketed by that company, Houston, TX-based Cyberonics (NASDAQ: CYBX) still have the same basic design: a surgeon implants a unit called a generator under the skin of the upper chest, then threads an electrode from the generator up through the side of the neck. The thin wire, wrapped around the vagus nerve, delivers mild electrical pulses designed to head off seizures. The device is supposed to reduce the frequency of epileptic seizures.

The size of Cyberonics’ generator unit, however, has changed since the first model was approved by the FDA in 1997.

Cyberonics CEO Daniel Moore keeps one of the company’s first models on his desk.

“People say it was the size of a hockey puck,” Moore says. “It wasn’t quite that big.”

Recent improvements in battery technology have allowed Cyberonics to shrink the devices it sells today to the size of a watch face, Moore says. And, like pacemaker manufacturers, Cyberonics has been working to make its Vagus Nerve Stimulation (VNS) Therapy system more responsive to individual needs. The company is also tapping the interactive potential of the units as collectors of data for patients and their physicians.

The latest round of technical improvements come as Cyberonics has largely recovered from a big setback a few years ago. The company hit a low point in May 2007, when Medicare said there wasn’t enough evidence to support use of the Cyberonics device for patients with treatment-resistant depression. The company saw its sales drop 8 percent the following year, before it regained its momentum in 2009, with renewed focus on epilepsy. Sales climbed about 15 percent last year to $218.5 million.

The Texas firm faced no clear competitors when it began developing its implantable units for epilepsy in the 1980s. It was a different situation than the one faced by Medtronic in 1958. Back then, the Minneapolis company’s portable, external cardiac pacemaker helped heat up a race to market the first pacemaker that could be implanted in the body—which Medtronic (NYSE: MDT) did in 1960.

The first task for Cyberonics was to persuade doctors and the FDA that its implantable VNS device had a place in the epilepsy treatment spectrum.

In the United States, nearly 3 million people have epilepsy, according to the Epilepsy Foundation, a non-profit patient support group. About half of those diagnosed can get seizure relief from the first drug prescribed, Moore says. If not, doctors try one medicine after another, alone or in combinations, to find a regimen that works. For two-thirds of patients, drugs will curb the disorder, Moore says. But that leaves a substantial population whose seizures aren’t fully controlled. Cyberonics estimates that about 400,000 people in the United States are candidates for its product.

The company’s VNS devices usually deliver a 30-second electrical pulse to the vagus nerve about every five minutes, but the timing and strength of the electrical burst is programmed by a doctor using a handheld computer. The National Institute of Neurological Disorders and Stroke estimates that the therapy reduces the frequency of seizures by an average of 20 to 40 percent. Patients with the device keep taking anti-epilepsy medication, but they may be able to reduce the dose.

In 1997, Cyberonics’ device was approved in the United States for people over the age of 12 who suffer from partial seizures that resist drug treatment. Partial seizures arise in a specific area of the brain, rather than across the whole brain.

The epilepsy device was generating more than $100 million in annual revenues by 2007. But that was a rocky year. Cyberonics had spent millions on R&D to prove that the VNS system could also be effective in depression that doesn’t respond to existing drugs, a potentially larger market than epilepsy. The FDA had approved the device in 2005 for people whose depression was resistant to drug therapy. But Medicare administrators decided in 2007 not to reimburse for the device after reviewing evidence on its benefits and patients’ needs.

At that point, Moore says, the company was losing more than $50 million a year and held $132.5 million in debt. Dissident Cyberonics shareholders, backed by activist investor Carl Icahn, pressured the company to replace three board members. Cyberonics then brought in Moore, a veteran executive from Boston Scientific, as its new CEO.

Moore refocused the company on expanding its epilepsy franchise in the United States and internationally. About 19 percent of sales now come from 70 countries worldwide. Cyberonics, with 570 employees, has been profitable since 2009. The company has paid off the $132.5 million in obligations that burdened it in 2007.

“That debt is gone,” Moore says.

Cyberonics has continued to run clinical trials in depression, and recently re-submitted its case for reimbursement to the Centers for Medicare & Medicaid Services (CMS).

Epilepsy, therefore, still accounts for most sales of the VNS device. Of the approximately 125,000 people newly diagnosed with epilepsy in the United States, about 15,000 to 24,000 are potential candidates for the Cyberonics product, Moore says. That gives the company room for expansion—it treats about 4,000 new U.S. patients a year.

Meanwhile, Cyberonics has been working on successive generations of its device to adapt the technology to individual patients’ needs. Although the VNS device can reduce seizures to some extent through a scheduled series of electrical bursts, an attack can begin between these intervals. Cyberonics provides a supplementary handheld magnet that patients can sweep over the implanted generator in their chests to initiate a pulse when they feel a seizure coming on.

Batteries in the devices are now smaller, and some units can turn themselves off between pulses to prolong battery life. The battery’s life span is important because the generator must be replaced by another surgery when the battery runs down. Batteries now last about three to eight years, depending on the pattern of use for the individual patient, Moore says.

The sixth generation VNS device, AspireSR, is now in development. It is designed to monitor the patient’s heart rate for signs that a seizure may be beginning, and fire off a pulse in response. Cyberonics is also working on a number of new features, including rechargeable batteries and a device called ProGuardian—an external heart rate monitor to alert patients or their caregivers of impending seizures. Another product in development called Relay would wirelessly transmit data about the patient to a doctor’s computer.

But meanwhile, competitors are also innovating. Cyberonics’ main competition comes from existing anti-epilepsy drugs and new medicines in development, according to its annual report. But rivals are also emerging among device makers. Seattle-based NeuroVista, for one, is developing a device that can provide advance warning to patients about an oncoming epileptic seizure, so they can find a safe place to lay down.

Cyberonics’ forerunner in neuromodulation, the medical device giant Medtronic, has tested its own device for epilepsy. Medtronic has been expanding the market for its Deep Brain Stimulation (DBS) Therapy, which is now FDA-approved for the treatment of Parkinson’s disease, essential tremor and other conditions. In 2010, Medtronic received clearance from regulators to sell the device in Europe, to treat adults with partial-onset seizures that drugs can’t fully control. An FDA panel recommended approval, with some conditions. But the U.S. regulatory agency asked Medtronic to conduct another pre-market study before giving it the green light to sell the device here. Medtronic is in discussions with the FDA on other routes to make the therapy available in the U.S.

Two other companies have gotten European regulatory clearance for their own vagus nerve stimulation devices: CerebralRx of Israel, and Neurotech , which was acquired in November by Sorin Group of Milan, Italy. In February, an FDA panel recommended approval of an anti-epilepsy device made by Mountain View, CA-based NeuroPace. Its RNS System consists of electrodes in the brain that detect abnormal electrical activity and respond with electrical impulses.

Three other companies are working on various non-invasive neuromodulation technologies to treat epilepsy, depression, or both—without implanting a device in the body. Two are US-based: NeuroSigma of Los Angeles, CA, and Neuronetics of Malvern, PA.

Cyberonics has an alliance with the third: CerboMed, a private company based in Erlangen, Germany. Its NEMOS t-VNS system, which includes an earplug-like device, is designed to stimulate a branch of the vagus nerve in the outer ear by sending a pulse through the skin. CerboMed’s device has received clearance for marketing in Europe for patients with epilepsy, depression, and pain. In September, Cyberonics said it had made an initial investment of about $2.6 million in Cerbomed and gained an exclusive option to market the NEMOS device worldwide as an epilepsy treatment.

That said, Cyberonics’ products still dominate the market in devices for epilepsy.

In December, as Cyberonics celebrated its 25th anniversary as a company, it announced that a total of 100,000 of its VNS devices had been implanted.

Moore says the company’s turnaround since 2007 owed much to the progress the company had already made.

“It was possible because there were so many good people here, and a good product,” Moore says.

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One response to “Epilepsy Device Pioneer Cyberonics Still Evolving After 25 Years”

  1. calvord says:

    The VNS has evolved as a piece of junk. It is built by a corrupt organization, and generates many negative impacts, nothing else. Be careful not to fall into the trap of the greedy who will sacrifice their neighbors’ lives just earn a buck.