Cyberonics Up Up on Ala. BlueCross Policy
Thursday March 16, 2:26 pm ET
Cyberonics Rises As Alabama BlueCross BlueShield Backs Coverage
NEW YORK (AP) -- Shares of Cyberonics Inc. rose Thursday, after Alabama BlueCross BlueShield released a policy draft that recommends coverage for the company's device that treats resistant-depression.
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The stock has bounced back after hitting a 52-week low a day earlier.
Shares of Cyberonics rose $2.27, or 9.1 percent, to $27.17 in early afternoon trading on the Nasdaq Stock Market. Thursday's strongest level, on heavy volume, was $27.35.
On a 52-week basis, there was a low of $24.26 on Wednesday and a high of $47.77 on June 24.
Cyberonics is a Houston-based developer and marketer of medical devices for the long-term treatment of epilepsy and other chronic neurological disorders using vagus nerve stimulation. That's a process delivered by the company's VNS Therapy System product, an implantable generator similar to a cardiac pacemaker.
The VNS was approved by the Food and Drug Administration more than a year ago, and Alabama's coverage proposal is the first indication a name-brand insurer might reimburse the treatment, Piper Jaffray analyst Thomas Gunderson said.
Approval for reimbursement among insurance providers can take two to three years after a treatment is approved, Gunderson said. However, one approval can act as a bellwether.
The VNS product, also approved to treat epilepsy, is a stopwatch-size gadget that is implanted in the chest and delivers pulses of electricity to the left vagus nerve in the neck, which some physicians believe may be connected to mood centers in the brain.
Cyberonics shares had been under pressure recently as the company came under U.S. Senate Finance Committee scrutiny. The committee's chairman, Sen. Charles Grassley, R-Iowa, has questioned the FDA's approval of its VNS device over the objection of 20 agency scientists. A representative from Grassley's office wasn't immediately available to comment Thursday morning.
Jaffray's Gunderson didn't see Alabama's draft policy as having any influence over the Finance Committee's concerns.
Gunderson doesn't own any Cyberonics stock, but his firm does make a market in its securities. |
