By far, the big percentage gainer today was Cyberonics
Essentially, the company's VNS Therapy System, which can be administered during a one-hour outpatient surgery, involves an implantable medical device consisting of a pacemaker-like generator and a nerve-stimulation electrode that delivers mild electrical signals to the vagus nerve in the left side of the neck. If approved, it will be the first long-term treatment for patients with treatment-resistant depression (TRD).
Four million Americans suffer specifically from TRD. These people are often isolated, hopeless, desperate, and unemployed. They are frequent visitors to emergency rooms and hospitals, and studies show that annual health-care costs for patients with TRD exceed $40,000 per patient. That is a big market where treatment costs are clearly very high.
Getting FDA approval may nonetheless be tough. According to a Reuter's report, there were a number of "data problems," but the need to help these patients carried the day. It helps, certainly, that the device is already approved by the FDA to treat epilepsy.
What might surprise you is that the TRD market is believed to be at least 10 times that of the epilepsy market. If so, Cyberonics has a $1 billion device on its hands. The stock, meanwhile, trades at 23 times estimated 2005 earnings. Although not cheap, it does not reflect the potentially explosive long-term sales growth for VNS Therapy.
Among those cheering today's news is Boston Scientific
Fool contributor W.D. Crotty is only depressed he owns Boston Scientific (which is hardly depressing) instead of Cyberonics.