Cyberonics On Its Own
Having rejected a bid by Medtronic, Cyberonics believes its epilepsy business is the basis for much bigger opportunities. Cyberonics holds key method patents on a device for vagus nerve stimulation, which it refers to as an "implantable pacemaker for the brain." It believes the technology has far-reaching clinical applications for neurological disorders traditionally treated by drugs. A body of literature demonstrates the product's efficacy and ease of use in selected epilepsy patients. The product has been FDA approved and on the market since 1997. However, Cyberonics has yet to prove its device will work in broader applications like depression, which have larger markets but also significant competition from drugs.
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The rise of interest in neurostimulation and neuromodulation approaches is leading venture capitalists and large medical device companies to develop devices to prevent or block seizures. The devices would be used primarily on patients who don't respond to drugs for epilepsy.
According to Medtech Insight’s recently published report, US Markets for Neurostimulation Products, the frontier for neural stimulation is expanding rapidly, representing a $628 million market in 2006 that is forecast to grow by over 20% each year to produce sales approaching $2 billion in 2012. Topics discussed include implantable pulse generators, device reimbursement, and current and emerging applications for neurostimulation.
According to "Opportunities in Global Medical Devices and Diagnostics," a report recently published by Health Research International that forecasts growth rates in seven major clinical segments and 20 major technology segments, neuromodulation will experience the highest growth rate of all the top-tier segments over the next five years, in excess of 18%. The neuromodulation segment posted sales of approximately $1.7 billion in 2005 and will be worth almost $4 billion in 2010, HRI predicts.