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Cyberonics Inc. Message Board

  • elstockjock elstockjock Jan 9, 2013 12:20 AM Flag

    Remember

    A few things worry me about this company. The device is very expensive and most patients with epilepsy are on Medicare or Medicade and reimbursment to the hospital and the physician is marginal at best. Most can't and won't pay 15-20K (device+physician+hospital) out of pocket. For those who have private insurance (HMO or whatever) this is exactly the sort of high ticket item they will try and deny coverage for. The device is not curative of seizures, only paliative (1/3 have 50% reduction in seizure frequency, 1/3 have some less well defined benefit, 1/3 have no benefit according to the studies), and has some significant side effects. All patients experience hoarsness and some have pain while the device is stimulating. Some patients, particularly young ones, don't like a scar on the neck and a relatively thick lump under the chest from the device. Tha battery life is 3-5 years, how many patients will want multiple surgery. Also, who does the company expect to place these devices. At their first educational symposium in Colorado Springs after FDA approval they invited moslty neurologist who treat patients with epilepsy (there are relatively many of these) who can't do surgery, and only a few neurosurgeons with an interest and expertice in epilepsy surgery (very few of these guys). I guess they are hoping that general surgeons and private "general" neurosurgeons will implant these things at the request of the neurologists, but I don't think it is going to work that way. The reimbursement for the surgeon is relatively small (about 1K) and these are high maintenance patients which most of these surgeons have traditionally avoided to refer to specialized centers. So most of these devices will be placed in special Epilepsy Surgery Centers (which if you ask the experts they would advocate the use of this device only by experiences epilepsy doctors) and there are maybe 60 such places in the country. I bet if you check with the busiest centers such as the Cleveland Clinic or the one in Minnesota you will find they are anticipating putting in 20 to 40 a year or less. Most centers are not nearly as busy. If they sell 1200 a year I would be impressed. At a unit price of 9000 can the company survive on 10 mil of revinue a year? The device has its role in some select epilepsy patients, not in vast numbers of them. I like the device and hope to be able to keep using it in the future. My hope is they are bought out by some larger medical devices company such as Metronics. Maybe they will find a use for the device that has a larger potential market in people who will want to and will be able to pay for it. The running joke in Colorado Springs was that this device can improve your golf score - if only it did. Now if you want a biotech company with good long term prospects check GLIA.

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    • Dear "Remember"- You lost me on your 2nd sentence when you said that most of their patients are on Medicare and Medicaid. You obvously are not as knowledgable on the company as you profess to be. Approximately 60% of their patients are commercial managed care patients and the average patient age is 31 years old. Hardly Medicare aged!

      • 1 Reply to healthguy67
      • If you watch the video of Dan Moore, the CEO, on Fox news from January 10, 2013 he states that "most patients that use our devices are covered by Medicare" (at 5:37 in video). I am confused by this as I had thought that the patient profile was as you said, 31 years old, not medicare aged.

        video can be found by googling "Medical Device Tax: Cyberonics CEO Dan Moore on levy"

    • Sds like you are talking your book. -----Why hasn't this laundry list of "problems" not come to light earlier and why the long run for the stock? (np-----held it for a run sev yrs ago)

 
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