UPDATE 1-Medtronic brain device for OCD approved in Europe

* Approval is first in Europe for a psychiatric disorder

* Medtronic also studying device for severe depression

CHICAGO, July 14 (Reuters) - Medtronic Inc (MDT.N) said on Tuesday it received regulatory approval in Europe for an implantable brain stimulator to treat patients with severe obsessive-compulsive disorder.

The Minneapolis-based company said the approval marks the first time a deep brain stimulation device has gained CE Mark approval for treatment of a psychiatric disorder.

The battery-powered device, implanted near the collar bone or abdomen and connected by wire to electrodes placed in the brain, received U.S. approval in February through a humanitarian device exemption. The designation allows treatment of a condition affecting fewer than 4,000 people a year.

OCD is an anxiety disorder characterized by constant upsetting thoughts that cause a patient to perform an action repeatedly in an attempt to dispel them.

Medtronic said the neurostimulators used for its Reclaim Deep Brain Stimulation Therapy are the same used to treat common movement disorders such as Parkinson's disease and dystonia. Similar to a pacemaker, the device delivers electrical pulses to targeted areas of the brain.

But the device will use a unique lead, or wire, because the area of the brain targeted for OCD is different.

Medtronic also said it plans to conduct a post-market study of the therapy at a minimum of eight sites in Europe.

Previous research into DBS therapy for OCD, recently published in the journal Molecular Psychiatry, showed reduction of symptoms and functional improvement in about two-thirds of patients. A majority moved from a severe OCD rating to a mild or moderate rating after device implantation, Medtronic said.

Medtronic said it is also studying Reclaim DBS therapy in treatment-resistant depression. (Reporting by Susan Kelly; editing by Andre Grenon)