(Reuters) - Medical-device maker Cyberonics Inc said it could not get a partner for its brain stimulation treatment in the depression indication, sending its shares down as much as 10 percent.
In February, Cyberonics said it was seeking a partner to help its vagus nerve stimulation (VNS) therapy device gain acceptance from Medicare for reimbursement and maintain approval in the depression indication.
The VNS therapy system, whose primary use has been to control epileptic seizures, was approved for severe treatment-resistant depression in 2005.
However, the device did not get acceptance from the Centers for Medicare & Medicaid Services for reimbursement in this indication.
The two post-market clinical programs mandated by the U.S. Food and Drug Administration for the depression indication are expected to cost $3.5 million to $4 million for the second half of 2009.
In a statement on Wednesday, Cyberonics said it is evaluating alternative actions to maintain the current regulatory approval and will not begin another clinical study related to the depression indication without a partner.
Shares of the Houston, Texas-based company were trading down $1.22 at $15.78 late Wednesday morning on Nasdaq. They touched a low of $15.30 earlier in the session.
Reporting by Suzannah Benjamin in Bangalore; Editing by Amitha Rajan