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 News Release - May 7, 2007

CMS Issues Decision for VNS Therapy in Treatment-Resistant Depression

HOUSTON, May 7 (HSMN NewsFeed) -- Cyberonics, Inc. (Nasdaq: CYBX ) announced that the Centers for Medicare and Medicaid Services (CMS) has confirmed its preliminary determination not to provide national coverage for Vagus Nerve Stimulation (VNS) Therapy as a treatment for Medicare beneficiaries suffering from treatment-resistant depression (TRD). Cyberonics continues to believe in the unique value of VNS Therapy for patients with TRD and is disappointed that Medicare beneficiaries whose lives have been compromised by TRD do not yet have broad access to this treatment option.

During the two public comment periods, more than 98% of the 2,732 comments received were in favor of coverage of VNS for patients with TRD. We want to thank the many patients, potential patients, physicians, organizations and others who took the time to comment. Cyberonics will continue to support psychiatrists and patients who are pursuing coverage of this treatment. As we evaluate all the options available to optimize access of VNS Therapy in TRD, we intend to work with CMS and other interested parties to understand the additional evidence they desire to extend coverage. The body of evidence supporting VNS Therapy in TRD continues to grow, and we plan to share that evidence with CMS, as well as with other payers, as it becomes available.

Since the approval of VNS Therapy for TRD, over 300 payers have provided coverage for more than 3,000 patients on a case-by-case basis. The use of VNS Therapy for depression is also approved in European Union Countries and Canada.

ABOUT VNS THERAPY AND CYBERONICS

Information on Cyberonics, Inc. and VNS Therapy(TM) is available at http://www.cyberonics.com and http://www.vnstherapy.com .

SAFE HARBOR STATEMENT

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These statements can be identified by the use of forward-looking terminology, including "may," "believe," "will," "expect," "anticipate," "estimate," "plan," "intend," and "forecast," or other similar words. Statements contained in this press release are based upon information presently available to Cyberonics (the "Company") and assumptions that the Company believes to be reasonable. The Company is not assuming any duty to update this information should those facts change or should we no longer believe the assumptions to be reasonable. Investors are cautioned that all such statements involve risks and uncertainties, including without limitation, statements concerning growing the body of evidence supporting VNS Therapy in TRD and sharing that evidence with CMS and other payers and supporting patients and psychiatrists in their pursuit of coverage. The Company's actual decisions, performance and results may differ materially. Important factors that may cause actual results to differ include, but are not limited to: continued market acceptance of VNS Therapy and sales of the Company's product; the development and satisfactory completion of clinical trials and/or market test and/or regulatory approval of VNS Therapy for the treatment of Alzheimer's disease, anxiety, or other indications; adverse changes in coverage or reimbursement amounts by third- parties; intellectual property protection and potential infringement claims; maintaining compliance with government regulations and obtaining necessary government approvals for new applications; product liability claims and potential litigation; reliance on single suppliers and manufacturers for certain components; the accuracy of management's estimates of future expenses and sales; the results of the previously disclosed governmental inquiries; the impact of restatement of the Company's financial statements or other actions that might be taken or required as a result of such inquiries or the review by the Audit Committee of the Company's Board of Directors of the Company's stock option grants, procedures, and practices, including a default under credit facilities or debt instruments; the potential identification of new material weaknesses in the Company's internal controls over financial reporting; risks and costs associated with such inquiries or review and any litigation relating thereto or to the Company's stock option grants, procedures, and practices (including the previously disclosed private litigation); uncertainties associated with stockholder litigation and other risks detailed from time to time in the Company's filings with the SEC. For a detailed discussion of these and other cautionary statements, please refer to the Company's most recent filings with the SEC, including its Form 10-K for the fiscal year ended April 28, 2006 and its Form 10-Q for the period ended January 26, 2007.


Source: Cyberonics

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