Medical Device Daily Associate

Advanced Neuromodulation Systems (ANS; Plano, Texas) reported that it has received an Investigational Device Exemption (IDE) approval from the FDA to implant 160 patients at 12 sites to investigate the safety and efficacy of its Libra Deep Brain Stimulation (DBS) System to treat es-sential tremor.

The company said it has identified a number of sites for the clinical study, with the first implants of the Libra implantable pulse generator (IPG) system anticipated to occur in 2Q05.

The company also said it has submitted an amendment of its IDE application to the FDA to investigate use of the Libra system to treat Parkinson's disease. ANS said it anticipates receiving the second IDE approval from the FDA sometime in 2Q05.

"This approval represents a major milestone for ANS," said Chris Chavez, president and CEO. "Historically, we have focused on neurostimulation to treat chronic pain, and we intend to continue to grow that core franchise."

However, he noted that with this approval, "we now have the opportunity to move into the deep brain stimulation arena. DBS presents numerous new growth opportunities for our platform technologies to address various neurological conditions."

Chavez also pointed out that the company has been working on its DBS project "for a long time, and it is exciting and satisfying to see it coming to fruition."

Estimates of the prevalence of these two conditions vary significantly, ANS said, but it is generally estimated that about 5 million people in the U.S. alone suffer from essential tremor, and another 1.9 million suffer from Parkinson's disease.

The company said an independent market research firm estimates that the market for DBS for these indications will grow to about $180 million by 2008 and will continue to grow as improvements in the procedure and stereotactic targeting are made.

"The neuromodulation market as a whole is expected to surpass the billion-dollar milestone this year, and promises to become a multibillion dollar, multi-indication segment of the medical device industry," ANS said in a statement. "We are aggressively investing in both product development and clinical trials to leverage our platform technologies into emerging clinical applications for neuromodulation, applications that we believe will fuel strong organic growth for years to come."

In addition to essential tremor and Parkinson's disease, Chavez said the company is "systematically incubating such promising new indications" as migraine, depression, pelvic pain, obesity, tinnitus and traumatic brain injury.

Earlier this month, the company reported what it termed as "promising results" in the use of DBS for the treatment of depression (Medical Device Daily, March 7, 2005).

An independent research paper in the neuroscience journal Neuron reported "a striking and sustained remission of depression in four of six patients." ANS acquired the exclusive rights to this intellectual property over a year ago, it said.

Despite the encouraging results reported in the Neuron article, there were noted limitations to this first study of deep brain stimulation for treatment-resistant depression. Sample size was small, follow-up was limited and no sham surgery or systematic placebo control arm was used. There also were limitations on identifying markers that might predict response. Differences in electrode targeting and placement may have also contributed to the observed response variance. The mechanisms of action of DBS are incompletely understood.

While the depression results and the IDE approval and submission are encouraging, the company and some of its officers, including Chavez, are still entangled in various legal matters including several lawsuits brought by disgruntled shareholders after the stock's value took a dramatic tumble.

One complaint alleges that the company violated federal securities laws by issuing false or misleading public statements and that during the class period ANS was engaged in unethical marketing involving payment to "certain physicians" for implanting the company's products in patients.

On Feb. 17, the company disclosed that it had received a subpoena from the inspector general in the Department of Health and Human Services, "requesting documents related to the company's sales and marketing, reimbursement, Medicare and Medicaid billing, and certain other business practices."

With the news, the company's stock fell from a close of $37.60 a share on Feb. 16 to $29.37 on Feb. 17.

A similar class action was filed against ANS, Chavez and Executive Vice President-Finance F. Robert Merrill III, for the same period, making substantially the same charges. It alleges that ANS "paid certain physicians a $1,000 incentive for each device implanted in patients," and that the company's relationship with its physicians "was based upon improper payments and not growing market acceptance of its products."

Additionally, the company is lagging behind its competitor Cyberonics (Houston) in getting an approval in the U.S. for the potentially lucrative depression indication.

That company received an "approvable" letter from the FDA in February for use of its Vagus Nerve Stimulation system in the treatment of recurrent treatment-resistant depression (MDD, Feb. 4, 2005).

ANS had attempted to buy Cyberonics in the wake of that company's August 2004 rejection by the FDA of use of the VNS system for treatment of TRD, buying just under 15% of the company's shares. However, Cyberonics repeatedly rejected its rival's advances, and ANS finally withdrew the offer last October.