A Medtronic Inc. (MDT) brain-stimulation device showed mounting benefits over time by leading to fewer seizure episodes for epilepsy patients, according to long-term results from a company-funded study examining the technology.

The "deep-brain stimulation" system, which is targeted at patients who have repeatedly failed drug treatments, could reach the U.S. market in mid-2010. That would make Medtronic Inc. (MDT) a competitor to smaller Cyberonics Inc. (CYBX).

Medtronic submitted an application to the Food and Drug Administration in June seeking approval to market its system for epilepsy backed by data released a year ago. The company is still awaiting an FDA answer, and longer-term data from the same study, released Sunday at the American Epilepsy Society's annual meeting in Boston, could bolster the case with regulators and doctors.

A short-term benefit "would not be so useful for a procedure that involved surgery and putting wires into the brain," said Robert Fisher, director of the Stanford Epilepsy Center in California and lead investigator on the "Sante" study.

Fisher does not have a financial relationship with Medtronic.

The FDA recently delayed a planned November panel review for the company's system, and that review likely won't happen until early next year, William A. Hawkins, Medtronic's chief executive, said during a recent earnings call. Medtronic still sees potential to reach the market mid-year, however.

The study included 110 patients who had epilepsy for a long time and weren't helped by at least three drugs. They were all implanted with a pacemaker-like device that sits in the chest and sends pulses to the brain by wires, but only half received power for the first three months.

Patients receiving therapy showed benefits in terms of fewer seizures compared with patients who had devices switched off. Devices were turned on for all patients after this initial period, and longer-term data showed a median 41% reduction at one year, 56% at two years and 68% at three years, Medtronic said.

At the time of data analysis, 102 patients had completed two years of therapy and 57 had competed three years, Medtronic said. All patients continued to be managed with drugs.

This therapy carries potential for complications such as infections around the power generator. Most of these complications happened early, and "we haven't seen a signal of long-term side effects that have emerged in years two and three after the initial implantation," Fisher said.

Device-based epilepsy treatment is a relatively small market so far, with Cyberonics, which has essentially owned that market for the last decade, aiming for sales of $159 million to $162 million in its current fiscal year. Cyberonics sees benefits from having a heavyweight like Medtronic helping to expand the market.

"Having an additional player out there, a major credible player like Medtronic out talking about neuromodulation for patients with epilepsy, could be helpful," Daniel J. Moore, Cyberonics' president and chief executive, said in an interview Friday.

He also believes Cyberonics' less-invasive system, which hooks up to a major nerve in the neck, will be viewed as something to try before doctors turn to brain surgery.

For Medtronic, epilepsy represents potential expansion for a neuromodulation business that is helping offset slowed growth in bigger cardiology markets. The neuromodulation business, where treating Parkinson's disease is a key market, posted sales of $1.43 billion in Medtronic's last fiscal year, representing about 10% of total sales.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com
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