Cyberonics, which makes a controversial implantable device to treat depression, is cutting 15 percent of its workforce and named Dan Moore, a former Boston Scientific international distribution manager, as its new ceo.

He succeeds Reese Terry Jr., a co-founder who served as interim ceo since November, when Cyberonics CEO Robert “Skip” Cummins and CFO Pam Westbrook resigned amid a stock options accounting scandal.

Cyberonics’ device, which is implanted in the chest and sends signals to the brain through the Vagus nerve of the neck, was originally approved for epilepsy patients and in July 2005 gained approval as a treatment for severe, chronic depression.

But the Centers for Medicare and Medicaid refused to cover the depression indication, citing a lack of scientific evidence that the treatment works, and private health insurers so far are paying for the device on a case-by-case basis only.

The job cuts are expected to produce savings of more than $12 million a year starting in fiscal 2008, which ends next April.

The job cuts press release;
The Dan Moore press release;
The Medicare denial.[tags]Cyberonics, Depression[/tags]