Cyberonics (CYBX - NASDAQ), the troubled medical device manufacturer that produces implantable medical devices that treat epilepsy announced the hiring of Daniel J. Moore, a senior marketing executive from Boston Scientific to be the company's new CEO. Moore will replace interim CEO, Reese S. Terry, Jr. who will return to his position on the board of directors.
Cyberonics going back to June of last summer found itself embroiled in the growing options backdating scandal. Many of the firm's top executives over time were forced to leave. The last major executives, the company's CEO (Robert Cummins) and CFO (Pamela Westbrook) resigned last November after an internal investigation found that unnamed insiders had incorrectly reported the dates of company stock options. While these problems were going on, the company after initial approval from the FDA for Medicare reimbursement had a major setback on the use of its newest implant device designed to assist people with severe depression. The FDA reversed its decision to allow the product to receive Medicare reimbursement. The reversal, plus the options backdating scandal was taking place around the same time that activist investor, Carl Icahn became involved. In September of 06' activist shareholders insisted it was time to change some of Cyberonic's board. After the company initially fought the request, in January activists succeeded in getting three of their own on to the board.
During this entire time period the company's stock has been on a roller coaster primarily in a downward direction. The latest appointment of Daniel J. Moore is just what the doctor ordered. There is a chance that Moore with his marketing background and understanding of the medical device business is just the kind of executive needed to help right the ship.
Investors need to stay tuned and watch what moves Moore and the company's board make over the next few months.