The FDA has approved devicemaker Cyberonics Vagus Nerve Stimulation (VNS) Therapy System for the treatment of chronic depression in adult patients who have failed to respond to all other treatments.

The stopwatch-sized device is implanted in the chest and sends impulses to the brain through the vagus nerve in the neck. The impulses are thought to alter the chemical transmitters that carry messages between nerve cells involved in regulating mood. The device was originally designed to treat epilepsy, for which it is currently marketed for in the U.S.

Upon market release, the device would carry the strongest warning possible -- a so-called black box -- cautioning patients that the device is permanent. As part of the approval, Cyberonics is required to conduct a 450-patient postmarket dosing study and a 1,000-patient, five-year outcome registry. The company believes it has the potential to do $300 million in revenue in the first four quarters after launch.