HEARING IMPLANT OK'D : DEVICE ABLE TO BYPASS EAR DAMAGE.

Byline: Dawn Yoshitake Daily News Staff Writer

Advanced Bionics Corp. has received approval to market its implantable hearing device to Americans who have gone deaf.

The Sylmar-based manufacturer got the green light from the U.S. Food and Drug Administration to sell its Clarion cochlear implant to adults who have lost their hearing - estimated to number 2 million.

``This technology is so good that we'll be able to eliminate deafness,'' company President Jeffrey Greiner said Tuesday.

During a five-year clinical trial, Advanced Bionics tested the device's effectiveness on 148 patients at 25 centers nationwide.

And although the company can promote the Clarion implant to patients who have lost their hearing, the device has not been approved for marketing to patients who were born without the ability to hear.

The Clarion bypasses damaged parts of the inner ear and stimulates the auditory nerve, whereas hearing aids amplify sound and tend to be used by the hearing impaired, Greiner said.

To use the Clarion, patients have an external headpiece microphone set above the ear. A cable runs from the microphone to an external microprocessor - the size of a cigarette box - placed beneath the patient's clothes.

Sound is processed in the microprocessor and turned into electrical signals that travel back up the cable to the headpiece. Using a magnetic force, the headpiece rests against the skin above the ear, where a small receiver has been implanted against the skull. The electric signals pass through the receiver and down a collection of wires, half the width of human hair, into the inner ear.

The electrode wires then stimulate the auditory nerve, which carries signals to the brain for interpreting sound.

The cost of the device and surgery runs $30,000 to $35,000.

Most insurance companies will pay for the operation and device, though industry officials pointed out that a number of hearing-impaired people are not employed or work for companies that do not offer medical coverage.

Advanced Bionics hopes to sell roughly 600 of the devices in the first year.

``We don't have positive cash flow yet,'' Greiner said. ``It takes tremendous infrastructure to design, develop and produce this product. . . . We hope by this time next year we will be in a positive cash flow.''

He added that the privately held company is considering a public offering next year to raise capital for expansion. The company already has increased its manufacturing capacity over the past year and plans to increase its work force of 150.

Advanced Bionics faces an established competitor in Cochlear Corp. of Englewood, Colo., which acquired 3M's cochlear division in 1989. Med-EL Co. of Austria is set to begin its cochlear implant clinical trials in six months.

``We're different in that our chip for the implantable products is much faster and more flexible than the other commercially available devices,'' Greiner said.

But Ron West, president of Cochlear Corp., said his firm's implantable device has received higher performance ratings when tested by regulators.

Dr. William Luxford, an associate at the House Ear Clinic in Los Angeles, has used cochlear implants in clinical trials since the 1980s. He gave the two devices similar ratings.

``There is not a distinct advantage of one system over the other,'' Luxford said. ``But as time goes on, it may tell if there are distinct benefits.''

West said his company has sold 15,000 implants worldwide since 1985 and is shipping about 3,000 devices a year.

He welcomed the competition.

``We hope the additional competitors will grow the industry at a faster rate,'' West said. ``It's a small market that can support three or four competitors.''

The implantable devices, however, are not without controversy. Associations that serve the deaf have historically opposed using the devices in children.

``The organization believes in individual choice. We believe strongly in empowering the deaf by giving them information to make their own decisions,'' said a spokeswoman for the Greater Los Angeles Council on Deafness Inc.

``There is not enough research to substantiate the benefits of cochlear implants in children. So we strongly recommend people speak to a variety of people in addition to their doctor.''

Douglas Lynch, a founder of the Autoimmune Inner Ear Disease Association, is one implant user who is pleased with the results.

Lynch, who began to lose his hearing in 1992, went against his doctor's suggestion and underwent an implant operation.

``He said he doubted it would work and he had heard I would likely only recover environmental noise,'' Lynch recalled.

But following the operation last August, Lynch received more than muffled sounds.

``After the audiologist turned on the microphone, my wife's first words were, `Can you hear me?' I said, `You bet I can, and we both cried,' '' said Lynch, who last month joined Advanced Bionics as a marketing communications manager.

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Photo: (color) Douglas Lynch, marketing communications mana ger for Advanced Bionics Corp., goes over promotional materials with company President Jeffrey Greiner. For hearing, Lynch relies on an implanted electrical transmitter made by his company.

Hans Gutknecht/Daily News