Update 06/10/19- ReWalk Robotics stock soars after receiving FDA clearance for its exosuit- https://finance.yahoo.com/video/rewalk-robotics-stock-soars-receiving-203711186.html
ReWalk Robotics, Ltd. (NASDAQ: RWLK) develops, manufactures and markets wearable robotic exoskeletons for individuals with lower limb disabilities as a result of spinal cord injury or stroke. The Company’s mission is to fundamentally change the quality of life for individuals with lower limb disability through the creation and development of market leading robotic technologies. Founded in 2001, ReWalk has headquarters in the United States, Israel, and Germany
On 26th March 2019, the company announced the delivery of a ReWalk Personal 6.0 System to Lucy Dodd, a British children’s social care worker paralyzed by a rare spinal condition, which will allow her to stand and walk again. The ReWalk exoskeleton—a medical device designed for individuals with spinal cord injury to be used in the home and the community—is in use throughout the UK and around the world. Lucy Dodd will begin rehabilitation training after national fundraising campaign with support from the Association for the Independence of Disabled People.
On Feb 13th, 2019, the company announced that Cigna Corporation, a leading global health service company, has revised its policy regarding coverage of exoskeleton medical devices for persons with spinal cord injury (SCI). Cigna, which previously had a non-coverage policy, will now review submissions from beneficiaries on a case-by-case basis to consider providing coverage based on medical criteria. This policy revision is the first of its kind by a major private insurer for individuals eligible to use exoskeleton devices. While the policy change has already taken effect, the formal policy change will be updated in Cigna’s next revision cycle, expected to be published in or around Q3 2019.
Recent Financial Closure: On Feb. 25, 2019, ReWalk Robotics Announced the closing and funding of its previously announced public offering of 19,000,000 ordinary shares at a price to the public of $0.23 per share. The gross proceeds of from the offering, before deducting placement agent fees and offering expenses, are $4.37 million. ReWalk intends to use the net proceeds from the offering for (i) sales, marketing and reimbursement expenses related to market development activities and broadening third-party payor coverage and (ii) research and development costs related to, in the shorter term, its ReStore™ exo-suit designed to assist patients who have had a stroke, and, in the longer term, expansion of the Company’s technological platform to address other medical indications affecting the ability to walk.
Before this, on Feb. 08, 2019, Rewalk announced its financial results for 2018. Highlights of and subsequent to the fourth quarter of 2018 include:
- Completed enrollment in the clinical study of the ReStore soft exo-suit for stroke patients:
- On track to file a 510(k) submission with the U.S. Food and Drug Administration (FDA) imminently;
- Applied for CE mark clearance for the ReStore; prelaunch activities underway for potential European commercialization in mid-2019;
- Total revenue for the fourth quarter of 2018 was $1.6 million, compared to $1.5 million in the prior year quarter;
- Sales for the fourth quarter of 2018 in Europe grew to $1.24 million driven primarily by the German national coverage code that was issued in June 2018;
- 19 units were placed during the fourth quarter of 2018;
- 12 positive coverage decisions of which nine were in Germany during the fourth quarter of 2018;
- 2018 gross margin improved to 43.2%, compared to 40.0% in 2017; and,
- Raised $13.1 million in gross proceeds from an equity offering in November 2018; repaid $3.6 million to Kreos Capital V (Expert Fund) Limited and deferred $3.9 million of 2018 and 2019 original loan payments into 2020-2021.
Management’ Outlook over the near to medium term:
We believe that 2019 is poised to be a significant year for ReWalk. I am excited by the momentum we are seeing in Europe for our SCI devices and the opportunity before us as we prepare to launch our second product, the ReStore for stroke patients. We plan to enter the stroke market with a unique lightweight product that fits into the existing reimbursement landscape, offering multiple treatment benefits for patients and a meaningful value proposition for clinics. We are excited to bring this ground-breaking technology to market and believe its unique value will support rapid adoption,” stated Larry Jasinski, Chief Executive Officer of ReWalk.
Planned Steps for Growth – Growing Current Business and Expanding to New Markets
ReWalk intends to grow the SCI, Rigid exoskeleton business through expanded coverage policies and develop new soft exosuit technologies through the Wyss partnership to address other lower limb disabilities and create a broad portfolio of solutions.
- The critical milestones for the forthcoming quarters are demonstrating sales growth from the German and VA policy accomplishments, establishing a U.S. commercial policy, completing the CE and FDA clearances, the launch of the ReStore stroke system and securing a distribution partner in China.
- ReWalk Robotics continues to focus on margin improvement, managing its overall burn rate to the lowest possible level, seeking to reduce its debt and maintaining adequate capital balance. The management is focussing on maintaining the necessary financial flexibility to execute its strategic goals without cost and time overruns.
Analyst ratings and target price:
Per www.marketbeat.com, Their average twelve-month price target is $2.00, suggesting that the stock has a possible upside of 825.50%. The high price target for RWLK is $2.00, and the low-price target for RWLK is $2.00.
Key highlights and unique differentiating factors of the company:
- Market leading global exoskeleton developer with two breakthrough device platforms
- Rigid ReWalk exoskeleton for spinal cord injury market
- FDA and CE mark clearance for both Personal and Rehabilitation use; a sixth-generation device
- Global commercial infrastructure with first mover advantage
- ReStore soft-suit exoskeleton for stroke rehabilitation
- First study underway in collaboration with Harvard University’s Wyss Institute
- CE submission completed Q4 2018; FDA submission planned for early 2019; EU and US launch anticipated Q3 2019
- The potential for other indications including multiple sclerosis and Parkinson’s disease
- Innovation through a research collaboration agreement with Wyss Institute at Harvard
- Proven insurance reimbursement success. Currently working with other groups in the US and Germany to secure broader coverage
- Extensive relationship with Department of Veterans Affairs, the single largest network of care for spinal cord injury (SCI) patients in the United States
ReWalk Overview – Market leading global developer of robotic therapy and mobility assistance solutions
Compelling Demand Drivers:
There remains a substantial market for the company’s ReWalk exoskeleton for SCI patients in the U.S. with a substantial backlog of demand, and the management remains committed to securing wider reimbursement coverage for these individuals. RWLK have continued to educate the U.S. payers, are gaining interest and anticipate some will begin to modify policies in the months ahead.
Moreover, the company is likely to see expanded independent third-party societal support for coverage as there are now three groups that have published consensus statements, advocating support for these products for the spinal cord injured community.
Financial Highlights: Third Quarter 2018 Financial Results (In thousands, except share and per share amounts)
- Total revenue was $1.6 million for the fourth quarter of 2018, compared to $1.5 million during the prior-year quarter. 19 ReWalk systems were placed during the fourth quarter of 2018, compared to 23 systems in the prior year period. Four systems were placed in the U.S. and 15 were placed in Europe.
- Gross margin was 38.9% during the fourth quarter of 2018, compared to 39.8% in the fourth quarter of 2017, primarily attributable to a one-time inventory write-off. The full year 2018 gross margin was 43.2%, compared to 40.0% in 2017, reflecting our commitment to managing our operations.
- Total operating expenses in the fourth quarter of 2018 were $4.6 million, compared to $6.2 million in the prior year period. Total operating expenses for the full year 2018 were $22.0 million, compared to $25.1 million in 2017.
- Operating cash flow usage was reduced to $14.8 million in 2018, compared to $22.5 million in 2017, primarily due to working capital improvements and reduced operating expenses.
- Net loss was $5.0 million for the fourth quarter of 2018, compared to a net loss of $6.2 million in the fourth quarter of 2017. 2018 net loss was $21.7 million, compared to 2017 net loss of $24.7 million.
Liquidity: As of December 31, 2018, ReWalk had $9.5 million in cash on its balance sheet and $8.7 million in short- and long-term debt.
Key risk factors and potential stock drivers:
- Failure to identify changing trends and industry preference is an important factor which has a bearing on the company’ performance over the medium to longer term.
- The company needs incremental capital to expand, achieve revenue targets. Therefore, management’ ability to improve RWLK’ cash flow profile as the company goes forward would continue to remain a critical stock sensitivity factor.
- Company’ ability to demonstrate strong financial performance despite competitive pressures
- Although RWLK has seen progress in Germany, the company did not achieve its anticipated results in the U.S. In the fourth quarter of 2018; reimbursement remains a challenge as it continues to work on securing broader coverage for ReWalk devices.
- Therefore, weaker than expected revenue growth and or profitability could also impinge the stock performance over the near to medium term.
A Reverse split has changed the numbers below-
- On Friday, April 29th, 2019, RWLK closed at $0.2156, with an average volume of 6.67 million shares exchanging hands. Market capitalization is $19.877 million. The current RSI is 42.57
- In the past 52 weeks, shares of RWLK have traded as low as $0.1610 and as high as $1.35
- At $0.2156, shares of RWLK are trading below its 50-day moving average (MA) at $0.26 and below its 200-day moving average (MA) at $0.60
- The present support and resistance levels for the stock are at $0.19 & $0.24 respectively.
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