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 Nov. 20, 2018, ReWalk Robotics Announces Closing of $12.1 Million Public Offering. ReWalk will receive aggregate gross proceeds of approximately $12.1 million from the offering. 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, (ii) research and development costs related to developing its lightweight “soft suit” exoskeleton technology for various lower limb disabilities, including stroke and other indications affecting the ability to walk, and (iii) the repayment of certain outstanding indebtedness and other related payments to Kreos Capital V (Expert Fund) Limited ($3.6 million in total, including principal, prepayment costs and “end of loan” payments).
Before this, on Nov. 08, 2018, Rewalk announced its financial results for the three and nine months ended September 30, 2018.
“ReWalk has made significant progress to advance our R&D efforts for ReStore and support reimbursement. Positive developments with insurance providers in both the U.S. and Germany suggest we should see increased coverage for the ReWalk exoskeleton for SCI patients as we end 2018 and head into 2019. We have applied for CE mark clearance; and, with our ReStore study enrolment near completion, we are on track to file with the FDA by year-end 2018 or early 2019, positioning us to potentially have a stroke product on the market in the U.S. in Q3 2019. We continue to explore all financing options available to the Company in order to ensure that we are able to execute our strategy and advance our important products for the SCI and stroke communities,” stated Larry Jasinski, Chief Executive Officer of ReWalk.
Highlights of and subsequent to the third quarter include:
- The recruitment requirements have been reached in the company’ multi-center trial of the Restore exo-suit, and the final participants will be completing the seven-session protocol in the coming days. – On track to file a submission with the Food and Drug Administration (FDA) by year-end or early 2019;
- Applied for CE mark clearance for the ReStore;
- Placed 500th ReWalk Personal and Rehabilitation system;
- Total revenue for the third quarter of 2018 was $1.6 million compared to $1.7 million in the prior year quarter;
- 22 units were placed during the third quarter of 2018;
- Nine positive coverage decisions in Germany during the third quarter of 2018; and,
- Gross margin improved to 47% during the third quarter of 2018.
Planned Steps for Growth – Growing Current Business and Expanding to New Markets
ReWalk plans 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 key milestones for the next nine months 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 900.00%. The high price target for RWLK is $3.00, and the low-price target for RWLK is $1.00. There are currently one sell rating and three buy ratings for the stock, resulting in a consensus rating of “Buy.”
Key highlights 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
- 500 systems placed, with the majority for home and community use; other systems used in rehab centers
- 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
Financial Highlights: Third Quarter 2018 Financial Results (In thousands, except share and per share amounts)
- Total revenue was $1.6 million for the third quarter of 2018, compared to $1.8 million in the second quarter of 2018 and $1.7 million during the prior-year quarter. 22 ReWalk systems were placed during the third quarter of 2018, compared to 21 ReWalk systems placed in the prior quarter and 16 systems in the prior year period. Eleven systems were placed in the U.S., nine were placed in the direct markets in Europe, and an additional two were placed in other markets.
- Gross margin improved to 47% during the third quarter of 2018 compared to 41% in the third quarter of 2017, primarily attributable to sales mix and lower product costs.
- Total operating expenses in the third quarter of 2018 were $4.9 million compared to $6.1 million in the prior year period.
- Net loss was $4.5 million for the third quarter of 2018 compared to a net loss of $5.8 million in the third quarter of 2017. Non-GAAP net loss for the third quarter was $3.8 million compared with a non-GAAP net loss of $4.8 million in the third quarter of 2017.
- Liquidity: As of September 30, 2018, ReWalk had $5.2 million in cash on its balance sheet.
Guidance: The Company is updating its full-year 2018 revenue guidance and now expects revenues to reach between $7 million and $8 million.
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
- Weaker than expected revenue growth and or profitability could also impinge the stock performance over the near to medium term.
- On Tuesday, Dec 11th, 2018, RWLK was at $0.21, with volume of 5 million shares exchanging hands. Market capitalization is $10.986 million. The current RSI is 15.96
- In the past 52 weeks, shares of RWLK have traded as low as $0.1920 and as high as $1.35
- At $0.21, shares of RWLK are trading below its 50-day moving average (MA) at $0.58 and below its 200-day moving average (MA) at $0.92
- The present support and resistance levels for the stock are at $0.20 & $0.21 respectively.