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ReWalk Robotics Shows How Capital Markets Financing Can Change Lives

A U.S. Marine is struck by an enemy sniper’s bullet while on patrol. The injury leaves him paralyzed from the waist down-until he’s outfitted with a mechanical robotic exoskeleton that allows him to move independently once again.

If you think that scenario is lifted from the screenplay for a big budget science fiction movie, guess again-it’s what happened to Marine Captain Derek Herrera, who was left unable to walk after being hit by a sniper while serving in Afghanistan in June 2012.

But thanks to an innovative robotic walking support system developed by ReWalk Robotics, Herrera and hundreds of others like him with lower body paralysis are back on their feet.

“I see hope for the future,” Herrera says in an interview with the Boston Globe. “Mentally and emotionally it’s been inspiring and incredible.”

And now the company hopes to make that life-changing technology available on a wider basis.

ReWalk’s expansion plans got a boost with a fresh round of investment made possible by the company’s entry into the capital markets.

“The IPO was a very important step that has enabled ReWalk to continue to be the leader in creating a sizable new industry with the everyday community use of exoskeleton technologies. These funds have allowed us to build the supporting infrastructure to train, service, market and support reimbursement of the product which is driving our significant sales growth. In parallel, we are able to expand R&D to reach new applications for this unique technology.

As the IPO has allowed ReWalk to provide this life changing product to large numbers of paralyzed individuals – in parallel, it has created substantial well-paying jobs in many regions of the U.S. The IPO pathway is a key to sustained economic growth,” said CEO Larry Jasinski.

In September 2014, ReWalk took the next step forward by launching an initial public offering (IPO) that raised $38.7 million. That gives the Israeli company, with its U.S. headquarters in Marlborough, Massachusetts, access to capital that will drive expansion, job creation and even more innovation.

The positive response to the ReWalk IPO reflects the company’s growth potential as well as enthusiasm for a product that’s truly life-changing for its users.

“The person walks the system, the system does not walk them,” Dr. Amit Goffer, the ReWalk system’s inventor and himself a quadriplegic, tells the Military Times. “The users are in control – when they want to sit, they sit; when then want to stand and walk, they do so.”

The ReWalk exoskeleton, which is designed to mimic the natural gait of walking, attaches to the user’s legs and allows them mobility for standing, walking and sitting. Users wear a small backpack battery to power the system; a wristwatch-style device activates the exoskeleton.

The key to the ReWalk exoskeleton’s performance is the company’s patented “tilt sensor” technology, which senses shifts in the user’s body weight and center of gravity to initiate each movement. That allows for a more natural gait, speed and rhythm, the company says.

As of August 1, 2014, more than 400 users had been trained on the ReWalk system, according to the company’s filing with the Securities and Exchange Commission. That may sound like a modest number at first glance, but the potential market is much larger.

Consider the pool of potential ReWalk customers in the United States alone. According to the National Spinal Cord Injury Statistical Center, 273,000 people in the United States were living with a spinal cord injury in 2013, with about 12,000 new patients each year.

ReWalk estimates that perhaps 80 percent of these cases would be candidates for the company’s current or future products. The company also is looking toward adapting its technology to assist individuals with multiple sclerosis, stroke survivors, quadriplegics and cerebral palsy patients.

For those who have suffered spinal cord injuries, the gifts of greater mobility and independence are a given. But in its filing, ReWalk points toward the potential secondary health benefits of improved health and wellness for their users.

“These benefits include reducing pain and spasticity and improving bowel and urinary tract function, body and bone composition, metabolism and physical fitness, as well as reducing hospitalizations and dependence on medications,” the filing states. “Because of these secondary medical benefits, we believe that ReWalk has the ability to reduce the lifetime health care costs of individuals with spinal cord injuries.”

The exoskeleton is still an expensive product; a personal ReWalk unit retails for nearly $70,000 and is not currently covered by most insurance plans. But the company has recently inked agreements with insurance companies to reimburse the cost-a development that has the potential to spur wider adoption of ReWalk’s exoskeleton technology. As with other technologies, that would bring down costs for other consumers.

In June, the company cleared one critical regulatory hurdle by getting the product approved for consumer use by the U.S. Food and Drug Administration. Meanwhile, the U.S. Department of Veterans Affairs (VA) Bronx medical center announced that ReWalk exoskeletons would be covered for the center’s veteran patients with spinal injuries; the company expects that nationwide VA coverage may likely follow. With an estimated 42,000 veterans suffering from spinal cord injuries, that would open a significant market-and changes thousands of veterans’ lives for the better.

In September, Jasinski heralded the favorable decision by a German insurance company to reimburse a customer for a ReWalk exoskeleton as a milestone for the company, calling it “a sign of progress in developing standard reimbursement policies for exoskeleton technology for those with spinal cord injuries around the world.”

Like any fledgling technology company, ReWalk faces a long road of challenges ahead. They could be overtaken by another competitor-others are working to gain a foothold in the market-or other unanticipated circumstances could crimp the company’s plans.

But with the substantial infusion of capital through the company’s IPO, they’re better positioned to meet those challenges-and to continue making a serious difference in the lives of ReWalk system users. That potential could only be realized through the access to funding and growth opportunities that capital markets make possible.


To learn more about the ReWalk IPO, check out Life-changing Technology Puts People Back on Their Feet