May 14, 2015      

ReWalk Robotics Ltd.’s stock has dropped from a high of $43.71 per share last year to $10.66 as of last week, as investors have questioned its ability to sell its exoskeleton. At its initial public offering in September 2014, stocks were offered at $12 per share, and the company raised $36 million.

The Yokneam, Israel-based medical device company reported revenue of only $640,000 for the quarter, compared with the consensus estimate of $2.2 million, but its revenue was up 42.7 percent compared with the same quarter last year. ReWalk’s operating expenses grew from $8.3 million to $19.3 million from the fourth quarter of 2013 to the same quarter in 2014. The company has a market value of about $162 million.

Israeli and U.S. leaders with ReWalk user

Israeli Prime Minister Benjamin Netanyahu and U.S. President Barack Obama with a ReWalk user.

Rewalk is developing exoskeletons to help people bound to wheelchairs stand and walk again. The company has been trying to commercialize its ReWalk exoskleleton, which uses patented sensor technology, an onboard computer, and motorized legs. It also requires a rechargeable battery in a backpack. ReWalk sold 74 devices last year.

Although the 44-pound exoskeleton is the only one approved by the U.S. Food and Drug Administration and the European Union, it costs about $70,000, which makes it difficult to market and insure, said Matthew Taylor, an analyst at Barclays PLC. Regulatory barriers have slowed adoption in Japan.

The device has been used in rehabilitation centers, but it may be out of reach of many individuals without insurer help.

ReWalk’s competition includes Cyberdyne, Ekso Bionics Holdings, Rex Bionics, Panasonic, and Parker-Hannifin. Researchers at institutions such as the University of Limerick in Ireland are also working on exoskeletons to aid the elderly.

Rewalk got more bad news last week when Jeffries Group reduced its stock price target from $39 to $30 per share. Barclays had lowered its own price target from $20 to $13, and Canaccord Genuity set an $11 price target. However, some analysts still give Rewalk’s stock a “buy rating,” reasoning that it will be profitable in the longer term.

Turning around

ReWalk recently noted that the New Mexico Self-Insurers Fund was the first U.S. insurer to approve reimbursement for one of its devices, for a police officer injured during a car accident while on duty. The company also said that other organizations worldwide are starting to provide coverage for its Personal Systems.

The exoskeleton was originally developed by Argo Medical Technologies Inc. (later renamed ReWalk) after its founder Amit Goffer was paralyzed in an accident with an all-terrain vehicle in 2001. ReWalk’s devices could help some of the 281,000 paraplegics in the U.S.

ReWalk has partnered with Saimed Innovations, a medical technologies provider in Kolkata, India, to distribute its exoskeleton in that nation, which it estimates has about 800,000 paraplegics.