The graph of Israeli company ReWalk Robotics Ltd.'s (Nasdaq:RWLK) share price is a good place for beginning the company's story. ReWalk, which has developed an external skeleton enabling people with spinal cord injuries to walk, held its Nasdaq IPO in September 2014, two months after obtaining US Food and Drug Administration (FDA) approval for its product. The offering share price was $12. Over the ensuing 15 months, the share price declined slowly and consistently to a low point of less than $6. Two weeks ago came a total turnaround: the share price skyrocketed 90% in a single day, and has now reached almost $14.50, almost 140% above its low point.
The reason for the turnaround was an announcement by the US Department of Veterans' Affairs that the US government would procure ReWalk's product for US soldiers with spinal cord injuries. The announcement not only means that thousands of the company's walking systems will be purchased at more than $70,000 per unit, but also gives investors hope that groups and insurance companies throughout the Western world will buy the product for disabled people or include it in their insurance coverage.
"These are good days for the company," said ReWalk CEO Larry Jasinski. "It's frustrating to have to wait to supply what we are working so hard on, and this step by the Department of Veterans' Affairs is changing the rules of the game - for the company, but especially for the wounded soldiers. Most of the people who wanted to use our system were actually waiting for some type of insurance support, and that's what we've been focusing on as a company for the past year."
Jasinski believes that the approval by the Department of Veterans' Affairs will open the door to the rest of the market, and provide access to both governments and insurance companies.
ReWalk originated in tragedy. One day in 1997, Dr. Amit Goffer, an electronics engineer and medical device entrepreneur, went for his first and last ride on an all-terrain vehicle. "The vehicle didn't work well, and collided with a tree trunk," he recalls. "My daughter, who was with me, was thrown in one direction, and I flew into the tree. The collision broke my neck, and immediately after the fall, there on the ground, I realized what had happened to me."
Goffer was in rehabilitation for nine long months, and after going home, decided on his own initiative to stop taking the cocktail of painkillers and anti-spasm drugs prescribed for him. "My IQ rose back to what it was before I took the drugs, and I started thinking that there was no reason why disabled people should always sit in wheelchairs. I had an idea in my head, and I started to check out whether it was physically possible."
Once Goffer realized that building the product was possible, and that there were over one million people in the Western world with spinal cord injuries who could use it, he started working with the help of a grant from the Chief Scientist's Tnufa Startup Promotion Program.
The way the system works is obviously quite complex, but Goffer explains how it works in simple language: "The system contains four motors in the thigh and hip joints. The user puts his crutches forward, and then the body naturally leans ahead. This leaning is recorded by the sensor, and the computer gives an order to send one leg forward. Another movement, and the other leg is sent forward. In this way, in a series of movements, you get a continuity of walking that looks very natural. You don't have to think about it, and when you get used to it, it works fine. It's designed to last for an entire day of continuous walking, and two years ago, our test pilot, Radi Kaiuf, walked 10 kilometers in the Tel Aviv Marathon with no problem."
ReWalk's test pilot has his own story: on May 3, 1988, one month before his scheduled release from the IDF, Paratrooper Battalion 202, in which he was serving, raided the town of Maidun in southern Lebanon. "In the final stage of fighting in a built-up area, I was hit in the middle of my body by a burst of fire, followed by a bullet in my back a few seconds later," Kaiuf recalls. "I fell, and didn't even lose consciousness at the beginning, but when you are wounded in the middle of your body, you have no feeling, so I had no idea what had happened to me."
Kaiuf was left paralyzed for life from his waist downwards, and was wheelchair-bound for 20 years, until he met Goffer from ReWalk by chance nine years ago in the treatments for paralytics that they were both undergoing. They have been together since. Kaiuf tests all the models that the company has made to date, and his immediate feedback enables the team of engineers to continually improve the system. Over the years, he has also been sent all over the world to demonstrate the system's capabilities to a variety of audiences.
"Walking changed my life," Kaiuf says. "At the basic body level, the very fact that I stand up straight and walk has a significant positive effect on my health, but it goes much further than that. When you stand, you see the world at your normal height. Instead of being four feet and three inches tall, I'm six feet tall again. That enables me to communicate with people in an entirely different way. Look, we're saddled with a stigma. When you sit in a wheelchair, people don't know if your problem is in your legs or your head. When you stand, people look at you differently. It gives you back your self-respect."
ReWalk's system enables people to not only walk, but even to climb stairs. This is done through a unique algorithm for picking up the legs differently. "You click on an icon of stairs on your wireless controller, bend a little while holding with one hand onto a railing or someone standing near you, and simply start going up or down," Goffer explains.
The IDF disabled are still waiting
The Department of Veterans' Affairs will establish 24 centers all over the US to evaluate the ability of people with spinal cord injuries to use the system. Those found to be suitable for the system can go to one of the 12 centers for teaching people how to use it. If the disabled person succeeds in training, he will be put on the waiting list for a system.
"Globes": That is very encouraging for US soldiers, but given that the invention is Israeli, the question immediately arises of why IDF disabled soldiers are not using it.
ReWalk founder Goffer's answer is not very encouraging. "In Israel - nothing. Here of all places, now that the US army has decided to buy the system for its disabled, it hurts me that despite our enormous efforts over the years, this hasn't happened here. When Pinchas Buchris was director general of the Ministry of Defense (two terms ago, S.S.), he agreed, the IDF chief medical officer agreed, the IDF rehabilitation department agreed, and the money was available. We didn't even want money beyond the basic cost. In addition, there was even an organization, Friends of the IDF, willing to pay for it. Why didn't it happen? I don't know. We spent a lot of time on it, it evaporated into thin air four years ago, and nothing has happened with it since."
The Ministry of Defense said in response, "The rehabilitation department examined ReWalk's technology, but for various reasons, the matter did not work out. At this time, we are examining the possibility of conducting an initial pilot with the company's system, in accordance with the criteria set by the professional medical personnel."
Published by Globes [online], Israel business news - www.globes-online.com - on January 5, 2016
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