ReWalk Robotics (RWLK) Stock Is Flying… Here’s Why

Rewalk Robotics RWLK Stock News

Rewalk Robotics Ltd (NASDAQ: RWLK) is flying in the market today, trading on gains of more than 163% early on in the trading session. The gains come after the company not only announced FDA clearance, but also announced funding news that will give it what it needs to market the newly cleared product. Here’s what’s happening:

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RWLK Stock Flies On FDA Clearance

The big story here is the FDA clearance that was announced late yesterday. In the after-hours session, ReWalk Robotics issued a press release announcing that the FDA has cleared its ReStore soft exo-suit system.

The clearance covers the sale of the ReStore product to rehabilitation centers across the United States. With the approval, the ReStore system has become the only soft exo-suit with FDA clearance. ReStore is intended for use in the treatment of stroke survivors with mobility challenges.

Why This Announcement Was So Exciting

First and foremost, the FDA approval means that RWLK may now legally sell its ReStore product to rehabilitation centers in the United States. This will open what investors believe will be a significant stream of revenue. To get an idea of just how significant this revenue stream may be, just take a look at the stats surrounding stroke.

At the moment, it is estimated that around 17 million people become disabled around the world annually after having a stroke. Unfortunately around 80% of patients that have a stroke will suffer from gait impairments.

These are the patients that will be prime candidates for the use of the ReStore. In the United States alone, it is estimated that 795,000 people will have a stroke annually. At the 80% rate of these patients that could see benefit from the ReStore device, that means that about 636,000 patients in the United States could be candidates for use of the device annually.

Ultimately, an audience like this will allow the company to take a giant leap toward profitability. In fact, in his statement, Larry Jasinski, CEO at RWLK said exactly that:

The exo-suit achieves our commercial goal to offer a functional and affordable system that can be utilized in the ‘Main Street’ clinics in every community. With a launch price of $28,900 as well as leasing options, ReStore offers cutting edge innovation with features that redefine therapy at a price that is accessable for a broader range of clinics than existing robotic technologies. The current gait training reimbursement codes enable immediate penetration and sales growth as part of our pathway to become a break even and profitable company.

Marketing Will Likely Happen Quickly

Having a product approved in the United States is great news. However, when products are approved by the FDA for companies in the position of ReWalk Robotics, commercialization can hit delays. Often times, these companies simply don’t have the funding to commercialize a product. Therefore, they must look to raise funds or team up with partners to move into the commercialization process.

As a result of news that was issued in the pre-market this morning, that’s not the case for RWLK. In fact, in a press release, the company announced that it has reached an agreement with several accredited investors.

Under the terms of the agreement, these investors will purchase warrants to exercise and purchase 1,446,665 ordinary shares at an exercise price of $7.50 per share. The company says that it expects to generate about $10.8 million in proceeds from the transaction, before deducting placement agent fees and estimated offering expenses.

The company went on to explain that the funds will be used for the sales, marketing and reimbursement expenses related to market development activities of its ReStore device. The funds will also be used to broaden third-party payor coverage. Of course, excess funds will be used for further research and development.

Ultimately, with approval from the FDA and around $10 million in funds coming through the door, ReWalk Robotics has everything it needs in order to market the ReStore product. This means that a significant revenue stream with the potential to push the company to profit is likely just around the corner.

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What Do You Think?

Where do you think RWLK stock is headed moving forward? Join the discussion in the comments below!

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