ReWalk Robotics Raises $20M to Expand into China

ReWalk Robotics, which develops rigid and soft exoskeletons to help people walk again after injuries and strokes, is expanding into China expand thanks to a $20 million investment from Hong Kong-based Timwell Corporation Limited. ReWalk and Timwell affiliate companies will form a joint venture in China to develop, manufacture and market ReWalk’s exoskeletons in China, including Hong Kong and Macau.

The new venture will initially focus on ReWalk’s Restore soft exoskeleton for stroke patients, which ReWalk built in collaboration with Harvard University’s Wyss Institute for Biologically Inspired Engineering. In the future, the joint venture will commercialize ReWalk’s exoskeleton for spinal cord injuries for community and rehabilitation use.

Timwell is purchasing 16 million newly issued shares, or a 35 percent stake in ReWalk, at a per share price of $1.25. The investment will be made in three stages:

• $5 million after ReWalk shareholder approval
• $10 million by the end of 2018
• $5 million by April 1, 2019

“This investment from Timwell, a well-capitalized partner with deep local knowledge, enables us to expand the planned launch of the Restore soft suit exoskeleton in the United States and Europe to China,” said ReWalk CEO Larry Jasinski. “The expansion to China adds access to a market where there are more than 11 million stroke survivors, and 2.4 million people suffer stroke each year. To serve that population, the number of stroke rehabilitation centers in China is expected to exceed those in the US and EU combined by 2021.”

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ReWalk Robotics Frustrated with US Market

ReWalk also announced its Q4 and Year-End 2017 financial results, which help explain the need to expand into China and beyond. Total revenue was up for the year ended December 31, 2017 increased to $7.8 million, compared to $5.9 million in 2016. Total revenue was $1.5 million for the fourth quarter of 2017, compared to $1.6 million in the fourth quarter of 2016.

ReWalk sold 107 exoskeletons in 2017, 57 of which were in the US, 37 in Europe and 13 in other markets. ReWalk sold 119 exoskeletons in 2016. In Q4 2017, the company sold 23 exoskeletons – 4 in the US, 12 in Europe, 7 in other markets – compared to 39 in the prior year period.

Net loss for the year ended December 31, 2017 was $24.7 million compared to a net loss of $32.5 million for the full year 2016.

On the financial earnings call, it was obvious ReWalk is frustrated with the lack of growth in the US market. The company pointed out slow progress with the U.S. Department of Veterans Affairs (VA) and insurance providers. ReWalk said the VA is expected to purchase eight exoskeletons in 2018, but then added that the “VA continues to be slow to support veterans” in this initiative.

According to ReWalk, only 16 veterans have been covered by insurance for a ReWalk personal exoskeleton, with four more in progress.

ReWalk also pointed out that “despite encouraging discussions,” a large US insurance firm turned down ReWalk’s coverage proposal. ReWalk said 42 US commercial insurers currently cover its exoskeletons on a case-by-case basis. The company plans to submit another 25 proposals to national, regional, and state providers in 2018. It has already submitted three proposals in 2018.

Positive Signs on International Front

There has been progress with reimbursements from Germany and Italy, ReWalk said. There are currently 40 open claims with groups in Germany. And thanks to efforts with its Italian partners, ReWalk received workers compensation reimbursement for its personal exoskeletons in Italy.

GKV-Spitzenverband, the head office of German statutory health insurance (SHI), in February 2018 decided to list the ReWalk Personal 6.0 Exoskeleton System in the German Medical Device Directory (MDD). The MDD is a comprehensive list of all medical devices that are principally and regularly reimbursed by German SHI providers. This decision means ReWalk will be listed among all medical devices for compensation, which SHI providers can procure for any approved beneficiary on a case-by-case basis.

The ReWalk personal exoskeleton will be classified as “an innovative device for the immediate compensation of a handicap” in the MDD, and will be listed under a new subcategory for product group 23. The official publication of the MDD, which is issued annually, is expected by May 2018.

The GKV decision follows a similar policy issuance by German accident insurer BG in 2017, which provided for rental and procurement of ReWalk 6.0 Personal Systems for qualifying beneficiaries. Ninety percent of the German population are beneficiaries under SHI coverage, which creates the potential for thousands of individuals with spinal cord injuries to have access to exoskeletons.

ReWalk Robotics’ Restore Soft Exoskeleton to Begin Clinical Trials

ReWalk also announced that five top rehabilitation centers in the U.S. received institutional review board approval to conduct clinical trials of its Restore soft exoskeleton for stroke patients. On the earnings call, ReWalk said Spaulding Rehabilitation Hospital in Boston will begin the first clinical trial in about 2-3 weeks.

ReWalk said it plans to commercialize the Restore soft exoskeleton in Europe and the US in 2019, depending on when it receives CE Mark and FDA approval, respectively.

The Restore system is designed to transmit power to key joints in the legs with cable technologies, powered by software and mechanics similar to those used in its ReWalk exoskeleton system for patients with spinal cord injuries. The cables are connect to fabric-based designs that attach to the leg and foot.

ReWalk conducted an internal study with 9 patients in mid-2017. The system contributed to an approximately 20 percent reduction in forward propulsion interlimb asymmetry and a 10 percent reduction in the energy cost of walking, according to the study.