(Bloomberg) — ReWalk Robotics Ltd. shares surged after the U.S. Department of Veterans Affairs agreed to pay for the company’s robotic exoskeleton to help paralyzed soldiers walk again.
The shares rose 83 percent to $11 at the close in New York, the biggest single-day jump since their September 2014 debut. The stock had fallen from a peak of $37.15 just days after the initial public offering as the Israeli company struggled to build a market for the device that is strapped onto paraplegics to power their knees and hips and provide support as they walk again.
The VA issued a national policy to cover the evaluation of users, their training and the potential purchase of the ReWalk Personal exoskeleton system for veterans across the U.S. who have suffered from spinal cord injuries, the company said in a statement. There are 42,000 U.S. veterans who have lost the use of their legs, and ReWalk has estimated about half would be eligible for the system, creating a $1.9 billion market, said Raj Denhoy, an analyst at Jefferies LLC in New York.
“It’s not difficult to see how many people need this, it’s a question of can we get it to them and are the insurers going to accept this and provide it,” said ReWalk Chief Executive Officer Larry Jasinski. “This is the first of the major elements on the insurance side that were important.”
The company still has work to do to get the $77,000 devices into the hands of soldiers. First, people must be evaluated at one of 24 Veterans Health Administration centers for spinal cord injuries across the U.S. Then they need training to use the machine, a service most of the VA centers now have, the company said. The VA didn’t immediately reply to requests for comment.