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ReWalk soars on coverage to let paralyzed U.S. veterans walk

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(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.

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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.

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“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.”

Work remains

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.

After training at a center and in the patient’s home is complete, the VA will consider purchasing a ReWalk Personal system for use at home and in the community, the company said. It is working on using lighter materials, a more compact motor design and stronger batteries to further improve the technology, Jasinski said.

“The training of centers, so that they can, in turn, train patients for home use, remains a gating factor,” Denhoy said. “While the headlines of the VA having formal policy to cover ReWalk’s exoskeletons is undoubtedly positive, the government moves at its own pace and the details on when significant revenues will develop are unclear.”

The company said it has sold a total of 186 of its exoskeletons globally through the third quarter, with 102 going to rehabilitation centers and 84 for personal use. Preliminary data show the motorized devices reduce complications and the need for medication, cutting health care costs, Jasinski said.

Insurance coverage

The company needs to get insurance reimbursement in place to commercialize the exoskeleton, which is why the VA’s decision is important, said William Plovanic, an analyst at Canaccord Genuity. Most of the 250,000 Americans with serious spinal cord injuries can’t afford to pay for the systems out of their own pockets.

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Rewalk’s competitors include Parker-Hannifin Corp., which is developing a similar exoskeleton technology called Indego, and Ekso Bionics Holdings Inc. For now, ReWalk is the only exoskeleton approved for use at home, letting paraplegics transition from therapy centers back to their own lives, perhaps walking there on motorized legs.

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