Like many companies, Rewalk Robotics Ltd. saw its financials hit by the COVID-19 pandemic. It revealed May 28 that its total revenue for its first quarter fell to $0.8 million, down from $1.6 million during the same period last year. The company, which focuses on solutions that give gait training and mobility for individuals with lower limb disabilities, acknowledged the effects of the pandemic, noting that several Rewalk Personal 6.0 devices were not delivered as a result.
Against that backdrop, CEO Larry Jasinski said that the company, which has a presence in Marlborough, Mass., Berlin, and Yokneam, Israel, had modified its spending and cash usage to ensure that it can execute its plan for the rest of the year and beyond.
“The effect of the COVID-19 pandemic on our business and revenue is significant because our products require in-person contact to complete the sales process,” he explained during a call on the results. “This includes delivery of the system and conducting training in some cases, which we did not continue during this lockdown period.”
Hopeful news in Germany, U.S.
Still, there appears to be good news on the horizon, particularly in light of recent actions. For example, in May, the company restarted the shipping, delivery and training related to its Rewalk personal systems and is wrapping up the pending first-quarter orders. That’s in addition to new orders in Germany and many parts of the U.S.
Germany offers the company a lot of hope. Earlier this month, Rewalk unveiled the acceptance of the binding offer from the Deutsche Gesetzliche Unfallversicherung (DGUV) to provide qualified spinal cord injury patients with the Rewalk 6.0 robotic exoskeleton device. The offer applies for the provision of Rewalk Exoskeletons for all insured persons of the 36 different DGUV members/insurances.
That followed an April 23 announcement in which the company reported the finalization of national agreements with insurers Techniker Krankenkasse and Deutsche Angestellten-Krankenkasse – Gesundheit to allow any eligible beneficiary with a spinal cord injury to seek procurement of a Rewalk 6.0 exoskeleton system.
“Looking forward, the insurance contracts in Germany will impact revenue as long as users gain access to the clinics for hands-on evaluation and training,” Jasinski explained. “We had 98 pending German claims at the end of the quarter, with 35 of them in groups where we have contracts.”
The company also is seeing promise in the U.S., particularly as it is no longer going up against obtaining patients with the Department of Veterans Affairs’ near-complete trial to investigate home use of the Rewalk exoskeleton.
During the call’s Q&A session, Jasinski noted that the VA trial had enrolled 161 patients with a target of 160, and follow-up was finished, based on conversations with roughly 125 centers. At the same time, several centers are in a holding pattern.
"And we have no control over this. So, they may elect to publish on the 125 where everything is complete, or they may finish the other 35 and then publish. So, we originally expected them to be publishing … somewhere around year-end, Q1 next year. I can't tell if COVID is going to slow that down or not.”
Indeed, improvement for the company depends on what happens with COVID-19. “[Spinal cord injury] growth year-over-year in both regions in 2020 can occur depending on the COVID-19 conditions,” Jasinski continued. He noted that the company’s Restore offering, a lightweight soft exo-suit intended for use in the rehabilitation of persons with lower limb disability due to stroke, was going through capital approval processes in roughly 50 clinics when the shutdown started. “The status of any approvals and where the capital budgets, in general, are affected are presently unknown as we are awaiting guidance as these clinics reopen. We anticipate that in many cases, capital spending will be reduced due to the financial impact on the operations of these clinics.”
In June 2019, the company revealed that the U.S. FDA had cleared the Restore soft exo-suit system for sale to rehabilitation centers across the country.
Swayampakula Ramakanth, of H.C. Wainwright, asked about a June 1 Centers for Medicare and Medicaid meeting, during which a discussion will take place on establishing a new Level II Healthcare Common Procedure Coding System code to identify a wearable, motorized, personal lower body prosthetic exoskeleton system with adjustable ankle joint.
“Well, the first step is issuing a temporary code, and this public hearing is really the session where they will go over their recommendations,” Jasinski explained. After the members hear comments from stakeholders, a decision is expected shortly thereafter.
“The pricing and cycles of establishing CMS codes have varied a little bit, but generally, they match the calendar year for the government, which starts in October of this year,” he added.