NEW YORK, NY / ACCESSWIRE / November 18, 2015 / Once existing only in the imaginations of science fiction writers, robots - mechanical devices meant to imitate human movement and function, became a reality in 1962 when General Motors began using industrial robots on assembly lines, reducing waste while increasing speed and accuracy. In 1987, a gall bladder procedure was first performed by surgical robots, launching an era of minimally-invasive medicine with fewer incisions and shorter hospital stays. The medical world soon recognized the value of robotics: degrees of movement were unrestricted and surgical dexterity was enhanced. Visual acuity aided in quicker, more precise results.
Around the time General Motors revolutionized aspects of manufacturing, the US Military teamed with General Electric to experiment with an ‘exoskeleton' - pieces of metal strapped on limbs meant to help soldiers lift up to 250 pounds with ease. The first working exoskeleton was developed at Los Alamos Laboratories in the late 1980s, prompted by a victim of accident by parachute, and quickly adopted for field maneuvers by the US Army. Hydraulics provided the power behind these early models, but weight of the device and power supply requirements was problematic. Software to control movement had not yet been developed.
Medicine's interest in surgical robotics is gaining ground in an industry projected to reach $18 billion by 2018.
In 2013, orthopedics giant Stryker Corp. bought Mako Surgical, a pioneer in surgical robotics, for $1.65 billion.
Just recently, Smith & Nephew plc, another worldwide leader in surgical products, grabbed Blue Belt Technologies for $275 million, marking its position is this upcoming market.
Intuitive Surgical (NASDAQ: ISRG), blazing a trail in surgical robotics in 1999, finished last year with over $2 billion in sales and a stock that trades over $500.
Since then, time and technology took over, and exoskeletons evolved into rehabilitation devices for victims of spinal cord injury and stroke, with the hope that they would someday aid the disabled to walk again. Modern exoskeleton technology employs motion and force detectors, making it ideal for rehabilitation where electronic feedback from a patient's movements can be tracked and corrected. But not all exoskeletons are created equal. Designs existing today range from cumbersome to impractical. Ekso Bionics Holdings, Inc. (OTCQB: EKSO), with roughly $4 million in sales as of June 30, 2015, offers the Bionic Suit - a bulky apparatus comprised of shoes that resemble snow boots, a heavy power source worn on the back, and an assist cane. http://www.eksobionics.com/
ReWalk Robotics Ltd. (NASDAQ: RWLK), selling its sixth-generation device, the ReWalk Personal 6.0 http://rewalk.com/rewalk-personal-3/ has a design similar to Ekso albeit a bit more streamlined; however, its technology has not been updated in 14 years and still requires the use of a cane. Nevertheless, ReWalk is on a revenue run rate of approximately $1.2 million. As testament that personal robotics is a promising industry, Parker-Hannifin Corporation (NYSE: PH), multinational supplier of industrial and aerospace motion and control systems, laid plans http://www.cleveland.com/business/index.ssf/2012/12/parker_hannifin_developing_rob.html to introduce an exoskeleton in 2012 and recently announced commencement of clinical trials for Indego, far behind its plans for a more rapid FDA approval and commercialization.
Enter a new, sleek exoskeleton by Bionik Laboratories Corp. (OTCQX: BNKL), with a second-generation device, ARKE GEN2 (see below), for rehabilitation and, eventually, home use. ARKE is the result of work done by biomedical engineers from Toronto University who originally designed a ‘brain interface', or a direct communication path between the brain and an external device to repair sensory-motor function. Michal Prywata, creator of the interface, transferred this technology to co-found Bionik where he now sits as Chief Operating Officer.
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The redesign incorporates smaller, lighter mechanical components for better comfort and less tiring of the patient. Height can be adjusted from 5' to 6'4". ARKE is the only exoskeleton operating on a wireless touch-controlled tablet that helps physical therapists adjust ARKE. Power supply has been an engineering challenge with exoskeletons, but Bionik devised an improved energy density lithium battery system with an extended life and ease of replacement, important during a prolonged therapy session. Bionik's patents cover an electronic system that can be adjusted for future software upgrades to cover other rehabilitation applications. Also unique, ARKE data will connect to the Internet cloud for analysis and real-time transmission to the therapist. Pricing is expected to be 33% lower than competing products.
Although a budding industry, exoskeletons represent a market expected to reach $2.1 billion by 2021, http://www.kten.com/story/28732461/exoskeleton-robot-market-size-is-expected-to-grow-21-billion-by-2021-radiant-insights driven by an aging population more likely to suffer spinal cord trauma from falls. http://www.medscape.com/viewarticle/846194 Likewise, stroke is on the rise from a sheer demographic factor but interestingly, stroke is found to be increasing in younger adults due to diabetes and obesity, http://www.webmd.com/stroke/news/20110901/strokes-in-chldren-and-young-adults-on-the-rise which often go hand-in-hand.
Wheelchair bound patients, besides a great loss of life quality, undergo medical issues like urinary tract infections, insulin imbalance, and pressure sores. Physical therapy takes longer due to lack of patient mobility, further burdening our health care system. Exoskeletons should reduce the number of therapists needed, another cost savings. Out of the clinic, use of an exoskeleton can put someone back in the workforce, improving our country's productivity.
Insurance reimbursement, as with any new medical device, can be difficult to obtain. A benefit to Bionik is that competitors with products already on the market are clearing a path to payment, and gathering data on cost-effectiveness of exoskeletons. Bionik's CEO, Peter Bloch, formerly from Sanofi Canada, has vast experience bridging the gap between innovative healthcare solutions and medical insurance coverage and should be vital to this quest.
Clinical studies for ARKE GEN2 will commence shortly with approximately 12 patients each in two rehabilitation centers of excellence in Canada. Data on first findings are expected by the second half of next year. Filing for regulatory approval will be sought with Health Canada and the European Medicines Agency at the end of 2016, and with the FDA later in 2017. Bionik will only need to receive a 510(k) before marketing, as similar devices already exist, and path to commercialization could come within six months.
Other products are under development: Apollo, a prosthetic knee operated by microprocessors where patients can enjoy a smoother walking gait as electronics "learn" users walking patterns; enhanced software for movement-limiting conditions like muscular dystrophy and amyotrophic lateral sclerosis; and software developments to detect motion in stroke victims to assist movement in only one leg. Having already created the basics of hardware and software, Bionik will be able to leverage its manufacturing for future products, keeping cost of goods low that can translate into competitive pricing in the marketplace.
Results from the most recent quarter ended June 30, 2015 showed Bionik, a pre-revenue company, with cash of $9.1 million, the balance sheet shored up with a series of financings that totaled $13.1 million. Burn rate is about $340,000 per month. Although Bionik believes capital is sufficient to bring ARKE through clinical validation, it may have to seek additional funding, causing the risk of dilution to current shareholders.
Other risks to an investment in Bionik apply: trading volume is low and news flow, typical with small-cap companies, may be light. However, Bionik has a lot of activity to report in coming months that should keep investors interested. Approvals must be sought and granted. Insurance issues may hold up revenue. Once approved, training customers in using its exoskeleton could be time-consuming and drain the company's manpower resources.
Given the rapid growth of the exoskeleton market and the huge benefit to quality of life and potential healthcare cost savings offered by these devices, there appears to be a clear reward to any risk involved. Bionik has distinct advantages over competitors, and the talent and savvy of its team are likely to produce a superior product at a comfortable price, coming to sale at a time when paths to reimbursement are better understood, paving the way to meaningful revenue.
About Small Cap Forecasting, Inc.
Sharon di Stefano has spent 20 years as an analyst, beginning her career at Smith Barney, Harris Upham & Co. specializing in medical devices, pharmaceuticals, healthcare information technology, and bio-pharmacology. Ms. di Stefano had also served as Senior Venture Officer for the Edison Innovation Fund, implemented through the New Jersey Economic Development Authority that provided funding for early-stage life sciences companies. Industry experience includes laboratory research for Johns Hopkins Hospital and the Department of Defense. Ms. di Stefano received a Master's of Science degree, in Business, from Johns Hopkins University in 1986, and a Bachelor of Arts from the University of Delaware in 1984 with a minor in biology.
CONTACT:
Sharon di Stephano
smallcapforecasting@gmail.com
SOURCE: Small Cap Forecasting, Inc.