REDONDO BEACH, CA / ACCESSWIRE / January 5, 2016 / Robotic exoskeletons have been a cornerstone of science-fiction movies, ranging from Aliens back in 1986 to Avengers: Age of Ultron earlier this year. While the military is actively developing the technology to help soldiers on the field, many companies are focused on hospitals rather than the battlefield. Robotic exoskeletons have the potential to dramatically improve life for patients suffering from a wide number of injuries.
According to ABI Research, the market for robotic exoskeletons is expected to grow at a 40% clip from $68 million in 2015 to $1.9 billion by 2025. The majority of demand comes from lower body exoskeletons employed as rehabilitation tools, says ABI Research analyst Dan Kara, but the market for the technology remains in its infancy. Looking ahead, the technology could be used for everything from helping workers left to futuristic military applications.
The technology has also made a lot of progress in gaining mainstream support. Earlier this month, ReWalk Robotics Inc. (NASDAQ: RWLK) soared after the U.S. Department of Veteran Affairs agreed to pay for its robotic exoskeleton to help paralyzed soldiers walk. The move could pave the way for greater field usage data and wider acceptance among public health organizations that could expand the technology into other indications.
Finding Opportunities
ReWalk Robotics is the largest pure-play company in the industry, with a history that dates back more than a decade. Founded by Dr. Amit Goffer - a quadriplegic himself, the company developed the first medical exoskeleton cleared by the FDA for personal use in the U.S. and has placed more than 80 units in rehabilitation centers and more than 50 in homes or communities. Its agreement with Veterans Affairs could dramatically expand these numbers in 2016.
Last year, the company generated nearly $4 million in sales with a net loss of $21.7 million. With the Veterans Affairs approval, the company should be able to place about 45 units at a price of $3.5 million, representing a significant gain. Some analysts also believe that the move could be a step forward in getting insurance companies to cover the $77,000 devices - a move that could dramatically expand its long-term earning potential.
Ekso Bionics Inc. (OTCQB: EKSO) is another competitor that has been around for quite awhile, with patents dating back to 2003 and its first technology launch in 2012 for complete spinal cord injury. Since then, the company has made a number of changes to its core technology, including the addition of SmartAssist in June. The upgrade enables patients to use the device earlier for the pre-ambulatory exercises and later during therapy to assist only as needed.
Last year, the company generated about $3 million from device sales, along with $2.4 million in engineering services with a net loss of $33.8 million. The company's long-term potential stems largely from its entry into defense and industrial markets, which sets it apart from its larger competitor. With solid gross profit margins of around 37%, the company represents an interesting opportunity in the space looking into 2016 and beyond.
Smaller is Better
While ReWalk is the most advanced from a commercial standpoint and Esko is expanding into new markets, Bionik Laboratories Corp. (OTCQX: BNKL) may have the most advanced technology. The company began just six years ago by two biomedical engineers that developed the world's first brain control interface for prosthetic devices. Leveraging this technology, they transitioned the algorithms to work with many sensors networked together such as pressure sensors and accelerometers.
The company's advantage over its larger competitors stems in part from its relatively recent entry into the market. In the same way that Tesla Motors Inc. (NASDAQ: TSLA) has transformed the auto industry, the company's robotic exoskeletons incorporate new technologies that weren't available when the original models were developed by other companies. These advantages could help it at an opportune time as the market goes mainstream.
For example, the ARKE(TM) technology is built with carbon fiber, aluminum and other composites and is fully customizable to fit all patients. With an easy-to-use detachable tablet display that connects to cloud software, therapists can rapidly make adjustments to the device and analyze data in real-time to make the most informed decisions. The device's foot sensors and 3D positioning system also makes it much more natural to use than competing devices at a lower price point.
In its investor presentation, the company projects bringing a product to market by the first half of 2017 in Europe and Canada where the process is faster than in the U.S. Management aims to leverage its success in these regions to then obtain FDA approval in the United States. With a market capitalization of just $85 million, investors also have significant upside potential.
Looking Ahead
Robotic exoskeletons are rapidly gaining traction in the patient rehabilitation market, with ReWalk's recent Veterans Affairs deal. While ReWalk has gained the most commercial traction and Ekso is targeting a broad base, Bionik's innovative technology and low price point could provide it with a competitive edge at the perfect time.
For more information, visit the company's website at www.bioniklabs.com.
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SOURCE: Emerging Growth LLC