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ReWalk Robotics is a Catch-22 Investment

From a bird’s-eye-perspective, the narrative for ReWalk Robotics (NASDAQ:RWLK) stock is an exceptionally compelling one, perhaps best demonstrated by comedian Chris Rock who may have been years ahead of the bull case for ReWalk.

Image of a person using an exoskeleton and crutches to walk.
Source: Ivan Chudakov /

In his landmark show, Bigger & Blacker, Rock decried the blatant ineffectiveness of the medical system despite modern society praising medical and life science technologies. Per the transcript (with modifications to keep this PG-rated):

You get paralyzed, they don’t got [stuff] for you. Look at Christopher Reeve, paralyzed. Superman can’t walk. What kind of sorry-[rear] [stuff] is that? Superman can’t walk. What’s next? What the [fudge]! Aquaman gonna drown in the tub? What the [fudge] kind of injustice is this? Superman can’t walk.

What I love about Chris Rock is that he says the things we’re all thinking about but are afraid to voice them in public. Certainly, it is crazy on a broader level that we can put a man on the moon but with a severe spinal cord injury, that’s it: you get – wait for it – a chair with wheels. That’s why the narrative for RWLK stock is fundamentally attractive.

Specializing in wearable exoskeletons, ReWalk Robotics’ variant features motors at the hip and knee joints, per my InvestorPlace colleague David Moadel. By targeting people with spinal cord injuries and similar mobility challenges, ReWalk’s solution can help deliver a better quality of life for patients. Further, the company also offers its ReStore Soft Exo-Suit, “which is intended to help rehabilitate individuals with lower limb disability following a stroke.”

But the economic factor also seems to bode well for RWLK stock. Moadel cites the company’s investor presentation, which notes that spinal cord injury impacts 291,000 patients in the U.S., with 17,730 new cases annually.

While enticing, you’ll want to check the other side of the story too.

RWLK Stock Must Navigate an Unproven Scientific Landscape

In terms of personal sentiment, I don’t think anyone would root against ReWalk Robotics. The medical mobility industry is easily one that attracts some of the highest sympathies among passersby. But ultimately with RWLK stock, you’ve got to base your decision on both the science and the economic profile.

Unfortunately, that’s where RWLK stock falls short. Yes, on paper, a wearable exoskeleton commands a large addressable market. As ReWalk points out, in addition to spinal cord injuries, myriad other conditions exist – such as strokes, arthritis and various degenerative diseases – that could lift the exoskeleton market. But just how effective is this platform?

If you ask physiotherapist and research scientist Ashraf S. Gorgey, the inquiry remains open-ended. Per Gorgey’s article published in the World Journal of Orthopedics, limited research and anecdotal evidence support the use of exoskeleton to improve quality of life and health related medical conditions after SCI [spinal cord injury].”

However, Gorgey also points out that “Considering the limited data and/or small sample size of the current published studies, it is premature to draw solid conclusions about the efficacy of exoskeletons in maximizing rehabilitation outcomes or ameliorating several of the health-related consequences following SCI.”

While not taking away from the benefits of exoskeletons, research indicates that this platform is not a one-size-fits-all solution. For instance, some exoskeleton study participants had to withdraw due to pressure-related injuries. Also, different brands feature different fitting standards and nuances.

I’d highly recommend you do a deep dive on exoskeleton science before making your decision on RWLK stock. But the other factor you should consider is the economics. Per data from MarketsAndMarkets, industry experts project that the global medical exoskeleton market will reach a valuation of $571.6 million by 2023.

That seems awfully small for a groundbreaking innovation.

Zoom Out the Chart

RWLK stock was priced in triple-digit territory in 2014. Now it’s a few pennies shy of $1.50.

I’m not going to get into what happened years ago because we’re concerned about the here and now. But the here and now is not necessarily a great picture because of the combination of scientific and economics-related challenges.

Gorgey’s analysis cited above states two key reasons why scientific assessments on wearable exoskeletons are limited in number: “prohibitive cost and the high level of training required before supervising individuals with SCI.”

In other words, it’s a Catch-22. To verify the science through extensive peer review, the economics has to make sense. But to justify the economics, the science also has to make sense – and it does, to a limited extent and thus, the limited expenditure.

If you don’t mind such circuitous narratives fueling your investments, knock yourself out. For others, you should use this article to jump start your own extensive due diligence.

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On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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