The stock of ReWalk Robotics (NASDAQ:RWLK) is up 30% in morning trading after the U.S. Food and Drug Administration awarded the company a “breakthrough device” designation for its exo-suit called the “ReBoot.”
Massachusetts-based ReWalk Robotics is a penny stock. At yesterday’s close, the company’s share price finished the trading session at $1.29. However, RWLK stock has moved as high as $2.10 in today’s premarket after the new FDA designation, giving hope to investors that the company is on the right track and its shares are ready for a meaningful move higher.
What Happened With RWLK Stock
ReWalk Robotics is developing a suite of bionic walking assistance systems that use powered leg attachments to enable people with lower limb disabilities to stand up, walk and even climb stairs. These products have the potential to revolutionize life for users all over the world. The company was founded in 2011 and its ReBoot exo-suit is undergoing clinical trials in Philadelphia. Its ReWalk 6.0 system retails for $85,000.
The “breakthrough device” designation from the FDA is an important milestone for ReWalk Robotics as it provides an easier and more streamlined pathway for the company to eventually get its ReBoot suit approved for sale and use in clinical and rehabilitation settings, according to a news release put out by the company.
Why It Matters
The FDA designation gets ReWalk Robotics a step closer to commercial sales of the ReBoot, which is positive for its future earnings and growth potential. Accordingly, investors are responding to the positive news and buying RWLK stock.
As a small, fledgling technology and medical device company, ReWalk Robotics is one of hundreds of companies whose devices may or may not come to market. With the FDA’s support behind it, the likelihood that ReWalk’s ReBoot system will be commercialized has now increased greatly.
The latest news also increases the probability that RWLK stock will move higher than $5 a share and get beyond its current penny stock status. More broadly, it makes the company’s stock less risky for investors and provides a vote of confidence in ReWalk Robotics.
What’s Next for ReWalk Robotics?
Investors who had the foresight to already hold RWLK stock in their portfolio are going to be rewarded today as the stock is positioned for a big pop. Other investors may want to take a small position in ReWalk Robotics stock and see where it goes from here. Keep the initial investment small and plan to buy more shares if the move higher sticks and if the stock continues trending upwards.
On the date of publication, Joel Baglole 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 InvestorPlace.com Publishing Guidelines.