Robotic exoskeletons have become increasingly popular in recent years. While Tony Stark popularized the concept on the big screen, several companies are diligently working to bring the technology to the real world for a number of different applications.
In industrial markets, Cyberdyne (OTC: CYBQY) signed an agreement with Omron to develop assistive technology for use in factories. Robotic exoskeletons could be used in these instances to help workers lift heavy items to boost productivity and reduce workplace injuries.
In medical markets, ReWalk Robotics Ltd. (NASDAQ: RWLK) recently announced that the U.S. Department of Veterans Affairs would cover its robotic exoskeleton systems for qualifying individuals who have suffered spinal cord injury.
Bionik Laboratories Corp. (OTCQX: BNKL) is a small competitor in the robotic exoskeleton space – compared to the $109 million Rewalk or the $91 million Ekso Bionics Inc. (OTC: EKSO) – but its recent move to acquire Interactive Motion Technologies could bring it closer to generating tangible revenues and ultimately bringing its innovative ARKE technology to market.
Commercial Product Portfolio
Bionik entered into a definitive merger agreement with Interactive Motion Technologies Inc. earlier this month. The deal will dramatically expand its product portfolio to include three revenue-generating commercial-stage products and two development-stage programs.
“We worked tirelessly throughout 2015 to identify the right opportunities to execute on our growth strategy, and I believe this all-stock transaction will be transformational for Bionik,” said Peter Bloch, Chief Executive Officer and Chairman of the Board of Bionik Laboratories. “The proposed acquisition of IMT and its innovative medical engineering systems will enable Bionik to significantly expand our technology and product portfolio, enabling the Company to offer a suite of synergistic commercial-stage and development products.”
Unlike Bionik’s lower-body exoskeletons that target paraplegics, IMT’s robotics portfolio targets specific areas of the body, like arms, wrists, hands, and ankles. These FDA-approved devices are designed to help patients with more specific rehabilitation needs and are already sold in over 20 countries including the United States. Last year, the company’s revenue reached approximately $2 million with significant growth opportunities ahead.
ARKE Takes a Step Forward
Bionik began testing the first of its ARKE GEN2 late last year and will continue pre-clinical verification testing throughout early 2016. After this testing has been completed, the company plans to seek approval from Health Canada and the European Union regulators during the first half of 2017. Management then plans to submit a request for FDA approval, which is typically a much more stringent process than other countries.
From a technology perspective, the company entered into a partnership with IBM (NYSE: IBM) in February to develop a unique analytics system and apply sophisticated machine learning algorithms to improve the outcomes of neurological rehabilitation. This new infrastructure would enable access to the exoskeleton’s performance, patient data, and results of the ARKE rehabilitation across multiple sites, including rehabilitation centers and patient homes.
IMT’s development-stage programs could also help enhance or augment the ARKE product by adding new functionality. In conjunction with MIT (Massachusetts Institute of Technology), who is building the prototypes, the company is developing a novel treatment employing gravity-based methods to train gait and balance. These kinds of technologies may apply for Bionik’s lower body exoskeleton solutions.
Robotic exoskeletons have been growing in popularity and Bionik’s solutions are quickly leading the way in the industry. While few companies have commercial products, especially in the medical space, the acquisition of IMT should drive revenue. Bionik also announced that it has a search underway to appoint a Chief Commercial Officer to lead its sales and marketing effort and drive market expansion and revenue growth. These revenues will be deployed to advance its flagship ARKE technology that could see regulatory approvals early next year after completing testing and upgrades throughout 2016 as well as further growth opportunities.
The near-term revenue could help the company close the gap with Ekso Bionics that generated about $3 million in revenue last year and trades with a ~$90 million market capitalization. In 2017, the approval of the ARKE could help close the gap with ReWalk that trades with an even higher valuation of around $110 million. Bionik’s current market capitalization of approximately $70 million makes it seem like a compelling value in either case.
For more information, visit the company’s website at www.bioniklabs.com.