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Technology IPO Updates (9/8/14)

Written By Jason Stutman

Posted September 8, 2014

1) ReWalk Robotics


Expected to Trade
Friday, September 12

Price Range

Business Description

ReWalk Robotics is an incredibly exciting play on medical robotics. The company designs, develops, and commercializes exoskeletons that allow the disabled to stand and walk again.

The company markets its proprietary ReWalk exoskeleton, which is the first and only exoskeleton approved by the FDA.

These exoskeletons use patented tilt-sensor technology and onboard motion sensors to drive motorized legs. Current designs are built for people with spinal cord injuries resulting in paralysis of the legs.

Here’s a photo of President Obama awkwardly hugging a user of the device:

obama hug

These devices can be used both in rehab and during everyday activities at home with two separate models: ReWalk Rehabilitation and ReWalk Personal.

Our take

Getting the jump on FDA device approval is no small feat (no puns intended here). ReWalk being chosen as the first medically approved exoskeleton is an absolutely HUGE deal.

There are an estimated 12,000 new cases of spinal cord injury in the U.S. every year, and an estimated 300,000 individuals are already suffering. Giving people the power to walk again isn’t only going to be profitable, but it’s also something to feel pretty good about.

ReWalk’s prospectus filing shows revenue growth of 63% between 2012 and 2013 alongside $8 million in cash/equivalents. The IPO is expected to pull in $50.3 million, which should give this emerging growth company at least five quarters of wiggle room at current burn rates.

Historically, ReWalk has earned the vast majority of its revenue through ReWalk Rehabilitation, but the company plans to focus primarily on commercializing its ReWalk Personal exoskeletons moving forward.

By expanding its products to at-home markets, ReWalk is looking at extensive opportunity for top-line growth. Exoskeletons also have a multitude of potential applications in military and warehousing. The bull case here should not be overlooked.

Putting that aside, the mere speculation and hype over the first FDA-approved cyborg-like device should be enough to float this stock for a while. We’re fans of ReWalk right out of the gates.

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2) Affimed Therapeutics


Expected to Trade
Friday, September 12

Price Range

Business Description

Affimed Therapeutics is a clinical development-stage biotech company focused on highly targeted cancer immunotherapies. This means the company approaches cancer treatment by harnessing the body’s own immune defenses (T-cells and natural killer cells) to fight tumors

Affimed’s proprietary drug candidates are called TandAbs because of their tandem antibody structure, and they are designed to direct and establish a bridge between either NK cells or T-cells and cancer cells.

Affimed is proposing that these TandAbs have the ability to bring NK cells or T-cells into proximity of cancer cells and trigger a signal cascade that leads to the destruction of the cancer cells. The basic model of action is illustrated below:

tandam moa

As a result of their chemical structure, TandAbs bind to T-cells, NK cells, and tumor cells with high affinity. The TandAbs also have short enough half-lives to allow intravenous administration.

Based on their mechanism of action and all available data, Affimed believes its product candidates “may ultimately improve response rates, clinical outcomes and survival in cancer patients and could eventually become a cornerstone of modern targeted oncology care.”

Our take

The action mechanism is promising, but Affimed’s most advanced product candidate is only in phase II. Barring any special drug designations from the FDA, that gives us around four years before the company has a marketable product.

Affimed lost $14.3 million in 2012 and $26 million in 2013 through operations. The company’s prospectus shows just $4.2 million left in cash. At current burn rates, and with the IPO expected to pull in just $75 million, Affimed will likely need to seek additional financing before putting out a marketable product.

In other words, we like the science, but we don’t feel great about the stock. Affimed will be worth another look closer to phase III.