UPDATED: ReWalk squeaks by with $36M IPO as oncology device player Mevion files to raise up to $69M

ReWalk's exoskeleton system--Courtesy of ReWalk

ReWalk Robotics ($RWLK), which offers the first robotic exoskeleton for spinal cord injury patients to be cleared by FDA, raised $36 million in an IPO. It didn't wow investors too much--pricing below the anticipated range. Meanwhile, another medical device company stepped into the IPO queue; proton radiation therapy company Mevion Medical Systems filed to raise up to $69 million.

In August, Israel-based ReWalk set a share price range of $14 to $16 and proposed to sell 3.4 million shares. The IPO came in below that at $12 a share, selling three million shares. Underwriters Barclays and Jefferies have the option to sell an additional 450,000 shares.

In order to scale up its business, ReWalk will have to convince payers to shell out for its exoskeleton. The company plans to do economic benefit studies aimed at the Centers for Medicare and Medicaid Services in the hopes of being included under its coverage guidelines, which are influential for other third party payers. ReWalk said it could take it three to 5 years to secure a CMS decision.

As of Aug. 1, ReWalk had sold 81 ReWalk systems. In its S-1 filing, the company noted that there's no uniform coverage policy and that these were purchased primarily by self-payers.

The startup had $945,000 in sales during the first half, an increase of 19% from the sale of three additional systems over the same period a year prior. That pegs the price tag paid for each of these three system at about $49,000. The company had an operating loss of $6.9 million during the first half.

Existing investors include SCP Vitalife Partners (24% pre-IPO stake), Yaskawa Electric (20.4%), Israel Healthcare Ventures (18.7%), Pontifax Ventures (11.5%), OurCrowd Investment (7.2%) and Previz Ventures (6.2%).

By mid-afternoon Friday trading, ReWalk had more than doubled its offer price to reach $24.60.

Just as one med tech company makes the leap into the public market, another jumps into the IPO queue. Mevion Medical is working to raise up to $69 million in an IPO. It has a proton radiation therapy system that it believes is superior to X-rays as a form of cancer radiation therapy. Its proton therapy centers are also smaller and cheaper than those offered by competitors, the company said.

The Mevion S250 Proton Therapy System is the only modular, single-room proton therapy system on the market; it has FDA approval and a CE mark.

There's only one installed system at the Siteman Cancer Center at Barnes-Jewish Hospital in St. Louis, MO; FDA already recalled the product in April due to a software issue that's since been resolved. The company has 21 signed system purchase contracts.

Mevion's S250 Proton Therapy System--Courtesy of Mevion Medical

More than 85% of U.S. patients treated with radiation therapy receive X-ray radiation. The company said its proton therapy is more targeted, causing less radiation exposure for healthy tissues. It attributes the relative lack of adoption of proton therapy to the size (90 to 200 tons, requiring as much as 100,000 square feet) and cost of proton therapy centers (which can exceed $200 million). Mevion's system has a physical footprint of about 2,000 square feet and costs a mere $25 million.

The company estimates that a U.S. customer could recover the costs of the system within three to four years, based on the assumption of about 275 patients treated per year with 35 fractions per patient. This also assumes the current Medicare reimbursement rates for proton therapy--40% for simple procedures and 60% for complex procedures.

Mevion makes the case that at least 15% of U.S. radiation therapy patients, or 170,000 patients annually, would benefit from proton radiation therapy. It estimates that there is a need for more than 600 proton therapy treatment rooms in the U.S. and more than 1,200 globally. It estimates that there are 31 operational proton therapy centers globally and another 39 centers in some stage of installation; these represent a total of 168 treatment rooms.

Mevion investors include Caxton Health Life Sciences (35.3% pre-IPO stake), ProQuest Investments (14.1%), Venrock Healthcare Partners (8.4%) and CHL Medical Partners (6.4%).

- here are the SEC filings for ReWalk and Mevion
- and here are the offering summaries from Renaissance Capital of ReWalk and Mevion

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