REDONDO BEACH, CA / ACCESSWIRE / January 25, 2016 / Bionik Laboratories Corp. (OTCQX: BNKL), a pioneering medical device and robotics company, recently presented at the Biotech Showcase(TM) 2016 in San Francisco. During the event, CEO Peter Bloch demonstrated why the company is an attractive investment opportunity by outlining the market opportunity and how its primary product Arke(TM) is poised to make its way through regulatory approval processes and capture market share.
In this article, we'll take a look at three key takeaways from the presentation that investors should keep in mind when evaluating the stock.
#1 - It's a Huge Market at an Early Stage:
The robotics industry addresses multi-billion dollar end markets in spinal cord injury and stroke alone with the potential to expand into many more areas. Despite its significant potential, the industry remains at a very early stage with ReWalk Robotics Ltd. (NASDAQ: RWLK) being the only FDA-approved vendor and no established reimbursement in North America. The good news is that these dynamics started to change in 2015 and it appears this will continue into 2016.
ReWalk’s shares more than doubled after the company announced that the Veterans' Administration would start providing reimbursement. With countries like Japan and Germany beginning to provide reimbursement for robotics, there's a clear precedent for reimbursements to spread to Medicare and Medicaid in the future. Germany provided reimbursement of up to 500 euros per rehabilitation session with a robotic exoskeleton, while Japan provides full reimbursement that has fueled shares of Cyberdyne.
Figure 1 – ReWalk Shares Following VA Announcement – Source: StockCharts.com
Bionik benefits from the early stage of the market in a few ways. By aggressively pushing forward regulatory approvals, the company will become one of the few initial beneficiaries of robotics as reimbursements are reformed. The company has also been actively building an intellectual property portfolio consisting of many patents across several different areas, which could create new products and licensing opportunities as the industry matures.
#2 – Bionik has Many Advantages:
Bionik has some competitive advantages over its peers that could pave the way to greater market share as the industry matures.
The primary technological differentiator is a cloud-based system that receives data from the ARKE's sensors, analyzes them, and displays the data to the physiotherapist in real-time. Through a removable tablet attached to the back of the device, the therapist can control the patient's movements until they are able to do so on their own. These dynamics make the device both simple to operate and comprehensive in terms of meaningful data analysis.
The second core competitive advantage comes from its price. With competing systems selling for $75,000 to $100,000, these devices won't be cost-effective to purchase for at-home usage outside of the clinic. ARKE was engineered to make it a much more economical solution for both clinical and at-home use. The lower price could also help increase market penetration at a critical time in the industry's early stage. The company is currently exploring other business models as well that would make the technology even more accessible.
#3 – Solid Growth Strategy:
The company also has a rich intellectual property portfolio and are leveraging their internal expertise and impressive network to develop innovative and synergistic technologies. Through strategic product and software acquisitions, management is working closely with University networks and industry partners to expand its product pipeline and licensing opportunities.
The approach mirrors that of many other medical device innovators that have since become multi-billion dollar companies. For instance, Medtronic Inc. (NYSE: MDT) started off by creating pacemakers and expanded over the years into a variety of different end markets. The diversification produced by this strategy has helped the company weather the ongoing innovation and evolving competitive landscape within the industry over time.
According to CEO Peter Bloch, "We believe we have tremendous opportunities for growth with our focused effort on the expansion of our product portfolio in the near and mid-term. We fully intend to focus on our goal of providing solutions to individuals with restricted mobility in order to play a role in their improved overall health, comfort, accessibility, and quality of life."
Looking Ahead:
Bionik plans to launch its product in Canada and the European Union before the U.S. due to the FDA's stringent approval process.
The company projects bringing Arke(TM) to market by the first half of 2017 in the E.U. and Canada, where the process is faster than in the U.S. According to its presentation, the U.S. will likely lag these approvals by about nine months as it moves through clinical trials. Investors are looking at late next year for the company to see real traction, which is nearer term than many early stage biotechnology or pharmaceutical companies.
In a sign of what's possible in these markets, Ekso Bionics Inc. (NASDAQ: EKSO) generated $3 million in revenue last year at a 37% gross profit margin. These figures are poised to significantly grow as the market for exoskeletons matures over time around the world. Bionik may have an edge when it enters the market given its newer technology and additional innovative products in the pipeline – Ekso has patents dating back to 2003 and launched back in 2012.
Bionik Labs trades with a market capitalization of approximately $83 million. With an emerging market opportunity, innovative technology, a solid plan to market, and a growth strategy focused on expanding its product pipeline, investors may want to keep an eye on the company over the coming year as it gears up for commercialization.
For more information, check out the company's investor presentation or website at www.bioniklabs.com.
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SOURCE: Bionik Laboratories Corp.
