The following excerpt about CHEK recently appeared on a credible members only website:
"Check-Cap Ltd. (NASDAQ: CHEK) is an underfollowed clinical-stage medical diagnostics company engaged in the development of C-Scan, the first preparation-free ingestible capsule for colon cancer screening. It uses ultra-low dose X-ray and wireless communication technologies to create a 3D map of the colon, allowing physicians to look for polyps and other abnormalities. While a plethora of alternatives exist in the $25 billion colon cancer screening market, none of them are effective in detecting precancerous polyps and circumvent problematic laxative bowel preparation.
I believe CHEK is significantly undervalued with a current market that is less than the company’s net cash position, a clear path to commencing sales of C-Scan in the first half of 2019, and a host of upcoming catalysts starting with interim results for its EU post approval study for C-Scan Version 3. It is likely these results will demonstrate substantially improved sensitivity in identifying polyps relative to that of the CE Mark study, as average colon imaging coverage has improved dramatically as a result of the product’s updated algorithms and system optimization.
Given the growing market for capsule endoscopy and C-Scan’s unique ability to sustain its efficacy without bowel preparation, I believe the company could generate $60 million in sales and attain a $480 million market cap in 2020. This would imply a share price of $54, more than 13X CHEK’s current price. Utilizing the more aggressive price/sales multiple of its competitor, Exact Sciences Corporation (NASDAQ:EXAS), CHEK could trade to in excess of $200 per share by 2020 if it were to generate $60 million in sales.
I believe that Check-Cap is a compelling acquisition candidate for a host of companies, but Medtronic plc. (NYSE: MDT), a $117 billion company that acquired Covidien and its competing PillCam systems, may be particularly interested in acquiring Check-Cap to protect its leadership position in the capsule endoscopy market. While PillCam is an effective solution for colon cancer screening, unlike C-Scan it requires bowel preparation, which is one of the primary deterrents for patients."
