Dawson James Securities upgraded Check-Cap (NASDAQ:CHEK) to “buy” from “neutral” and maintained its price target of $1. The stock closed at 60 cents on Feb. 4.
The company’s C-Scan is a colorectal cancer screening test and is the first and only patient-friendly preparation-free test to detect precancerous polyps for early cancer intervention.
Analyst Jason Kolbert writes that Check-Cap has announced an agreement with regulators to begin the amended pivotal trial that it hopes to start the study by March/April time frame.
The study is designed in two parts. The first part is designed to enable further calibration of the system for the average at-risk U.S. population. The second part will include a statistically powered, randomized study that will compare C-Scan’s performance to traditional colonoscopy.
“We are hopeful that the start of the U.S. pivotal trial can signal a recovery for the stock,” Mr. Kolbert said. “We have always believed in the product, and that has not changed. Our downgrade last year was driven by dilution concerns. Those concerns are now behind us,” he added.
Check-Cap raised approximately $32-million last year plus $19-million in warrants. The company has $57-million in cash, equal to its market capitalization, Mr. Kolbert said.
In late 2021, European regulators renewed the company’s CE mark for an additional five years. The updated approval permits Check-Cap to commercialize C-Scan in Europe and continue to explore opportunities to launch C-Scan in other international markets.
