#75: Igor Ciric | Check-Cap Ltd. (CHEK)

Hi Guys, it's Eric Schleien back again bringing you Episode #75! Thank you everyone for supporting the show 75 episodes later! You guys rock! This episode was recorded right before Christmas, however, a month later not much has changed. I sit down with Igor Ciric who is an individual investor who applies engineering frameworks to invest in publicly traded technology and technology-related companies.

Check-Cap Ltd. (CHEK)

One of the Igor's holdings is in a company called Check-Cap Ltd. (CHEK). Check-Cap is a clinical-stage medical diagnostics company developing C-Scan®, the first capsule-based system for preparation-free, colorectal cancer screening. Utilizing innovative ultra-low dose X-ray and wireless communication technologies, their capsule generate information on the contours of the inside of the colon as it passes naturally. This information is used to create a 3D map of the colon, which allows physicians to look for polyps and other abnormalities. Designed to improve the patient experience and increase the willingness of individuals to participate in recommended colorectal cancer screening, C-Scan removes many frequently-cited barriers, such as laxative bowel preparation, invasiveness and sedation.

Investment Overview

Check cap was selling $70 a share back in 2015. Today it’s an illiquid stock selling
for around $1.6 a share and the market cap is a bit over 13M.

Articles For Context:

C-scan price of $600 vs. $500 for Pillcam and $1000 for colonoscopies (US).

  • Colon cancer screening multi billion market.
  • Medtronic has $3 bil in annual net income and $123 bil market cap. 1 month of
    income -> $28 a share. (17x current share price)
  • Given Imaging had losses and no revenue for the six months in 2001. In 2002 the company grew revenues $29 million. In 2014, Covidien acquired Given Imaging for $860 million net of cash, 4.78X the $160 - $200 million in annual sales Covidien expected to gain from the acquisition. (When the company had grown) -> $100 a. share (60x current share price)
  • Exact Sciences Corporation multiple of x22.5 would generate $150 a share (92x current share price)

Risks

  • Funding 
  • Going Commerical (GE - Assembly, packaging, and shipping)
  • Warrants & Further Dilution

Recent Study Results

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