Check-Cap (CHEK) PT Lowered to $6 at Maxim Group

Maxim Group analyst Jason Kolbert lowered his price target on Check-Cap (NASDAQ: CHEK) to $6.00 (from $11.00) but maintained a Buy rating.

Kolbert highlighted:

• The biotechnology bear market that emerged in late 2015 continues to drive an increase in the cost of capital and the dilution that companies face. In addition, a lack of data, or "data trough," has emerged for many companies. For microcap companies that are traversing a data trough (i.e. lack of catalysts), sustaining their existing valuations — much less reaching the premium end of the range — without proof-of-concept (POC) data in hand has become an unlikely possibility.
• Like Superman's X-ray vision, Check-Cap has an imaging device (we will call it "super-pill"). Super-pill makes it possible to X-ray the colon, activating the sensors only when the device reaches the target area. The device uses a tiny X-ray source (with a harmless amount of radiation) and is "flushed" when eliminated from the body. The data are transmitted to a sensor, and the examination is complete. As such, we see super-pill as a virtual colonoscopy option available to those who shun the arduous preparation associated with traditional colonoscopy. We also see it succeeding where Given Imaging's PillCam (which requires more prep than a colonoscopy) has not.
• No bowel prep, no diet changes, no invasive devices (scope), and no anesthesia are needed for a physician to see a detailed map of the entire colon and detect precancerous polyps. This is a paradigm shift.
• The imaging capsule device is currently in a CE mark registration trial in the EU, with a U.S. registration study planned for 2017.
• Conclusion. We continue to believe that Check-Cap's imaging capsule could be a potentially paradigm-shifting technology in the colon screening space. While we have reduced our price target to $6 from $11, we still see enough upside to more than support our Buy rating. We continue to expect a regulatory filing in 1H17.

For an analyst ratings summary and ratings history on Check-Cap click here. For more ratings news on Check-Cap click here.

Shares of Check-Cap closed at $1.26 yesterday.

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