After signing a strategic agreement with GE Healtcare, Check-Cap announces $5.9 Million Financing

8 August, 2016

Israeli Check-Cap developed an ingestible capsule system for colorectal cancer screening which could become a less intrusive alternative to colonscopy. Initially, in last few days, the company signed a strategic agreement with GE Healthcare and announced $5.9 million financing

Israeli Check-Cap developed an ingestible capsule system for colorectal cancer screening which could become a less intrusive alternative to colonscopy. In the last few days, the company signed a strategic agreement with GE Healthcare and announced $5.9 million financing

Chek-Cap's capsule utilizes innovative ultra-low dose X-ray and wireless communication
Chek-Cap’s capsule utilizes innovative ultra-low dose X-ray and wireless                  communication

Israeli Check-Cap, a clinical-stage medical diagnostics company developing an ingestible capsule system for preparation-free, less-invasive colorectal cancer screening, signed a strategic agreement with General Electric subsidiary GE Healthcare. The companies agreed to develop and validate high-volume manufacturing for X-ray source production and assembly into Check-Cap’s capsule. Upon successful completion, the parties may discuss collaboration on execution of a high-volume manufacturing facility and distribution of the Check-Cap system. Following the announcement, Check-Cap’s stock surged by up to 117%.

Today (8/8/2016), the company announced it has entered into an agreement with a single health-care focused institutional investor for a registered direct placement of $5.9 million.  The Securities Purchase Agreement provides for gross proceeds of $5.9 million, which is comprised of 643,614 ordinary shares, at a purchase price of $1.90 per share and 2,514,281 pre-funded warrants in lieu of ordinary shares, at a purchase price of $1.85 per warrant, which are exercisable for a nominal exercise price (approximately $0.05 per share).  In the event that all warrants are exercised, the total gross proceeds to the Company for this financing would be $6.0 million.

Check-Cap was founded in 2009 has developed an ingestible capsule that utilizes innovative ultra-low dose X-ray and wireless communication technologies to scan the inside of the colon as it moves naturally, while the patient follows his or her normal daily routine, while the system detects colorectal cancer and precancerous polyps. Colorectal cancer is the second leading cause of cancer death in the U.S., with an estimated 134,000 diagnoses and 49,000 deaths in 2016.

A less invasive alternative to the dreaded colonoscopy  

Check-Cap_Capsule_Logo-300x197Colorectal cancer is considered a relatively east to treat cancer, with high recovery rates – but this is only if detected in its early stages. The problem is that 50% of people over the age of 50 in the US are not screened. One of the main reasons for the reluctance of so many to undergo the CRC tests are the dread of colonoscopy, which is invasive and unpleasant.  Check-Cap’s solution is much less intrusive and does not require drastic changes in the patient’s routine. Once fully approved by the FDA, check-Cap’s solution might raise the willingness of people in risk to undertake screening.

Check-Cap is currently conducting a multi-center clinical feasibility study and expects to file a CE Mark submission for the Check-Cap system in the first half of 2017. The company intends to conduct a wider clinical study in the US and abroad in 2018. The company has only recently won a $1.25 from Israel’s chief scientist’s office.

A virtual Tour of the abdominal cavity

Check-Cap’s imaging capsule contains a device that transmits X-rays, with minimal radiation, to the intestinal wall and back. The analysis of distances creates 3D images of the colon’s internal surface, enabling the detection of clinically significant polyps with a high degree of sensitivity. Check-Cap’s x-rays, unlike optic alternatives, produces 360-degree angular scans. These scans enable 3D imaging of colon surface, thus enabling detection of polyps, which protrude inward into the colon, through the detection of irregularities in the topography of the colon. The data gathered within the colon is transmitted to a receiving device worn on the patient’s body that stores the information for offline analysis. The receiver will also indicate when the capsule has been excreted, within about 24-48 hours of the beginning of the screening.

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