Check-Cap Reports Second Quarter 2019 Financial Results

Check-Cap, a clinical stage medical diagnostics company advancing the development of C-Scan®, the first and only preparation-free ingestible capsule based system for the prevention of colorectal cancer through the detection of precancerous polyps, today announced financial results for the second quarter and six months ended June 30, 2019.

Second Quarter and Recent Highlights:

  • Announced positive final results from its post-CE approval study of the C-Scan System. The study met its primary endpoint, achieving sensitivity (ability to correctly identify patients with polyps) of 76% in patients with polyps ≥10 mm and specificity (ability to correctly identify patients with lack of polyps) of 82% in all patients, compared to FIT that achieved 29% sensitivity and 96% specificity. In addition, the C-Scan System detected all 4 patients (100%) with polyps ≥40 mm, while FIT detected only 1 of the 4 patients (25%) with polyps ≥40mm. Overall, the C-Scan System achieved a sensitivity of 66% in all patients, including patients with polyps <10mm, while FIT achieved a sensitivity of 23% for the same population.
  • Progressed the U.S. pilot study of the C-Scan System at NYU School of Medicine and Mayo Clinic which is evaluating the safety, usability and subject compliance in up to 45 subjects. Results from the U.S. pilot study, if positive, would represent another major milestone towards the initiation of the planned U.S. pivotal study in 2020.
  • Appointed Joshua (Shuki) Belkar as Vice President of Operations, bringing more than 20 years of experience managing operations at global medical device companies, including Medtronic and Mazor Robotics.
  • Presented a poster at Digestive Disease Week®, entitled “Swallow and forget” study: Prepless X-Ray imaging capsule with enhanced algorithms shows substantial improvement in polyp detection.

“During the first half of 2019, we achieved two very significant milestones,” said Alex Ovadia, Chief Executive Officer of Check-Cap. “First, we initiated our U.S. pilot study, which, if it yields positive results, will set the stage for a planned pivotal study next year. Second, we reported compelling results from our post-CE approval study, which add to the growing body of evidence demonstrating both the C-Scan System’s positive safety profile and its superior clinical performance relative to FIT for pre-cancerous polyp detection. The C-Scan System is highly differentiated as the only preparation-free colon cancer screening alternative, aimed at addressing what is believed to be the primary cause for avoiding standard of care CRC screening, preventing a significant portion of the target population from being screened according to widely accepted clinical guidelines,” Mr. Ovadia concluded.

Financial Results for the Second Quarter Ended June 30, 2019

Research and development expenses, net, were $2.6 million for the three months ended June 30, 2019, compared to $1.7 million for the same period in 2018.  The increase is primarily due to an increase of $0.5 million in expenses for the post-CE approval study and ongoing pilot study, as well an increase of $0.3 million in salaries and related expenses as a result of expansion in head count and $0.1 million in share-based compensation.

General and administrative expenses remained consistent at $0.9 million for the three months ended June 30, 2019, similar to the amount for the same period in 2018.

Operating loss was $3.5 million for the three months ended June 30, 2019, compared to an operating loss of $2.7 million for the same period in 2018.

Financial income, net was $139,000 for the three months ended June 30, 2019, compared to $30,000 for the same period in 2018. The increase was due to income from interest on bank deposits.

Net loss was $3.4 million for the three months ended June 30, 2019, compared to $2.7 million for the same period in 2018.

Cash and cash equivalents, restricted cash and short-term bank deposits totaled $14.7 million as of June 30, 2019, compared with $17.3 million at March 31, 2019 and $14.6 million as of December 31, 2018.