Home Value Investing Failed Biotech, Buying and selling Under Money

Failed Biotech, Buying and selling Under Money

Failed Biotech, Buying and selling Under Money


Verify-Cap (CHEK) (~$12MM nano cap) is an Israeli based mostly clinical-stage medical system firm that’s buying and selling nicely under money and lately introduced that it employed Ladenburg Thalman (they’ve generated a number of buzzy reverse mergers up to now) to run a strategic options course of.  The corporate beforehand was creating a colon most cancers screening check however these efforts failed and alongside the strategic assessment announcement, Verify-Cap additionally introduced they’re shedding 90% of their workforce, absolutely elevating the give up flag.

Operating it by means of a very fundamental liquidation evaluation (it ought to be famous the corporate did not embody a liquidation within the checklist of strategic various choices, however somewhat they’re taking a look at a sale, licensing settlement or reverse merger):

The severance prices for the 90% discount in power weren’t disclosed, in order that’s a guess, together with the G&A, however this one nonetheless trades at a large low cost to what it may distribute in a liquidation.  Now there are some pink flags, I do not see a big shareholder to guard shareholder pursuits and the international firm itemizing and elevating cash within the U.S. threat is current right here, though not solely unusual for biotech/bio medical system firms to be based mostly in Israel.

Be aware it is a tiny firm, do not use market orders, however the low cost right here is broad sufficient for me so as to add a small place to my rising basket of damaged biotech liquidation candidates. 

Disclosure: I personal shares of CHEK



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