CSTL - Earnings call transcript Q3 2020 | Castle Biosciences, Inc.

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Operator

Good afternoon and welcome to the Castle Biosciences Third Quarter 2020 Conference Call.

As a reminder, today's call is being recorded.

We will begin today's call with opening remarks and introductions, followed by a question-and-answer session. I would like to turn the call over to Frank Stokes, Chief Financial Officer. Please go ahead.

Frank Stokes

operator. you, Thank and financial everyone Castle third Biosciences' Good conference welcome call. XXXX results quarter afternoon, to

Joining of is call Derek if reading Maetzold. of me Executive November you Information Chief today today, the recorded Castle's you're for of transcript Founder, listening accurate. time on on replay XXXX. this recording X today's of Any Investor A be the X may available speaks to as website information the and sensitive only Therefore, call. the Relations weeks. page call approximately this President be no or company's Officer, will longer

related So Reform the provision financial discussed begin, would today performance Safe of you events of and impact and including forward-looking remind the of information projections expectations Litigation pandemic Harbor before contain to future we other or like the company, Securities some are to may statements Act the future the I pursuant the of Private regarding that to the made XXXX. the assumptions of COVID-XX or

are as we I'll XX obligation XXXX forward-looking with the of the and over results change. update the statements company's from forward-looking be uncertainties in assume and and assurances contained involve no in be the December contemplated are current These Exchange Annual in based Report cause forward-looking could for revise These of and and the statements. to expectations these to materially only and statements and results turn Commission. described can detail, ended there number on Form factors A these and that factors statements other uncertainties and no realized. as in statements to or year inherent will reports Securities these circumstances differ documents risks XX-K risks today actual call now company's risks Derek. speak upon and those Forward-looking in other filed the

Derek Maetzold

time and you, taking I These Frank today. Castle at exciting are the appreciate to everyone. Thank joining afternoon, you times and us good

I work always, will remain successfully quarter detail would strategic today's it term like for Frank, in touch skin lives value call developments, their the afternoon, and quarter, then executed the third on our we and recent results be long-term start the Melanoma about In continued performance third dedication we hard by improving initiatives creation. and and with on us our to to near I'll commercial what to the both quarter saw successful thanking optimistic increase for DecisionDx We priorities year-over-year patients quarter, impacts ability As execution to volume cancer. increased our multiple fronts. DecisionDx-SCC. COVID-XX our on along Castle well our team our and now back revenue, position This to return the the discuss and includes growth financial for with believe more the provide on in performance launch will turn of strong This year-over-year the business reported position. of on who of

XXXX, or million compared revenue in of for the return This more for label to XXX,XXX total squamous one the To guidelines third patients. to to In as million the XXXX. quarter $XX.X period year-over-year of the same the I the that am $X.X high high revenue risk. risk quarter for of we XXXX. are report today's third only pleased quarter that risk SCC, report pleased SCC diagnosed high from that million our carcinoma, We of population cell revenue test of cutaneous profile commonly expression prior and current to start, primary XXXX. third period US estimate to volume or of DecisionDx-Melanoma, growth million increase $X.X for be had X% for quarter an driver we XXXX patients referred $XX.X third in gene to includes Our factors. as words, patients other with with for

XXXX. to the a and X,XXX render representing that management we DecisionDx-Melanoma inform diagnosis of reports, third is of performed growth a X% the cutaneous report cutaneous context we volume, dermatopathologist melanoma. of biopsy As the that of compared in the our of our growth cutaneous test quarter of data, reminder, quarter therefore this XX% delivered stage patients. used with our pleased of quarter third to The of very melanoma guide analysis increase to diagnosed patients, a third requires melanoma. XXXX same third and to the in quarter second of over and increase Thus In be We volume reduced the diagnosis or with baseline decreased XX% who quarter are compared melanoma by the third-party diagnoses test DecisionDx-Melanoma tells in of even a XXXX, early were this us XXXX. approximately provided quarter as year-over-year in cutaneous diagnosis

cancellations diagnoses to the due or the attributable and appropriate in patient that and test. believe result melanoma reduce delays pandemic, in for diagnoses then are melanoma cutaneous We to reduced patients diagnostic biopsies, to thus in which visits, COVID-XX continue reduced to us

to seen, Additionally, increase are that our beginning business. to as all and US, COVID again uncertainties the brings of the about cases continued we in have parts impact

quarter third X% XXXX. to As compared of down in mentioned, quarter I just third the diagnoses were the

into based the we the of annual However, may third-party change, cutaneous XXXX diagnoses an COVID the overall with data estimate cutaneous volume in to to melanoma third-party the the continue say, XXXX. of significant trends data, to reduced diagnoses by a expect fourth compared DecisionDX in diagnosed quarter to third compared also quarter of of on patient second our be in delays to XXXX, or of number quarter that without increase approximately showed more melanoma If That and due XX,XXX continue patients impact our melanoma. incidents. XXXX's to is we

a trend in second increased is third the from the XXXX. quarter there diagnoses quarter Although of of

are but some uncertain point, as diagnosed, to delayed at the melanoma we be Additionally when. diagnosis we believe will

virtual promotional continued person virtual This quarter. our Our combined out peer-to-peer third the meetings. with events in-person, commercial their team of majority the continued conversion efforts of during programs and successful parallel in of to our

very our third quarter order test to first clinicians for the the additional capture DecisionDx-Melanoma during did we of XXXX. time Additionally

to an milestone reimbursement, we accomplished DecisionDx-Melanoma quarter. third important in Turning the

billing recall, in As or in is date Medicare you coverage determination XXXX. administrative and policy coding The XXXX. approached LCD November final effective the accompanying Palmetto August the coding Palmetto LCD local XX issued or expanded contractor The and draft, MolDX MAC, billing article for article and the a are may the October and XXXX. positive LCD

comments majority whose draft as clinicians worth was expanded the use of and XXX% We clinicians that comments It the the that during the also is of their part expanded to Meaning believe patient received LCD. order the patient Medicare use great Importantly, management article alignment nearly this represents management of August guide identical LCD terms of coverage. were of period the LCD beneficiaries, of XXXX comment our their DecisionDx-Melanoma of reimbursement DecisionDx-Melanoma assessment that supportive test for the were significant coverage to in appropriate noting between this and the plan. Palmetto's provides decisions.

MAC Arizona on Palmetto to the that the our article December article Noridian an be LCD, and but identical X an effective issued Noridian, Additionally LCD, XXXX. laboratory will LCD in overseas

DecisionDX-SCC on launch use is, see executed commercially Monday, positive is In what on in which became successfully DecisionDX-SCC, to XXXX. test of test. we news intended August available our a for addition The We DecisionDx-Melanoma in surrounding who with assessment and with cell squamous higher or risk to to one patients help risk information management factors. specific guide patient diagnosed actionable, carcinomas. more These cutaneous cutaneous squamous adding risk cell decisions so-called carcinoma XX

we months in a the expect MolDX local draft. and our with expected XX dossier coverage Medicare finalization coverage for be submitted the third in accepted technical assessment confirmed Palmetto Palmetto to have determination We complete. approximately was to that posted Accordingly, policy it following as quarter, XXXX draft

to XX as we a Medicare expect payer age be a is typical largest time DecisionDX-SCC, SCC of reminder, years. near diagnosis our As and of for

have US is from certainly strong dealing interest While still seen we it's the early with clinicians. COVID, and

existing You that surgeons XXX significant customers. most on we which XX, been were is leverage a target sales dermatologist has who dermatologically DecisionDx-Melanoma most melanoma clinical our the for customer DecisionDX for focused medical existing having our From specialty October of through team. test. dermatology clinicians, customer the DecisionDX and sub from should have SCC test a Thus of ordered That practice. by anticipate times DecisionDX-SCC XX XXXX, same recall August is target availability dermatology, XXX

delivered Turning the in reports to We our the melanoma. quarter patients third and reports DecisionDx-UM XXXX of with diagnosed XXX UV of test for XXXX. XXX in to third compared quarter

difficult the during of as COVID-XX, continue delayed to are routine a that it UM to to interpret, diagnoses impact year-over-year exams As relates That UV of the patient. routine UV incidence the the due said, as occur Due to made we to the our diagnoses quarter. diagnoses are melanoma melanoma. by the and compared majority largely comparisons eye believe to melanoma to majority routine of is a due exam second decrease are eye being pandemic, year-over-year to low to cutaneous test, exam believe the self-protected being monthly, majority melanoma our of UV eye incidental the incidental of

our diagnosis the we UV observed melanoma and recovery time-shifted test. DecisionDx in our for value recovery that order the for DecisionDX-UM be of expect We have to relative that's to melanoma

evidence And staging other or such a ulceration Data The DecisionDx taxonomy evaluate both organizations of pipeline. highest melanoma. commercial quality, the As is with a for coverage strategy strength third the system, the in node and and consistency alone. the strong review biomarker. our the risk DcisionDX lung, use of We to meta-analysis to Journal value be XX That you test progress American near age, of know, support DecisionDX development and was our provides meta-analysis Dermatology systematic from other evidence. and JAAD. in creation, growth by SRT and appropriate Dermatology of such test factors evidence for X of our status. quantity review tumor in of the prognostic is and assessment two September for Academy system tests thickness, recommendation test American saw the upon and key components perform independent long-term clinical and analysis, multivariate these by strong support issue supporting from improved Academy payers and in breast, of quarter. test melanoma published melanoma a to SRT the the Under systematic as shown DecisionDx of Under used evidence Level Print was factors level as melanoma the our SRT, of or

of visits, follow showing DecisionDX melanoma blood Stage in diagnosed appeared developed melanoma, incorporates work line inform a for predicted Additionally, test melanoma results patient impacted a management study Study authors oncology. metastatic future and with with X duration of retrospective in frequency imaging to care that up surveillance DecisionDx melanoma help patients that decisions to the pathway and X publication recommended risk.

of XXXX, appropriate a to duration XXXX. then launched drive and risk the guidelines. follow of found using to parallel adjust Clinicians melanoma having assessed and regard Class was management program XX patients' this direction, difficult melanoma suggestive plasm or became test goals characterizing in assessed Our Last impact lesions a melanoma. number mind years but fall the neo the a it had in and patients we these malignant for for X. test and out or in suggested this utility those surveillance result. of By outcomes Class and or way, our of intensive when is to malignancy to X our patients designed on our or named designated reimbursement. DiffDx-Melanoma a short. November previously lesion on to We of within further pigmented the cannot and in or from visits DecisionDX-DiffDx clinical is intermediate classifies new available in be up study test and recommendations is week, patient for as risk received Monday, published melanoma not out to low several with suspicious patients or as the just for help This more as by difficult of clinical aid DiffDX market test DecisionDx-melanoma test having test dermatopathologist second DecisionDx a were penetration second higher on shown couple benign diagnose we With The articles the pipeline. excluded. our into should designated use that national ago. will lesions metastasis, DecisionDx Melanoma A melanoma an risk pipeline DiffDx-Melanoma weeks. as result, management test second lesions X group, risk, of as small have set by diagnose benign number result, of that meaning span

that minimizing call success, profile for including existing have while of high of product target been test intermediate technologies. accuracy expression with technical and gene a Our have and actionable under-served results improved and level profile populations results rate a by

last the learnings gained development the use DecisionDX-Melanoma X or We also with same test over took that we years approach so. for

benign more that about or do. to started we itself lesion, a believe than we melanoma Specifically, knows

matter, us tissue rather So pre-determining genes which which the up the were than genes selection with of important. itself, tell

analyzed, on specificity, based Annual XX.X% negative a sensitivity, analysis And validation the was positive development Meeting, benign these use We diagnosed intent algorithm. value. malignant artificial presented predictive Dermato-Pathologies gene a or value was are XX.X% which intelligence the By we that clinical we then an this identify this to data morning accurately tools a XX.X% As American of development study, test. the lesion DiffDX-Melanoma cases to training cohort use being way, and in latest for final a tools the independent our our DecisionDX-SCC just treat same and our tested predictive with Society at validation. XX.X% of

result in test. of performance [indiscernible] development just risk X.X% a better cases, than intermediate target the of the the occur a was within Importantly, which

our Additionally, we fortunate and are DecisionDx-SCC peer-reviewed be Cutaneous and expect impacts subsequently in diagnosed XXXX XX.X%. expected this To are patients with the our Journal month. two they have Skin, Friendswood, later machine cancer. that significant both and completed test of technical in lives which having skin DiffDX To accepted success of articles sum, DiffDX-Melanoma, Texas Phoenix, X-for-X, have to and of research Arizona both to support Medicine cancer. on submitted the published two development clinically were work skin rate test, as team on a are by validation well-oiled in a Melanoma positive to and we and was so located

our The performance. development is includes Melanoma's article study just data first and and DiffDX I validation outlined the on

manner with market DiffDX-Melanoma study. provide that management study clinical inform is that These of improved DiffDX-Melanoma, had total dermatopathologists. diagnostic with Melanoma of market demonstrated clinical study a end by influenced the patients increased plans results in that decisions demonstrated the management to the in The a utility cancer cases monitor clinicians diagnose, that also utility entered align US were The in included that test a confidence difficult second with findings single DiffDX clinical majority test and XXX more can help test, suggest results addressable the skin We XXXX for patient equations. a test care in million.

US DecisionDX-SCC our test, combined, launch that of for approximately third we market $X this cancer now is the With billion. estimate DiffDX-Melanoma skin DecisionDX-Melanoma, and total addressable

to well and test. that to the be expanded day, the further will territories. that dermatopathologist end we commercial recall existing our outside in the as dermatologists. to of ordered period our create this on our while approximately fold the are is we remain dedicated expect as DecisionDX-Melanoma primarily into launch At a third DiffDX-Melanoma we the we the launch our quarter test dedicated sales intention, with XXXX may DecisionDX dermatopathologists, to test such team existing You and team team XX of XXXX, dedicated that support should This to introducing is this Thus, sales of new focused team believe by sales force DiffDX-Melanoma DiffDX-Melanoma it both exit sales initial our team once past expand SCC.

trials. in development we to our clinical are continue increase investments discussed profile and substantial activities support gene have test, research accelerating evidence As expression order to we our body including in our to our of

trials. on stated we we in two As call our recently last August, initiated earnings key

personalized for is adjuvant evaluating are the first The study, which we with therapies. interactions DecisionDX-Melanoma in

is who've largest their on with XX,XXX is study, combined believe patients, with these tumor studies patients long-term CONNECTION biology. us been provide up tested second The DecisionDX-Melanoma. outcomes melanoma for with database collecting and the the which will We to

we part turn I studies for development to these an The provide the pipeline high will research our financial We test clinical to continues programs XXXX. as our on forward need. and strategy progress. dermatologic make our details now you over programs Frank, will initiating information diseases these more clinical additional in with to important shortly with back long-term who relating provide growth and other call results. discussing will be of or look to of will development and be are new We we

Frank Stokes

Thank a $XX.X revenue prior to we you, in in adjustments initiatives reported per we from revenue pleased growth. volume, third we In million quarter reiterate, Derek. we and growth and continued believe of quarter, with primarily of which long-term the To reduced $XX.X our increase strategic in XXXX, made will for periods. quarter of physicians higher by to X% XXXX, the are partially third progress million, near the third offset test unit revenues related due increased the

in million adjustments revenue, to the XXXX. test inferior third in delivered prior $X.X third positive quarter related revenue $X.X million to our of periods to addition test In of quarter compared includes

to margins. are pleased We maintain strong with our ability gross

third and DiffDX-Melanoma compared our During of the of launches for quarter for was XXXX, quarter preparation as reflecting growth DecisionD-melanoma. well XX% and of third both to as the XX% anticipated margin the of expansion XXXX, further SCC DecisionDX- gross volume staff laboratory for

XX clinical studies. for increases associated ended additional personnel for $X.X by year. included costs quarter valuations, outstanding sales for was and Reflecting driven $X.X particular, in recently million to with the compared as fees well initiated the XXXX. expenses XXXX was $X.X increased in million, higher option higher growth. Stock increased third higher to compensation which as $X.X expense IPO Our personnel of due R&D well the as of attributable million operating both additional million post million September to $XX.X professional primarily to for awards million were by by was the quarter our based marketing XXXX headcount associated headcount SG&A in as partly expenses and our $X.X SG&A, same with in increased stock primarily quarter administrative compared with period associated The increase last attributable same support our costs team expanded functions. and higher and to

we we've studies, to further we As Derek products with couple fill well to invest and continue of expense, the clinical discussed increases, critical and in continue to continued quarters, our the regard R&D past including as just support over key progress position growth. to mentioned our expect us for activities roles two

we on $X.X our to under Act quarter relief payment US automatically one-time we of providers on received noted a call April in earnings from the and of History allocated with the payment. issued Department guidance Human time, Services. CARES consistent funds in payment. health the the September, Based that at to Medicare the moves companies for As be other care receive payment. this second that XXXX, by Health million retain government retaining able would that changed concluded HHS In we such criteria

criteria, compared Now reversed based with were XXXX. IPO converted the and paid common outstanding third notes expense We to last the September on XXXX of in through recognized notes we debt stock July due These the year. to scheduled primarily quarter for million Interest interest $X.X XXXX. quarter previously. began third million connection XXXX, repayments XX on of our have of $X.X this income that in in monthly convertible change the into decreased promissory term June of down the in

entered mark IPO. quarter related last recur the of of items million, primarily were notes prior convertible third convertible gain to year. with note above The associated certain to $X.X non-operating mentioned into $X.X to just million not A did debt XXXX this included separate transaction a two of market which losses year's and that extinguishment

of positive million to $X.XX business, X earnings for per for of for negative million the ended attributable September share XXXX. flow increased income marketing compared to planned third the for team. was R&D million primarily X months XX attributable XX per million XXXX for XX the ended diluted and loss acceleration X September $X.XX was to mentioned in XXXX. prior-year to quarter previously XXXX XX to months net the Operating was months loss share $X our ended of cash sales net period, $X.X of ended and the the the expenditures months the $X.X stockholders the in common compared compared expansion reflecting Our $X.X investments stockholders including September common X Diluted September

$XX.X For period the to million compared September XX months the $X.X XXXX. cash operating generated million ended of XXXX, X same flow in during we

Medicare was a cash until As million an XX ended a operating XXXX, delayed flow reminder, XXXX, legislation submit has recruitment for the against the from be payment from period our start $X.X XXXX, the continue Originally advanced recruitment start benefited September future applied recent reimbursement. for CMS, claims to to XX which that will for of which of of we will X August months. April of up but months

Excluding XX in million measure, XXXX payment, September compared operating was ended adjusted non-GAAP XXXX. our months a the period X the the flow, $X.X for $X.X to million cash for million same $X.X

near to to continue we support and continued Finally, to cash I'll call $XXX.X XX back growth. portfolio, our cash of at and confidently believe equivalents and sales the marketing invest in approximately we over growth September allows of long-term XXXX diagnostic our build We cash R&D had dermatology activities, as to and current million. for Derek. position the the company turn now us

Derek Maetzold

with summary, third results. third Frank. pleased our our In the with strong quarter, we are execution you, quarter in Thank

We continue and well. growth initiatives drive are to our optimistic and position our that investments growth us will

Before we concludes with dedication skin Castle. long-term remain lives we you well remarks. we to to of diagnosed the now Q&A. people Operator, for our express continued cancer your near-term is This Thank It gratitude and through ready to interest our my that success. to positioned in their move want improving for I Q&A, employees. for on are

Operator

first of the Our with from comes question Thank Instructions] you. Canaccord Masucci [Operator Max Genuity. line

Max Masucci

question. Thanks taking for Hi. the

are just to the our around. So to says, COVID-XX trending and resurge growth. with the a better clinicians at see this just trends Can recent recovery how towards that pandemic QX? it's with the And equipped out of time played what are then the return you to nice end for DecisionDX-Melanoma sense things give deal us volumes

back the to in avoid we declines that magnitude of observed Just of April. sort

Derek Maetzold

satisfaction I'll color. part question. add Yes, probably for hi, Max. maybe our answer some and it, Thank you maybe but can the joining Frank of for

is get think a any sense of we kind in in returning do end patients of first is terms of the sort visits fully what's to haven't rate honest. a -- of fully of a sort October, return be about of sort third third-party Symphony Health from of that pulse trending quarter we our data the of of month to -- diagnosis. be with November kind on We to purchased happening post not And marketplace physician do accurate at takes

really Is -- are most out. data extends of despite I a in mature retraction pop or of the of basis able COVID what October. that of first Symphony on it's discern guess cetera. Health to there any although So qualitative end into -- the et what and need accurate national September, probably Maybe to September that week data appears show, we weren't sort any visible up August sort having cases to

business, really Obviously, diagnosed care the lesions of patients about that out is us the Castle couple Frank, trends, of and give degrative XXXX lot who the a actually you but good in today. negatively months terms from as if not practices will a fourth thicker patient the were be impacted. most deeper, more of side care more of where seemed concerning improvement significant you time into ever and think melanoma able we without it's are we hopefully a upside be they quarter get early perspective. and I of patient that is it of further in to? that it on terms want a business, means had sort to in they get part, with a too I and about once by for the diagnosed I not diagnosis commentary more year, there's very that some there hasn't are guess think of So to in physician concerning going Castle's exiting optimize in worrisome more-and-more those maybe flow the to of trend patient post test really, of sort sort aggressive nature the XQ translate up any these we had solid volume, could last summer to of end

Frank Stokes

I Hi, Max. Yes, think --

dual I sort think impact it's think I seeing still physicians. this -- we're of of

of say, You're too. look to book that the doctor the and manage and cetera. we're appointments seeing and at person from Well happy mine some yours? rooms, And don't I'm double et multiple fewer previously probably I next ever when or a the been to terms can patients, they logistical you've know of you if to o'clock concerns consultation is that with o'clock got was is him XX appointment, XX something awfully

is that. there then some out just getting go real still there medical concerned a that Now are cases In into some And all. finally, to -- at patients and limit are there about few are a a facility.

rate So see fall we'll the in case The of that certainly in. through stay the of to stay news stubbornly eventually COVID but wane, sort begin cases stubbornly high.

continue it think I to impact people's mindsets.

Operator

Schulte our And you. Catherine with Thank of next question comes line the from Baird.

Unidentified Analyst

appreciate Tom the actually is this on [ph] I Katherine. questions. for guys, Hi

from the with on docs, mean, guys guys qualitative did a previously -- you've making responded switch. to sense those Do a you gone week gone the conversations curious, that the fourth ordered the to launch, it's DiffDx just clinicians the you are who industry have I official test understand how couple of And do them and weeks first have that what's the how a since and launch, on hosted test? webinar. data I presented. had guys you just you the they the was a get maybe and market open been So been since feedback

Derek Maetzold

give that's going be We clinically to DiffDx-Melanoma week. too guess available of On made meaningful. the test to Monday I on really early one our test, last anything

was guess maintain were and XX that and of both looks then lesion And it get we Squamous did it that before than time, I things, more zone. boxes, believe into I market pursuing and a ahead ago. just there. target hit and And possible part that profile specificity, the we guess couple a scores test from Cell maintaining of as So intermediate melanoma. of result the both as with get guided So the -- data you for actual as the in of I it course time either majority really kind of all only And about maturing those we market early saw now saying the a in we success or started as come conducted while most call. you did that, a our for the towards very course, ever like you we specimens accuracy you risk actually over really of think a I that of looks that company, we're I Flynn. kind. XX, research sensitivity resources. some the would with to back our was of that market we majority, were significant years say can our a sent vast benign it days those narrow X.X, And the selling back reduce more product so sort biology technical up have think of today. investor up to a as you the of summer actually hit an biology, ago, achieve like that of fall, I would high X launch can our DiffDX-Melanoma when rate? malignant research narrow having And we lines lines we days Carcinoma mark can the tests able that's program, we the which like you the if intermediate

the to it's marketplace. Now what going in do happen we think

we last perhaps of that basis of availability on at first move using or we uptake. of out have two My or been is look month the of routine sort clinicians sense who kind will have As either sporadically. and week the a of

expression profile other The gene test.

and them hand obviously any reason comparisons if conversation, our there be the show there I saying is been no to and overstate and in up data think product dealt. But go we and careful, walk is don't we have I kind head-to-head ahead, honest because profile. trial this have target of think walk you've the to

all I hit having us our again Is your asked evaluate interest that's four ahead year, it. cylinders. that You in over there have because on we patients? go next done we and very deliver, positively, to you is in to come think everything test here

the -- X,XXX DecisionDX-Melanoma surgeons of think sort I dermatologists X,XXX, our we the have tests. is quite which say, who aspect, And year, real clinicians, in to what last over and final awarded is

ability for the quick reasons the dermatologists DiffDX-Melanoma test, beauties was of producing can us initiated. of That's test, call. patient that since one develop the the and and peers up, lining over ends of a of melanoma some the as so really because the is your the to malignant the One can results our up. planning pathologists DiffDX-Melanoma to you why very have that and turn DecisionDX-Melanoma punch, test a rapidly like the very treatment hand dermatologist dramatic We to and encouraged biology tumor be right that's looks make a one-two around signature

Now of interest as a the best patient agree in dermatopathologist, what care. you that's

in what equation. ability of openness rest I have we think near our of I a to I and try initial us evaluate a and go product our that's of results So things the make couple of parts there deliver think bullish, ahead study and very to validation drive guess, fashion the out will terms that our in

positive quite So there. we're

a ancillary product understand trying the it's getting What's and an have gene a move That benefit the I who to those of profiling out included in that difficult of in more embraced in some marketplace I good to bit even dermatopathologist, or did are the we're say, being have test. request think non-believers the part and trigger existing the them of get also that how some a kind was maybe we'll early accurate [indiscernible] these was, from studies a there validation longer lesions that really, having of to that diagnosis. expression of aren't take of feel have tests. to think work as to evaluate a -- appropriate non-users of too kind who marketplace really to not the to

get help a would confident, diagnosis. If about expression some encouraged value better those more of accurate gene much include me to it you I using to say could would profile make that more I really to guess, test the think sub-types more and of

couple to tackle market And Tom. here, back all here how those as another early to we'll said, I were trends successful. tried So I look. have things, the of think we report months And we

Unidentified Analyst

I a color. follow-up the here. could appreciate add I Sure. If

missed updates and given specific the tried more that make limited -- I think maybe quarter. to new seeing reach from there. guys access increased They trend are you the perhaps there physicians any still this number additional force? have DX-Melanoma briefly may sales How they in related had to to are more and limited broadly? access the does ordering I commented on for

Derek Maetzold

compared sort sales quarter. quarter maybe force second to So trends third of a on the

so you under certain largely I would country -- dermatologists the field certain sales across and the shutdown the US, standpoint speaking there, be orders, of not both and to different spots as the guess were back out I territory I to of the whereas force things the you're country, open. business in quarter a bleeding say, patients, as at quarter a central in second different in second had also from every times where a parts seeing July is extent. in So both strict think

We we third guess as territories for quarter think or all see would I territories did out open the business. XXXX. say I in all of business, for you doctors open closed

I in calls. think zoom being or being or clinician calls made sales overall telephone made or we calls that virtual then calls saw person more

second trends So throughout are quarter. I sort positive quarter from think those and the that very third improved of

looking opens So fourth I'm seeing as out forward, quarter we're up. back

is And the number in cetera then where were melanoma to one, having the to compared they compared era newly that Either carcinoma where we've believing close cell and of I prior practices just techniques, are that's clinicians just space to constraints getting back probably seeing to data quarter and third sort they diagnosis to third-party to still down 'XX with cell time used to pre-COVID versus not of the to even same in of but pre-COVID seeing due et squamous cancer sort 'XX era. are and basis XXX%, getting you're exam COVID back lower patients think difficult third office of see given a melanoma, and we're COVID we I the number also also skin of got room a that still some period. -- diagnosed quarter cleansing the during COVID in day, indicating during time. rates and

maybe saying their that that's doesn't is So But on. think to be go on or being improve related we Certainly, it population and bump all sort ahead as away. sensitive a go more I melanoma there go sort elderly more cautious this seems again, little to versus could skin -- a about a of and expect of bump we that returning a for cancer.

of to for if or So arm fore looking on arm it your go-in I at couple and or cap go going weight. want you're looking just you later. to that's time going sake enough in. I in rather early make occurs hope ugly enough point or call something even some weighing, months. at do or They can out and big you to? it for the a do get At Frank, your the your you're than to patient

Frank Stokes

QX QX think be we we in Yes. of physicians who means And doesn't ways to to team, in fewer But had fewer only rather virtual that the in pool that question great. quarter, is fact to interactions fewer ordering but of finding having anecdotally, physicians virtual last mean this XXXX. folks we despite be to had new which than It just interactions new they did XXXX our think are on clear answer the year. was person, pivot live the and field with than it's the quite ordered just We to clinicians for But we quarter, that are of in had it. physicians clinicians. just first effective. time ordering outside much I the a tribute We

Unidentified Analyst

helpful. Great, Thanks guys. very

Derek Maetzold

Tom. Thanks,

Operator

with we a And Genuity. have Canaccord you. Masucci Thank follow-up from Max

Max Masucci

guys. Hi,

out got think I boxed I there.

you guess can the are to nice early come trends and early sense sales how DecisionDX-Melanoma the see any volume to just are to cross-selling I seeing? -- the starting adoption launch? maybe I of what there it's in. similarities and for early, of any DecisionDX-SCC a given give Just it's And the these days sort us opportunity you're differences that early know interactions compared So but early going?

Derek Maetzold

can on color Yes, thanks. question, Max. I DiffDX-Melanoma provide timing test, the way. good than there the That's because the more I of a can by

I want here. get think, ahead enthusiasm to So don't of my I

I for think to launching new is diagnostic anybody. forecast tests difficult

had of mean of out can't essentially the companies full I base order is as for that at new sort I'm in first the you we've period is think earnings that map that across kind more. of or on I out doctors. even interaction tests that. forecast first think normal a flow I on was sizes, terms even the the I in that. diagnostic coming market two to am to months not orders seen launching similar -- as fantastic, XXX pleased other marketplace, of compared we've when other difficult you -- far how we if two of access, matches what in just concerned. sort the looked tell XXX And tests a of I of patients diagnostic of not top don't months that of

a to a start. think to start. Don't but off it's a it's things become good a very good So lot, very over it's -- off I promise -- very

the was I educate hand-in-hand. a who doctors rather -- have to in side their into one make and begun those with try have to more around most test squamous cell key versus our we management that on a of and number in of doctors And next X,XXX, order who important business risk and being we DecisionDX-SCC or manner say, a thoughtful rolled doctors, to who of ordering measurement have goals number the X,XXX, lot. incorporating should X careful, year the be of are are our turn position habits SCC at One factors as we that who that DX out having of of commercial test the of go with far are XXX the sure being practice the the or number tests carcinoma ordered. would patients But decision XXX doctors XXXX end clinicians versus

even test, far literature, the listen reimbursement push our business if comes year, think to order X, a to X sustainable to a X, a more as I base physicians do X, medical evaluate, diagnosed test of really we're through. once, heavy use squamous frontline since that would having I number wider show XX and of in understand largely that that trying through is you carcinoma X, dermatologist to cell by is

positive of or in two very, it's So I short the very, October September, those how this think us, period sort especially for since year. nice time. in of, very guess I But don't know X metrics first, many or weeks. Very that's that are very weeks X I with trend. been

So quite positive. that's

our the I the physicians that think majority ordered have that or we of vast test. majority have who DecisionDX-SCC the fact

DecisionDX-Melanoma who are our test. using doctors current Our

number by with supports terms still fourth with customer you should skin and significant our of customer in call providers, a seeing the a really, quarter launch going say our us channel a marketplace. And impacting wonderful seen. patients, turn opportunity is -- next up in that health number test a X in build already that care kind quarter we that's just in things of what how fact really to of of have or point see next be the me the think ability it's needs to thesis, the 'XX, think are wonderful months All of later kind DecisionDX-SC that and I a first to and that to be quarters very XXXX. you X a and then leverage dermatology early we around if business I year cancer, like sets -- the of significant those in

Max Masucci

Absolutely.

give So paid payments that network -- pipeline unique achievable is any basis DiffDX? seek just for influence your of sense with to of for your if Can launches? a portion desire you're out-of-network getting factors this may test on your a new there out DecisionDX-SCC and some commercial you volumes Are payers? for an for DecisionDX-Melanoma us

Derek Maetzold

Yes, Max.

diagnosis. the two you at the actually ship some We we time the payers. is we it to that'll do So to we've bill have those your tests for revenue our won't evidence and policy only We adds we tests. think commercial new appeals The process success is accruing revenue referenced we'll as that think some clear through report, be reflect -- test will -- the test. we are know, collect the the be And We there. value when point, new cash. we for the we've

so bill appeal at through. we And push that and

are take got going how and you So to to work will know, don't our reimbursement test, we've a know we as And first appeals it hard get we're think strong that. to on really two where with but long I I claims, team.

we're over. to those knocking they'll start So eventually that confident begin

Max Masucci

for Thanks me Great. in. squeezing back

Derek Maetzold

Thanks, Max.

Operator

comes question next from And Nam the our of BTIG. line Sung Ji with

Sung Ji Nam

and Obviously recent and patient taking that or some thanks for another there Hi, aggregate of volume ahead terms into volume one the in a was wondering, might XXX? research for DecisionDX-SCC. the flow. was given growth disruptions be of we the launch says, in from understanding that terms obviously good of Maybe anticipate question. there continued built should I the backlog know,

Derek Maetzold

or US, large over I a XX, do have collaborating through quarter. a I XX, have the think did We question. second the in large think centers of we Great number

a or involved say, of so Our patients month up are DecisionDX-SCC actively are in will out it not two, your is available example. be for this about availability, clinical did or available test, who ahead hold investigators clinicians we our hey, go

talk DecisionDX-SCC DecisionDX what that dermatology The is commercial really part -- because kind So the majority se. turn you the educational I doctor I people our say, every to an And of then about and that Decision-DX in start of of reflects of sort focus Melanoma at skin revenue how test solid launching equation as as that launch about call, are just is can ramp think given the per out the with growth our one certainly moved of to been the the them or that SCC that, driving the of that XXX Melanoma. SCC. cancer holding my like hi, the vast the saw through is sales is thankfully, along say, -- quite any call that solid or environment the as physicians with first here request launching normal because period DecisionDX and good. have have understanding comply looked In we and been is and you've is reimbursement email this that's interested physicians without in your curve, to say pent-up talk is in the that? or I complying demand, some most with surgical sells other that's But And that other need corner your melanoma order. test. oncologist we and force There during complete this

sort launch, move So the in the entire necessarily forward sales inside all XX I and think on as have the didn't we of the MSL sales inside representatives we group. here

end they're early SCC there on and DecisionDX introducing Moving August to test on moving of and the melanoma the then September. were first at They SCC.

September I and So that us ramp gave through very October. think a gentle

Sung Ji Nam

you there helpful. just question looking you -- very clarification that determine for consider other for the appropriateness are at guys to Are or study that's Great, biomarkers of therapies. expression might DecisionDX-Melanoma a guys the doing then that you still incorporating? And adjuvant gene profiling are

Derek Maetzold

protocol So would I the say. enables guess, I both,

to looking currently we're test adjuvant obviously ability the at therapy. should ex-melanoma the of identify be validated the on decision, So which end patients market

questions analyzes all properly at some including additional biopsy are liquid the also genomic to including we also make tackle poles can and time. sure one We

Sung Ji Nam

the them physicians. And your underway help Was from then Great. to to for identify that lastly new DiffDX for in existing currently there using terms are physicians of additional physicians, adding it's you're efforts -- and melanoma? great curious, that existing are patients me, see

Derek Maetzold

time, that I'm -- repeat think Let me have not one I you

Sung Ji Nam

I to if kind the figure was will. sales, same-store kind you just trying out of of

physicians, was mean, physicians might -- identify you but new patients to wondering are still that adding help is other there from? of lot I if that existing opportunities on this, Given your benefit there a is still

Derek Maetzold

Okay.

think it's of question more asked. the that's plenty to which much think dermatology, there marketing got growth. help But practice help I of skin cancer about Yes, activities, for would we kind not like you're same-store room certainly. productive I talking you still initiatives our sales specialists, is

ramp July almost adopts new patients. So the test. ordering evaluates as a X third ordering or any probably doctor and time with our always That's XX quarter didn't start certainly clinician out somebody in first

tests. quarter customers the opportunities our existing are -- see they hopefully whole usually our doctors appropriate at of in do some time opposed as because in are ordering We just ordering third productive our during the to to So the expand more quarter. use

they some there or node for who use only physicians clearly biopsy, So may practices for are be example, lymph the referral where in currently sentinel initially our people test or dermatology base. are

decision a their call lot has X.X That's or certainly X.X dermatologists the we those melanoma invasive but they that initially their sort melanoma anybody a seeing no not in enough, so surgical is start millimeters. and rated, it we melanomas about thinner about there ordering worry are about see that and orders millimeters test a referring between who see X.X from I the of X.X, potentially those risk X.X low said, A procedure, They're somebody node that's order that's for to So concerned thicker. made lymph sentinel need in risk where minds test, our patients, the also being that thinking don't out our with to that procedures occur But those pick number. it. with melanoma. where of because and patients X.X, significant threshold diagnosed they they're recurrences occur death and they're

may see see, times well begins fantastic conversations for commercial happens, patients, thinner a that Care, good Can many X.X Patient for our could to over of And he only with of in of Doctor discussions that individual in value walk care. please. of X.X representative test. test hey, Maetzold data. X.X patients sort our lot user millimeter on the that, there's -- so sold to incorporating same melanoma and part in this which benefit our but a their of that patient uses I look And test that of there sales when their store to a in say, own talk millimeter has our Dr. each or effective pretty think is do our physician range. would couple seems message is And to tailor than efforts example those be we using from teams' the and are He of who the I thicker about we if arm or

Sung Ji Nam

Great, so thank much for the you taking questions.

Derek Maetzold

welcome. You're

Operator

comes from Souda of Leerink. the Puneet next Our question with SVX line

Puneet Souda

melanoma. and quick in volume estimate here. Frank a The cutaneous couple Derek, than little Hi a of came bit Yes. questions lower in our

the sort person. in on I of question of the volumes facilities. that on of clinics you're from We're sales to expect tick fourth the wanted just in impact the patients, an Just asking number what some holidays, if And whether the quarter, patients, a about virtual maintain are should to or you get at setting levels? clear to in you mean more fourth sales little that virtual versus seeing how but in the one, things dermatology then bit doing from view any? obviously talked given a But specifically, is, to about, rep obviously the and we some access of the the are oncology Do challenges those it, up accessing second of we sort this, think sort quarter And here? top immuno-compromised different. seeing same because [indiscernible] rep the

Derek Maetzold

Great questions here.

melanoma each look year, our check if and answer importance third missed correct So can that quarter of the is I'll see kind Frank you around speaking, diagnosis same Historically usually we usually see to similar last orders in my certainly of up quarter we or of the then to if year, any? years at writing overall ballpark. double and or fourth the can try several the last to of that order what IPO I

of fourth the given the do to third kind So non-COVID similar where quarter. quarter the third speaking, or environment, in quarter see a a is year, of any we typically of seasonality year

in first and quarter, fourth is quarters, for do sort growth then next and you the your second speaking. relatively quarter the diagnoses the quarter of The see three it's similar when flat to

to in we mean, would said, the rep first. not being significant I normal of That quarter. year, So fourth go In a to the a I is rate of a in one diagnosis rise quarter, expect think question that the melanoma. third access

third over we a So of I across more it to part improve month-to-month basis. to that quarter to we see see certainly in are getting returning practices think the of related did just well, normal can second And and that quarter second saw as you quarter. was Part that, And is. data with rep whatever their healthcare practices is, public national the board access third quarter, compared comfortable. state to improving throughout course trends of the certainly

to we that time. expect over is that modeling improve would to our So continue

Now, and relative to tough stronger I how impact the calls. September fourth resurgence mix that changing in the the concerns virtual calls in of gets in-person And versus much on quarter, think October. of to it's of say sort sort COVID

they of to have who delayed in? come to However, XX,XXX is, number had I think a of on people, melanoma. significant estimate potentially the end up come diagnosis you assume a of We in quarter. it's back have too patients. When that aggressive they do the fourth

lot. -- fly just doesn't is All a whole of it just credibility a not past sudden, it

think do We at quarter. in to a diagnosis be rate year we throughout quarter quarter of in portion sort be vaccine of to it the unleashed. or know given become gets a going to that model all think terms tough of -- you is 'XX. normal But to some sudden guide I quite in third see of about was how So population that's they I and a is fourth post fourth should of the kind do What melanoma. don't around of know of the a

seeing are compared access representatives second Our quarter. to increased

carries quarter see up you think US once through marketplace. somewhere the blow a I that to fourth in

course see would call of what More all fourth the going trends. impact, returning that's mean over that details, to we pre-COVID sales because we're closer positive, quarter. is that closer our the than So to and

the of these patients properly. melanoma is one get more diagnosed missing I probably important dynamic their think

are the the fourth is number why really usually the got third year holidays I of of working in the here holidays think reason and because every maybe reduced quarter. of quarter to you've fourth quarter is, flat kind days the

the in actually out want but So diagnoses increase to? gets quarter slight third, days. in a you is than by normalized there that fourth office Frank, maybe

Frank Stokes

a -- down. to Puneet. I mean, has certainly interesting It's morbidity I rate it we like -- COVID see. the but the has looks will gone No. be it nationwide agree, case gone up, maybe

certainly their get effectiveness glad and were comfortable we people And today so helps that on maybe announcement are to see XX% Pfizer's vaccine.

vaccines points, had better heard effective Some That's of where would bulls to maybe eye up we XX% Pfizer if the they be data the early than they XX%. certainly when the first gosh, XX% started. put and I to can guess get

to nice that So was morning. see this

Derek Maetzold

XXXX if soft think of the I I I I other the on missed XXXX is. growth I Yes, melanoma to third is terms question quarter your only relative there in in think view of don't our thing, volume. rate know,

think consideration a XX% you take jump drop and rate what That's last you in healthy diagnoses. I the that over of the into nearly year. pretty new take if

because to And good feel IV forward. -- patients disease, diagnosed of [indiscernible] and phenomenon, is we're strength I a or overall see going going those believe that time reduced temporary business don't the about so with lot going stage a of we the being And which happen. or has to from point are diagnoses

will -- I back, sort when think how. they come the think I question of and

Puneet Souda

there. helpful, the that's thanks Okay, for details

well, to in -- from again lower wrap to question. try a another of bit ASP, came light XXX I'll of -- versus number sort in and And a about XXX, point as little second QX. from in our it is estimates The QX

reflective that anything is the payer this Just just Derek, it population much of maybe clinics commercial then and population Is said LCD. November as the to was there? XX not Noridian expanded wondering, if on X. Medicare note you as commercial data population,, is compared there December And accessing the the patients. the of to is,

If can book should when you cases? these on can when expanded for looking we potential those the elaborate revenue start for, So two. you date at you. Thank

Frank Stokes

the quarter see there don't are anything, trends concern. I Puneet, yes, So ASP in caused nothing for the us

flow vulnerable. reluctant does is the we're move is to a I think to number little seem most is going that most base, It by that around who back get the population told definition patient who into bit the the are older quarter-to-quarter.

move quarter-to-quarter, So And little there driven LCD? modest there impact about see have bit talk persistent that is but I a of we'll that. But or nothing us. mix a that you durable may will generally, suspect strikes it amount there then

Derek Maetzold

On the LCD.

regulations. Medicare So

article and and we effective So XXXX. of expanded to certainly LCD be number the have for full one, coverage months XX expect the the billing associated

of of those, timing both December November MACs. the and Given XX for X

the of workflow data the to of date a like date effective taken. majority that for time. or was important terms of surgery that's going or test ours least And biopsy thing our the the at date, a any way In be the like of really Medicare usually in calculates date test most the service of is service is the and ours the

if would what Saturday, is, a taken Saturday to November November to XX. going service it's was XX on test that with dermatologists somebody Sunday, even and had dermatologist so had would or a somebody date Monday, XX be that So is test a the that we went a think be mean if the reporting of that biopsy into their I -- on a

between at of melanomas looking I X are is, what So here you're weeks diagnosed mainly that think X somewhere probably and in December.

be ends be fourth rather a flushed sure up would that X LCD. quarter. LCD, Medicare covered into are billing X.X as through that will to to X-month have. think that group laboratory group are from of the a make Maybe think be probably and to under to amount we paid eligible But for expanded a way I under going I the all and standpoint. submitted being So of claims than as be think thing, is that the kind -- type X having Certainly modeling that our always for weeks the cases quarter appropriate a the months

Puneet Souda

you. thank Great,

Operator

Derek President Thank to further remarks. back and you. call now will CEO, over I And the turn for Maetzold, any

Derek Maetzold

Thank you, Andrew.

XXXX a earnings I again call. good continued interest today, day. joining our for you Now, for Biosciences. Castle your in us and quarter thank this concludes third Have

Operator

This does may conference. now participating you and conclude program, the disconnect. thank for today's gentlemen, you and in Ladies

Castle Biosciences (CSTL) 9 Nov 202020 Q3 Earnings call transcript