CSTL - Earnings call transcript Q4 2020 | Castle Biosciences, Inc.

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Operator

Good afternoon, and welcome to Castle Biosciences' Fourth Quarter and Full Year 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'd like to turn the call over to Frank Stokes, Chief Financial Officer. Please go ahead, sir.

Frank Stokes

good and operator, you, afternoon, everyone. Thank Castle financial results to Biosciences' fourth XXXX year full and conference quarter Welcome call.

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

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

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

Derek Maetzold

our afternoon we will and close our and you, morning, test with launch highlights I the results, Frank step you thoughts remain launch today integrated near Frank. trends, XXXX, we recap like long-term select This represents fourth regarding why today. this ability But this would I melanoma. announcement our quarter the before on joining for patients detail from And of in discuss will started diagnosed our to significant then we growth. financial believe then significant get Thank of Thank and care performance. result. achievements everyone. provide discuss made provide us current confident additional a forward in the create to Good during on We cutaneous DecisionDx-Melanoma afternoon,

test X,XXX sentinel slope The here cohort. our predicted test the DecisionDx-Melanoma with Specifically an of DecisionDx-Melanoma with analysis, test a we intelligence guide of test sentinel now iXX-GEP score. tested node lymph based algorithm, discussions and in is outcome integrated and outputs what or artificial the cohort sentinel prospective the validation node a artificial between lymph result based procedure. in call an test walked by thicknesses. validated melanomas results What's separate The and trained independently patients linear order and recommendations is then a iXX-GEP algorithm consecutively upon discovered exciting of provides features the lymph based report near traditional more a patient's based all relationship precise regression that on observed intelligence iXX-GEP perfect validated provide for the pathologic result positivity and report multicenter developed positivity in patients surgical integrated actual an to to of prediction biopsy clinical individual X,XXX calculated integrates cohort node neural independently on network

an interactive designed score. DecisionDx-Melanoma pathologic launch to a is on to this on discuss features to year. the clinical patients' to the application based iXX-GEP expect test test platform The later have their with app of mobile also We the web allow risk and integration clinicians

this evolution test. excited DecisionDx-Melanoma are We of our about

So level? XX what diagnosis of predicted that's NCCN old a a a a statistics X% to the integrated sentinel take important is do advanced sentinel patient would sentinel that or positive this not practical population Let's tumor Using Breslow and guidelines and X% biopsy on be using this than precision of individual with offered A recommend year with features has node than of because in example. likelihood node result specific male lymph a a patient mean AJCC, lymph with millimeters. less cutaneous patient thickness have pathologic a those test biopsy the lymph from an result less clinical melanoma node X.X melanoma that had depth a alone, based procedure positivity. patient

score range Now, would let's a predict clinical same a X% Class, score node if at out the we accompanying of of that's to class, is pathologic a look X.X, by than result X.X% the less that is our company class highest same that with features risk and year risk receives class our old DecisionDx-Melanoma or Xb XX then, test lymph X.X. DecisionDx-Melanoma result now likelihood patient. of risk A alone positivity patient, But he of of test test and male of score predicted X.X, DecisionDx-Melanoma take our tested integrated sentinel within his However, lowest result, an which test decision X.X has Xa now

procedure. likelihood features under positivity biopsy to having have test. alone, clinical a not just patient, pathologic as DecisionDx-Melanoma score the Based to of again, result X% XX.X% benefit X% Now this compared have profile, known of less with the our based features, class less the sentinel different than they X.X% of with mentioned, integrated to likelihood node lymph population upon positivity without clinical compared risk with number, pathologic guidelines biology and managed offered they and the would is than the but same and patient tumor predicted NCCN been likelihood, have that a test positive had of been Xa similar a I to would with the if

However, the NCCN above to that finding that by that XX% which node had node of a for lymph a test that recommending this precise is in positivity lymph patient, procedure This patient. offered using is a more positive on a biopsy have will care. clearly predicted be threshold our significantly DecisionDx-Melanoma they XX.X%, sentinel sentinel uses patient impact

allow of based node launch care. result today's into is lymph of personalized our integrated in more to move patients to based risk more precise, and test order more and to So DecisionDx-Melanoma personalized medicine of precision from sentinel provide population precision the prediction based positivity to designed

commercially tests in development. directions. and other are our move it Biosciences. available tests are exciting to the We finding are our same at These Castle tests outcomes in Both

Now, cancer our future tests, a believe what year skin express more decisions. better by focused the clinicians the And over occurred to volume, we our through allowed positioned as we over And of Castle providing which growth, team. achieved with with XXXX delivered include are We in despite year. This of thankful XXXX. new and well always, of profile patients to am I'll XXXX us valuable this the the XXXX, revenue compared remain strategic shown initiatives, X%. growth includes launched of and I'd growth last half gene for than half I further treatment melanoma resiliency Key test dermatologic and cannot two reduction In strategy pipeline in commitment long-term diagnoses the unprecedented to throughout XX% XX% informed of genomic in navigate to successfully like XXXX, of second dermatologic expression which second XXXX. report including and work on components in organization, XXXX. our information ever improving in I launches we and moment. proud our the lives the hard to our two in thank team's innovative discuss near a growth advanced how tests, grew

market estimated is faced $X suite for significant gains US I and tests, moving As even achieved well cancer than the milestones pipeline to year a and COVID-XX. This that one our We medicine billion. evidence challenges toward as of test started the of with described, any end programs. We tripling market, of we all a as XXXX so three total just new skin in from reimbursement XXXX with of in these more addressable extraordinary initiation precision areas. our more developments, year, achievement

recall melanotic to patient characterizing launch with features brought with aiding of the DecisionDx may cell cutaneous patients diagnose ability to test with our tests, proprietary management We clinical difficult dermatologic tests carcinoma, these to have then potential diseases supported XX,XXX evidence has XX our body to squamous the further skin patients genomic lesions. need, our DecisionDx-Melanoma potential with where one for identify diagnosed high demonstrated risk Castle's was diagnosed melanoma, decision unmet DiffDx improve house and You designed two cancer more for a melanoma high cutaneous with validated additional in XXXX, the profile US alone we test significant evidence and having developed DecisionDx-Melanoma close proprietary supportive use reviewed patients DecisionDx-SCC, of with or published additional XXXX, notifications. over significant times ordered market. competitive provides XX the body been in for by expect We December and for advantage acceptance gene peer already publications, tests, believe entrants four cutaneous into a us to XXXX and reviewed publications with in is In existing our market. received of expression our peer expanded through articles with melanoma. XX, and

remains it adoption key continue reimbursement We of commercial invest supporting a strategy, payers. our our evidence as by component by development, of expect to tests growth clinicians and to in

of we growth lead reduced experience a although volume to which are we we is of to Turning believe driver, XXXX; result seeing headwinds of including COVID-XX, DecisionDx-Melanoma, melanoma. some to continue cutaneous diagnosis test due our to our current report GEP revenue rate, recovery, areas

more approximately XXXX. of melanoma or than compared to down discussed, XXXX were previously I As by XX% XX,XXX diagnoses diagnoses

in and to quarter closing XXXX. continue mix believe is second of this practices of a temporary to volume patient of the and due We our dermatology third

the the health to at was back believe half the as well ongoing melanoma, in XXXX. visits especially care significant shifting we of the of telemedicine in in person which a factor XXXX from general reduction visits, early in diagnosis and As

in a will high an patient a regular their or physical will identified care annual for be For a example, identify mole, clinician melanoma. as and after person blood diabetes visit, typically just in primary pressure, testing which would the concerning go

However, with believe are visits, place often. identifications we telemedicine as not these taking

the and is does melanoma A reduce place delay biopsies pool diagnosis test by in after diagnosis eligible of DecisionDx-Melanoma our that take of of the rendered. Given the is melanoma physicians patients. ordered

in of and the experienced to impact many COVID the US we has practices in severe weather we flow dermatology the patient addition believe to date. have the first impacted quarter In of parts

to volume may historical and quarter first COVID, weather softer fourth quarter quarter the given continued of the DecisionDx-Melanoma flat recent we test results As XXXX historically, generally reported our XXXX. from recall, Therefore is our seasonality, to be first quarter. the first you expect than quarter fourth impacts

in the don't of to expanded due the quarter our of for other of the to factors full effect volume the of XXXX, However, DecisionDx-Melanoma, revenues first expect compared to quarter first sequential in fourth for a we quarter softening first in report the and XXXX softening of Medicare of quarter into commensurate the over XXXX translate quarter fourth LCD XXXX.

we can't our the in improvement rate recovery trajectory missing second of of the the Although diagnoses of these of into XXXX. for anticipate volume XXXX predict and growth half we melanoma,

will Although, we that not it be expect linear.

vaccinations by the We detection and the Specifically, not later well be medical in in linked impacted timing diagnosed the of outcomes could as be the were best are are of XXXX, COVID patient patients, return XXXX or those we that as XX,XXX to person who in who care. diagnosed of to both estimated majority XXXX, early to expect early cancer. which not know the diagnosed in XXXX,

outcomes, best rather are these and So patient we hopeful diagnoses happen later. for the will care sooner that than

us one is proprietary important tests. reimbursement metric with of milestones As for innovative our achievement

have CMS the rate. for for Medicare payer both year, tests this median Laboratory decision as ADLTs Diagnostic rates Advanced private based by means DecisionDx-UM uveal melanoma, or Our tests are that allowable upon the our DecisionDx-Melanoma Tests. designated Practically, and every been evaluated

For DecisionDx-UM was XXXX, rate DecisionDx-Melanoma our is for $X,XXX. for $X,XXX. at our set And rate

to important expansion it's LCD rate, you of Medicare of the XXXX DecisionDx-Melanoma. for our remind to addition In the

biopsies coverage, that coverage XXXX. the around that the LCD as surgical recall initial use ecology, subsequently that an Iridium of evaluate decisions, may received and current tested in We December XX% late LCD initial that test that draft today. a covered initiation we than to are This with a posted slightly meaning clinical clinicians covered in clinically referrals XX% expansion management management test initial for uses. frequency, estimate other that using initial coverage clinical surveillance, Medicare decisions. Palmetto node up did of those on The the converted XX% covered such effective all was X, DecisionDx-Melanoma follow in imaging to decisions. uses, not many Medicare DecisionDx-Melanoma the more et LCD XXXX. to use and as expect worked an was the draft We cetera those of to Iridium were additional at XXXX LCD other that You be time, we Subsequently, LCD XXXX, for covers The LCD lymph benefit than all our guide expanded was beneficiaries. final covered in now sentinel Palmetto patients. of for regarding more tests DecisionDx-Melanoma of of

And of Iridium acceptance Palmetto cancer complete XXXX. can We assessment XXXX. XXXX, to XXXX. of that no Palmetto test the half in The must third the two could for a the XXXX. there timeframe although I as quarter test LCD there technical second remind believe, be submitted but the and that first posted no quarter specific assurances LCD believe you the DecisionDx-SCC to submission Let's launched the operate. of of We which be under Iridium turn confirmation be and skin dossier should if now of half second of we is the posted in draft received in in was being in

submitted in also DiffDx-Melanoma early our XXXX assessment our have dossier for tests. We technical DecisionDx

for test shortened. We DecisionDx are be hopeful will review our timeframe in for DiffDx-Melanoma

and clinical necessity. found reviewed, the As use melanoma Palmetto reasonableness of previously the Mypath definitions and medical had test, Iridium meet to Myriad's intended and

our that has test expect As posted intended policy the determination in with a Accordingly, same finalization should as test. we a Myriad's draft use clinical local also coverage in DiffDx-Melanoma XXXX XXXX. reminder, be

million positive recap from and we $XX.X periods briefly compared by highlights; includes million XXXX to prior in will million of revenues XXXX. to million volume This in $XX.X related XXXX XXXX, for revenue for revenue $X.X XX% I test Now, $X.X increase XXXX. to

we test a success. to As our evolve, are focusing for dermatologic key our on total measuring business continues metric volume as

commercial DecisionDx-SCC profile XXXX As are a two which investments did response team, our growth. our advancement reports part existing delivered are in include our the believe delivered remain X, out were the capital DiffDx-Melanoma We we skin the tests. compared $XXX test acceleration makes to to November value the XX,XXX exceed XXXX, needs due initiatives increase of facilitate on were office tests to of as lay XX total performance in in reminder, to seeing future launch plan test. successfully clinical the the was new XX. together well our in reports the clinical our term, on for channels. we generated total Equally the growth patient we specifically R&D our and raises position Being easier that report important adopted of an of foundation results we launch announced our we increase expansion value it as were delivered near as XXX. dermatologic in and customer the DiffDx-Melanoma since important DecisionDx-SCC to for executed of These in expression XXXX lay efforts able to dermatologic test gene through management In the in this walk leveraging an are proceeds. dermatologic XXXX, test in company volume two XX,XXX, early strength tool DecisionDx-Melanoma delivered that when that our making expectations. Initial August to tests a unmet to in is though our in XXXX; January our XXXX, We support approximately an a million X% pipeline XXXX dermatologic initiatives tests, cancer since into commercial is net the in it of represents current And feeling. and that tests, DecisionDx-Melanoma tests in and a the high need DecisionDx-SCC

to expansions additional during successfully sales the first XX a our six expansion test XXXX, to XX of dedicated recall, quarter added availability. and completed then we by the representatives months territories of of clinical being DiffDx-Melanoma two in the XX the went commercial may We Regarding sales our DiffDx-Melanoma suspicious introduce Then from lesions, to test XXXX. dermatopathologists XX test, for of focus end the with pigmented we commercial you to third team, XXXX. outside the our

we Before the expand XX introduction dermatology we're into community, for to clinical sales actively XX additional outside recruiting territories.

Our cancer, oncologists sales our surgeons, surgeons suite outside whom the goal surgeons, of on all surgical is exit half who sell including dermatologists, will XXXX XX skin neck with approximately of points and to and dermatopathologists. with skin of cancer work entire in Mohs first call focus tests head reps,

that to including that test to we are our test report franchise. We promotional studies GEP skin also our research support We're two development cancer continued excited efforts, DecisionDx-Melanoma see and volume responsive seen our of test. is volume have accelerating growth activities, growth important our and

As we and previously initiated test our progressing DecisionDx-Melanoma both for well. significant discussed, are XXXX in protocols two

in with The the adjuvant evaluate first will therapies. we study, which personalized for is DecisionDx-Melanoma interactions

take diagnostic validate largest our tests the leading date. industry We to we and our company for as the three patient's We and market their patients' diseases of clinical on cancer, we of the available use dermatologic outcomes with have diligence, our and data significant value clinicians of exploring protocols, And are With better The biology investments successfully high of costs. initiated marketed second pleased proven to working the stringent approximately develop, up innovative which will of XX,XXX and which Together consists expression time currently that outcomes existing intelligence XX,XXX assist our to need. individual in with who patients which to treatment by process, cancers, I'm been tested unmet valuable health long branch and genomic reduce tests, data melanoma upstream collect bio developing with connection tissue dermatological to products, biology, will tumor parallel scientific studies data. believe start a add only leverage we downstream demonstrated informing of have patients of identifying complexity profile bring artificial of opportunities its our these for to Building their dermatologic ability is optimize to accurate tests. gene database to and clinical tumor actionable out this capital. Due proprietary algorithms, expertise, is on with commercially samples and position bank kind biological number term pipeline these healthcare announce tests. clinically a to to study to the DecisionDx-Melanoma. have on

of Although, stages channels, of current development, to a end a sales three than launch of by $X.X approximately can billion we in market, potentially being we are billion. five tests our total addressable only US to still utilizing TAM believe the our new $X.X slightly adding we early existing more that US the result XXXX, with

I development; as an end As tests to of XXXX. stage before appropriate we provide early said, soon the are these expect details as additional and

those and centers on our turn detail initiatives, development same over will financial results. DiffDx-Melanoma. to now to see active on business XXX initiatives. many DecisionDx-Melanoma, research call additional provide leverage a relating research clinical our We we Frank we with had the translates of will who centers the clinical back with side these I to work Additionally, to our on We in XXXX. commercial our DecisionDx-SCC sites or worked as anticipate of

Frank Stokes

we compared the reported Derek. in for to progress financial $XX.X We significant on growth long-term positioned initiatives, results. and of in of of fourth of quarter you, which are million along prior the fourth growth. in to made well our $X.X of XXXX, we million revenues positive report included XXXX. in near revenues with to million We're revenue to related such Thank And we believe pleased solid quarter million $XX.X the fourth $X.X the periods, compared quarter XXXX,

revenue offset revenue higher to and XXXX reduced was revenues test an $XX.X positive by year over full increase XX% related volume, of adjustments unit primarily periods. prior due to increased million, Our partially overall XXXX, per

organization to XXXX We and margins adjustments XX%, Our $X.X to successfully related year continue we fourth in in of XXXX, And headcount on volume launches periods delivered close growth prior reflecting for gross the fill positions. for preparation XXXX full margin as both December in million as the includes fourth achieving to of full million, XXXX. as were to and and of and to of quarter March growth positive goals from DiffDx-Melanoma, of XX% in and both to DecisionDx-SCC full year as for the open able strong $X.X revenue XXXX, our quarter of further moved XXX expansion compared year XXXX respectively, of test the scale XX, maintain had well of In December second, anticipated XXXX, internal we XX%. XXX to XXXX XXX, XX, representing compared employees the and was our preparation staff and laboratory for expansion for DecisionDx-Melanoma. gross XX% of in

significant As of cost cost our to not portion from change of a of sales a commensurately, associated in sales with our the decrease increase with revenue reminder, expense period Accordingly, operations. costs or testing net necessarily our fixed expense period. represents will

headcount associated expenses and functions based teams increase costs XXXX, with periods. expense increased million study. attributable clinical and quarter which and bonuses, and and $XX.X which our launch by for to to $X.X operating it the by fourth in administrative of salaries, $XX.X stock our compensation. and XX, expansion was personnel to marketing increased $X.X for for for our costs in $XX.X compared Our by December costs the XXXX, driven attributable to with higher SG&A, includes million DiffDx-Melanoma respectively, million and million, personnel incurred for increases support primarily million higher part were was associated in million additional headcount, XXXX year, XXXX million tests, benefits the R&D the in the ended primarily our The and $XX.X increased sales comparable quarter, $XX year compared the

activities roles, fill And as growth. we we earlier, growth and discussed the studies, for key progress invest the continue expect including in As Derek expense R&D just to key and to critical mentioned, increase of R&D initiative. well our two continue acceleration clinical pipeline Derek as a investment products, position that to efforts support further is continued

mark-to-market included of $X.X the debt. $X.X the a during to the relief recorded of ended were early year These for primarily the loss million currently outstanding in year to have facility. converted SG&A positive non-operating related banking totaled common XXXX. million no items XXXX is of to of with primarily in outstanding. certain R&D requirements the program in leading year XXXX. Act. provider into $X.X repayment on items debt is in year the compared Our million December interest funds sales, Interest $X.X allocated We stock notes for XXXX. our reflects loan ended stock Non XXXX. based XX, for terminated due XXXX, to of to at XX, July in income the convertible primarily million The in expense, extinguishment net term ended XXXX among all other December lower operating $X.X XX, also that on attributable compared expense cost to interest million notes a favorable on associated $X.X December CARES connection quarter XXXX under XXXX had December million balances decrease our effect These XXXX, fourth conversion up facility, and XXXX decreased XX, compensation IPO. which due with recognition We of ended an change average the cash and of December loan termination of the promissory the and activity and the related to IPO and the on to banking amounts expense repaid lower facility term due loan in term income

compensation reflecting expense awards periods, post higher stock expect to material as headcount. our option stock both future in additional as due well We valuations IPO in based increases in outstanding growth

XXXX for XXXX. $X.XX Our share, December months we compared December stockholders XX, common to cash was same Diluted XX Operating attributable share the attributable XXXX, months three million, a for XX in to ended income loss months flow months XX, share for negative of was $X.XX million ended the for ended December compared $X.X $X measure to XX, the million. operating XXXX, the per stockholders $XX.X cash generated to XX, compared period common December was XXXX. diluted net same $X.X Adjusted period million for net XX, of per XXXX, XX was XXXX. loss three loss in operating for flow, cash to months $X.X the flow $X.X the during positive December million for million $X.X into non-GAAP ended to And XXXX, compared of the XXXX. million

reminder, and our million of Recruitment an from submit against the period flow future benefited begin XXXX year full for XXXX operating CMS, claims a payment that in As cash $X.X April reimbursement. advance we months. will continue up from for Medicare which will be applied a for of to XX

future we and expect the claims this operating flow cash for reimbursement applied recouped. are balance, cash flow of include advanced the adjusted payment advance have to operating submitted receipt from adjusted excluded but it as as We payment and against

related months X.X million which $X.X our same to in facilities. the partially $X.X period public provided XXXX, additional in proceeds for XXXX, cash the of two to adjusted was flow investing XXXX. primarily the operating using XX million million compared the Cash payment, million compared was activities $X.X million, was ended Excluding $X December XXXX the XX, attributable to in was due to financing debt reflecting to XXXX, by cash capital for common of from million financing $XX.X compared provided XXXX the in expansion million in IPO. offerings activities by Net by majority of offset cash repayments, our to primarily $XXX.X stock, expenditures

million balance had XXXX of sheet. XX, $XXX We a XXXX and with cash at ended cash Finally, December we zero fortified equivalents and debt.

creating in R&D continue progress of that our marketing to continued body expansive supports robust pipeline develop the and genomic to our make expansion and to our continue team. long-term positioned value. evidence near sales efforts testing, to tests, we build second, allow tests, priorities first acceleration of and and believe we of marketed our of us capital ourselves our allocation well shareholder our dermatologic the as include unchanged, remain They leader As as as

the Turning formal COVID-XX, on to due to XXXX uncertainties diagnoses the related the not outlook, this regarding and time. our guidance we're at revenue providing impact melanoma, in

trajectory Although, we fundamentals our recovery, predict the of any can't remain core and strong. business underlying

building back excited now committed dermatologic outcomes. are company on the on opportunities Derek. lie and impact making that We I'll a focused turn call remain the patient diagnostics about to a positive to ahead

Derek Maetzold

despite you, In faced. our and the Thank strength our results milestones team's XXXX challenges all achieve deliver allowed strong summary, us and for of all Frank. resilience to unique we

to continue in continue franchise to and beyond, do. we put center our XXXX the everything we build the of patient dermatology we at As will

to Before want to your to drive concludes on for patients gratitude ready them remarks. execute, and success. to continue on for in continued Castle. now on my with we Q&A. our employees, This they We the our thank lives cancer. diagnosed Q&A, skin focus again to our improving express Thank interest we Operator, are to of move innovate, I rely you

Operator

[Operator comes Souda Instructions] question SVB Our Puneet line first Leerink. from from the of

PuneetSouda

for Derek, Hi, the Frank Yes. questions. thanks

fourth digit have single mid magnitude quarter, what pointing here, to should step step significantly terms we terms melanoma about in guide. that is first think full the seen volume the us the third on about be step in So can low wondering the quarter be given commercial volumes seen that obviously ongoing? line us pandemic here of down and the just are cutaneous should that vaccinations we right Is I headcounts the in expanded just with provide appreciate commercial down a for first have out sort down in think you the year, If softness and in So to in your quarter? can growth expanded the one and but you provide drivers for number when maybe the here you then we salesforce maybe year? what melanoma, that's of expecting and have of broadly of if it we year? that's cutaneous penetration the

DerekMaetzold

Puneet. Thanks

about the to sequentially when what through clarify are you quarter for. or you understand down, talking talking you're about Just just make looking sure want step volume I are I

PuneetSouda

quarter, yes. the for first sequentially Yes,

FrankStokes

that. drive are think them We Puneet, quarter Yes, of There's a mean, fourth think deductibles we so the flattish. are. patients lot I an factors resetting what are. January. number of understand of typically a of recall, most them sort that I of quarter There impact in is first

year-over-year, you got December performance performance you this take quarter. go in dynamic typically This impact. and QX, look flattish so got QX, some And also holidays dynamics you back sequential the the flattish. in weather And when we've looks year, that COVID we've quarter, see take we continued

So able we see like physicians' just continued softening sequential look on does although to some facing quantify the based it it's in visits. going we're factors macro early to and volumes, weren't

we felt there difficulty the predict of everything think commerce many all And optimistic that we penetration like as said differences. for to relates year. year we and soon seeing broader to get been the corresponding trying back just we're to it through the but of a get normal flipped, to this go I would is for resumption diagnoses they're some the reopenings. have megaphone And how Having switch have uniformly, and as get of we're to regional physician much vaccine we're with that said, as going sort the are seeing larger melanoma a be timing differences ago, would very cycle regions. within through clearly Now going we And that, audience. we've maybe before normal a this

rate getting growth be then of of bit that we And think of going I diagnoses. what is normal terms can to normalization will look So get a in predictive commerce like. to more little penetration, a what back

DerekMaetzold

be seem time. in what Puneet, doesn't aren't in commensurate party at the That a point data; this despite revenue diagnosis quarter, normal some being third we from leads said, first melanoma softening in seeing of as of we recovery the rate noted to

a the standpoint. a going when normal a is delink other worst they at aren't in quarter I to or time. some question were those who the quickly. thing here, cadence certainly a two for public third patients But think diagnosis the see second really those year aggressively assume next from this year-over-year estimated XX,XXX little a melanoma think know of not the fourth, are return which beginning bit, but starts half, showing is to slightly. going you year to the and would melanomas I do up I come would point quarter you at can last the be don't and away; they're we So from a all of those if diagnosed back would that But year, of diagnosed begin standpoint

PuneetSouda

of prior And think the time. as quarters thanks. obviously I declining revenue Okay, as Because was, going period we should the penetration then the should How in numbers we prior terms period, Frank, pickup here. period the and, initially rises, saw a forward? prior about over be think expectation that

as give just line? you're that view revenue -- how on maybe So us to viewing a what

FrankStokes

to we more for we're more our prior think to period business. as down I see come melanoma Puneet, cutaneous accurate accrual number in the rates our going continue get and

somewhat going on Now offset there be the will by that are just period having we that revenue due new be that being -- products because the all the to be launched, that, will that's said prior will collect as appeal to cycle. almost

see CM quite converge business. And products, should then then factor line. you revenue on are the to So the could in be as successful it the on that if a continue launch we

PuneetSouda

Or would online? versus today of then Thanks. the much maybe are Okay, sales those the half with you year. face-to-face how maybe the is the expectation of the they mix here are today? reps, turn second docs obviously face-to-face and last is would reps that the in be face-to-face that us doing online detailing sales of that would of time versus on my can a And -- sense one that give

DerekMaetzold

on first. come last the I'll half so Yes,

beginning over I think the way. say visits trajectory engaged quite relative we percentage or data We upon email in conversation But right, kind said, data I would versus pulled that So what based didn't text fourth capture of see, don't think you XXXX. a I and having face-to-face is haven't a you're that of really we that as third expectation quarter, current was would I the our normalcy of think in and is know phone case regional off areas of are of quarter first there kind numbers more And vaccines basis came it's Frank roll through we a of as now health the opening it and strong lower taking you away an national two a semi maybe mentioned just of but yet, opening where to for earlier, largely sales right in society care level weeks. up care see course. me providers of meetings and there's as seems two last

or press second And so all kind of and this a be environment, the to as the to I the them in second more and think open half of sort representatives would indicated, are vaccine that XXXX. back we'll our doing in assume post you've expect quarter, seems normalcy macro we'd up vaccine slowly, more in of closer

Operator

from the line question Knight from Paul comes KeyBanc. of Our next

PaulKnight

traction. in Thanks for your year DecisionDx taking you're market obviously, was? about some getting what reception time. what there the about sequential a thinking test, nice out? Can obviously And talk QX and on squamous and the rolls as The you the bump

DerekMaetzold

are specifically? squamous the Paul, about cell you carcinoma thinking test

PaulKnight

Yes.

DerekMaetzold

forecast I really despite think this were introduce cell squamous it this us -- our sell product DiffDx-Melanoma than higher standpoint. the of Yes, And test. test reception of a that's the expectations behind from DecisionDx has or the of been having of the carcinoma kind

to secondly, then cell melanoma there's first orient the basically it's launch to as to test. and go to actually about though talk even and tried forces field the continue So squamous product, test ahead a time we

again our internal that quite estimate. we the So with dynamic pleased uptake. And there, of though even were was ahead it was,

I action in at a factor clinicians that? is mixture there's a of think high squamous that carcinoma. shared because don't is need is is features, that But the next I this course great pathology of skin just know a accuracy more has been why point their patients about unmet important when that important honest more to clearly, alone an great. there's such The time. diagnosed to things. for risk So you've with the just make and staging that which of two not decision be a And cell one or

think think is years current unmet ago meeting identified So our several one as need, with significant I I melanoma customers, our clinically. test the expectations clinical actually the

cell is part customer it for which carcinoma squamous the is of I anticipate fact that don't again, think the the end what current important with at though, more the ordering know that ordering customers. to the I likely which overlap other day of XX% the have test melanoma the is clinician, we

cell to through and we So I that reputation if walk that they how once expectation DecisionDx-Melanoma test of And company, have I our about and surgeons melanoma start use thought tests, carcinoma. test the care in. our you Mohs results when ordering know fact and think the that to are translates incorporate the dermatologists that squamous over in PAs these how the know talking hopefully the MPs they patient

any the But hopefully one of was certainly quickly again, is factors which positive those a come that reputation think So what know pretty customers test in the don't very no more translates orders to I I melanoma shouldn't among need, except is I important, a if too. door. clinically, there certainly two having you expect believe

population that get the could I let's I Okay, patient see the talk about it. now benefit. need can

PaulKnight

out And then could you talk competitive tests there. a little alternative bit about environment the

competitor it's there? on but is were you our based position better in impression a thoughts probably Our review, you're than any

DerekMaetzold

test squamous again, cell the same thing? For

PaulKnight

specifically. For melanoma

DerekMaetzold

the test. DecisionDx-Melanoma On

year. B. after appreciate and the But of of really A in significant US moving as So point any year, time we clinicians is one point competitor to today. their care. use reviewed this don't offering smaller or test later and test having value our this of be anticipate might believe And do in real of European direct we launch of maybe have now, private the evidence a from of the the weight tests point companies standards helping peer two publications, that next there's one at able XX We competitors to that supports

same of kind had Now, ahead will we the XX and of sales promotion responsiveness. year impacting of half in petition it's December, XX% from XXXX, and in scale we up of sales organization believe response of facing largely in I a of second as really first in significant that medical saw I'm we were to of they XX in kind from that December the trained year that COVID, a XX, the above this interesting months And we of we XX therefore representatives, staffed XX. pre-COVID, quarter expansion saw to enter the into representatives our sort XX just commerce, time. had sorry ago next dermatology the couple

Operator

the Sung from line Ji Nam from comes question BTIG. next of Our

SungNam

for thanks Hi, taking questions. the

component don't intriguing. sounds Just Obviously, results. I about, to able not sure the a that to on I'm integrated the of but talk think it. quick a couple results very standpoint? the you magnitude from way about know the overall too test characteristic performance early, to adding test what's of be Would it's that's that ones; improvement one if right if

DerekMaetzold

Yes.

here. see Let's

sorry majority downwards to continuous to you able Breslow clinicians can direct, Sung variables, those positivity. find about you does test reshuffle thickness, So pathologic both being procedure, sentinel a mytotic result clinical of I features using don't sentinel wherever lymph a to and fall using that for in incorporate of patients We node If below for our if itself, cetera. lymph the then X% decide in of them rate, upwards think can likelihood that patients be et to quite rule have Ji, and out rule I to sort That's that. about node alone, going answer. an who biopsy who

a alone. what you would with pathologic features that's reduction So clean have significant of

precision. mentioned, about in much the I more we talked example, that with the conference call, we also opposite on As that do can now

on a biopsy can could we thinking test recommended to this using we So somebody results of lymph of people procedure, integrated lymph for biology below incorporate consultation, top for the actually biopsy be sentinel who tumor by performing should sort threshold who and sentinel decide take node about falls the you score, node pathology. find would

both to also at So same very, to opportunity and with high very out precision time. in appropriate tremendous the rule a rule is that where me

SungNam

volumes be just but cases don't it's, test, where customers, SCC initial for then your and the And existing squamous I this guys DecisionDx-Melanoma are I good are carcinoma there very know on seeing helpful. that's you, you know again, cell Got obviously if targeting DecisionDx-Melanoma? Yes. some robust tell, users kind them about early into might to you think also more down where tried? too turn the Or the be if early there that to able of are cases of you road SCC, could of of adopters

DerekMaetzold

I yes. think answer is the

ordering XXX now, there who test. several right DecisionDx-Melanoma Mohs are not of are are probably physicians clinicians So surgeons our who

the factors the And same charge carcinoma most be then a terms a It open take really full melanoma we partner about patients actually that test melanoma or the that? squamous but of be promotion one Now we why mainly able orders and dermatology the to could them, is inside high of test are Mohs them melanoma they our because do more haven't risk of point, we of them hopefully access doing to kind from think practice hope cell to assessed or that's could where who's to promote that also be cases, could larger been responsiveness ordering the standpoint. cell lack dermatology are don't test. surgeon about is Mohs the time features, because the with terms they talk maybe in patients surgery listening would squamous one they and seeing in excision of medical benefit see We be they of think and on would these back and might and work tests. go having be in

minority melanoma us expect tests, who dermatologist we get back So think uses our do seeing of clinicians both be our ways squamous of to melanoma cell probably both test, to a so who to the be of clinical see of benefit the into test squamous hopefully forward. would adopter begin going interested surgeons in tests cell we I our adopter expect utility Mohs the mainly to

Operator

of the next from comes Catherine from Baird. question Schulte line Our

CatherineSchulte

guess there SCC ordering you've SCC of your terms rather success the incentives Derm the measured by just of by of of being clinicians thanks volumes. for talked yardstick XXXX? would Can on in of salesforce on Could existing clinicians Or against? the XX% customers kind questions. be end the you for ordering year? than you how being guys, they're ordering end judge just what I about Hey, the first, focused comment

DerekMaetzold

less a like answer. the more Sounds than

want on to that? comment You

FrankStokes

of for what's know number. if is I when state, another. interesting, physician quite our a that understands Butt I target we expression for testing, and and it's the if that don't exciting see gene don't what's give value value get can disease precision know -- in in don't Catherine, of know, that one profile it's have to -- terms to we them you embraces easy I

while improvement this the I launch by the also squamous going certainly melanoma first we have think to I've as who we're going of seen reverse cell value the want and same see I to of see physicians I there. value, patients, squamous got the who so exciting, say and success you're order way, well, more And cell have think melanoma, the I make

will be the I to So were we significant for most both, bit using Catherine. I probably came and continued order -- physician that's were users a there of squamous guess overlap I said, aspirationally, orders should think But melanoma. as hopeful. But do from physicians all of be who the think who of

numbers see fairly So I I grow think we'll in would continue to those think. two lockstep,

DerekMaetzold

what don't doctors of bonuses ordering of know new number I Yes. up in specific target set terms per the XXXX. in are SCC

number. tests you to think is guess that likely a carcinoma, roughly be But in and cell be half I who guess XXXX, of it data two full times I probably that don't maybe, you that third I ordered quarter who's also know should know. our our to seeing I is invasive Just was frank, seeing anybody to cutaneous melanoma expectation should squamous X,XXX number a three clinicians say

that of the you, to day, not at customers end majority the of surprising end of adopting those day, So the would also SCC. the the going are mind it end of DecisionDx-Melanoma the not XXXX at very be decisions be

value of in kind first the acceleration, second calls in person really full meetings this in I of business What educate in we'll But limited our clinicians continued a the the out of see of funny sort for as think us for coming quarter. face-to-face about year many to as our means hope. in that XXXX. of having quarter tailing visits, of DecisionDx-SCC I would plan possible year, probably period test

care. with being terms distinction than that doctors of introduces in think terms at with base we which higher in So in, volume number on would in the a we a the just focused think coming sort physicians only clearly has grow if much satisfied is coverage. to of important how our I finding test, of an orders at of hard of ordering wider company in I far enter that's the we patient a base XXXX for Medicare be transformational nicer sets XXXX, of ordering of position out wider to post clinicians having And a going XXXX, to end same

CatherineSchulte

three these you've When do then the of of end to tests we potential tests And could year, And XXXX. to could we talked it. about learn think indications first launch? five what you the those Got by when are? those potentially about this the launch new see

DerekMaetzold

earlier our and nice of next a the that here of as this XXXX. year safety It a say First of such good would they at go the or is early in R&D up of be thing And might pick launch? that. would you protocols see but year could then we of XXXX, maybe kind two launch -- around I test rotate couple to can that this one XXXX, see efforts a very as think time you I or around. wise point scale

thought, first timing, believe. we In couple part we're later specific on waiting of those have here would I on the data discussing terms And for conversations year, targets, in points a internally. then of the of sure

CatherineSchulte

study? study, could expected me one personalized and out? do read what's then Okay, on enrollment just for complete you study the last and And and that when the for think that

DerekMaetzold

in until statement as I to it's think an be or see of that's would probably early come as readout on a could we a But couple honest. later this year. or later years and aggressive XXXX

from hit with wouldn't label for therapy, I the time the predict to on is diagnosis taking wise. time patients, This people a help in of about X.X which to patients what think be PDX put can study through those and three on assessing outcomes stage is X.X of - impact I So when that recurrence hard recurrent. inhibitors our to target is essentially aren't test and who years the treated patients

for there. in of able of be were have period. a sort targeted back flow of of a get in year, shouldn't to the long quite sort it early But et kind patients So part of to the it's that sites course, with cetera that, to and We're blood make takes of terms new of up of And number for projection bit of time reaching a depends COVID study hard out. routine endpoint. come that upon mature running too that, a pleased time last but to exams, patient

that'll think of up the I year open a quite forward. in middle bit the going

Operator

Thank you.

Our Masucci Max next comes from from line Canaccord Genuity. question of the

MaxMasucci

Hey, thanks for taking the questions.

make just than QX process? more just directionally expanded factors you any that us one, DecisionDx-Melanoma modeling and complicated just even And First seeing under commentary. for for give LCD? exercise reimbursement white sense in ASPs in are sort DecisionDx-Melanoma of being there a the XXXX, might black the step-up a you're the just Can

FrankStokes

here. the Max, early Yes, days So are we in

Medicare over expanded seeing the population. a LCD that XX% cover We criteria the little of are

with consistent we be. that's are where So to -- it we were where expected

good to see. that's So

low that that of those we're And Medicare so are paid general. patients the XX so getting XXX means in your every on that of or XXs of

slow the commercial be continues to it progress. On side,

evidence the to over. We said be players. record And track and it as of big we those to it's push as making be to we have a big do players and five we positive are continue still the the won't from our stepwise expect there. giant -- before, tackling. to But going not blocking publications But development, continue improvement, continue progress we regional policy on large major, we have

MaxMasucci

another then just picture Great. Okay. one. And bigger

part, DecisionDx-Melanoma does that the result. I'm something the test on may assuming place when And a Just of you're that existing provide mobile help of some your a then place? remain been that customers app launch the in for? tools the health access care in this is AI-based to might continued company are virtual success integrated of second sort have suggests post-pandemic for positioning asking in to world that

DerekMaetzold

one few they A the questions yes. think in there I last is

We some Covid app that and a sitting never do well, for we've excision would. and clinicians within something the who across with kind practice their pull in there are way some clinically dermatologists use see on if a Mohs determine think the used seen would I is an though, phone so their the carcinoma many with patients patients we or that of to that case in iPhone of instance, that's prior them states an are is out increased, to dermatology, clinicians in see in app squamous with online basil which dermatology. other cell routine for appropriate approach people by cells disease there

gene got of really that pre-COVID think that So the the takes to was expression profiling get clinical part using like of your app guys sort even enough that features all about we feedback report provide you make an we seeing logic our and you data phone person. And integrated of it when and patients available in based can use that a see precise test. online more roll into we with we'd so to report, time that of portal them a that love or in system terms an this,

way medical with So I up XX XX, of education who their with life. think terms that a that's forward, being part grown approach school, under especially age in under clinicians years going of in of

and So and that's so tests, would platform continue roll that more provide a data. thing gather the data we as with our into working We more trend. that we the same could expect do other we to with precise those

of a a a And in test, go class diagnostic of there's earlier our or pathologic and can population micro the features. what case, diagnostic when I or comment, Castle take I prognostic like redirect we you development take certain front developing other clinical approach you have if here, was you gene but your stating to see outcome of using should to our test, is profile you. have I'll does, call, the value thing that part adds in first expression The data if what breath from a the believe to one test, based like me think actually of

of think to base of health I based from personalized which you base the and already care a that what closer population patient closer moving is what more doctor medicine. means that that So moves fantastic precision independent have, and is you management, to

And and consecutively the continuous naturally that's year gene from ahead year. with more using of precise And rollout able report both research set, were the go were an earlier I profile in of based node think factors, on a to more pathologic to and market management patient two prospective last years, lymph factors. received tested rate personalized clinical successfully to year, generate the have all we sentinel as terms we these well of score as approach. the able a as positivity that an the and validate that's data first in we patient independent this sample half, moving, the integrated feedback test I predicting through think, individual expression

terms In of a think new this new precision this to again based introducing much about way medicine. more rollout moving and from personalized

a would the melanoma this -- step, in welcome in improvement So next or think you our say guess I test. be I will

or provide facing. more have with precise, really a clinical, but jump confidence to not may to significant what recommendation forward high the it certainly, much represents help do more may patient single really a be number We about

Operator

I'm to CEO the call back over Thank Derek statement. I like time, further no Maetzold, you. would final to this turn for questions. At showing one

Derek Maetzold

XXXX for for want you in and call. our Again Biosciences. operator. earnings us joining quarter you, interest Castle fourth today year This concludes full continued to and I Thank thank your

Operator

Ladies and call. you gentlemen, for today's participating. this concludes conference Thank

You may now disconnect.

Castle Biosciences (CSTL) 9 Mar 212020 Q4 Earnings call transcript