CSTL - Earnings call transcript Q3 2021 | Castle Biosciences, Inc.

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Operator

Good afternoon and welcome to Castle Biosciences Third Quarter 2021 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 now like to turn the call over to Camilla Zuckero Executive Director of Investor Relations and Corporate Communications. Please go ahead.

Camilla Zuckero

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

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

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

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

directly We today margin, the provide financial believe information are performance. non-GAAP addition, of such assessing information the in the GAAP non-GAAP release measures. on today, most Reconciliations been gross of call the end now in revenue has company's over Relations adjusted posted discussed flow earnings financial which the adjusted Derek. I these useful of the which page our revenue comparable supplemental cash includes and will metrics In issued measures these to financial tables Investor the some earlier and are of at website. as financial measures our turn to presented metrics

Derek Maetzold

you, you earnings quarter Thank Castle's and us third for XXXX Camilla today Thank of everyone. good for afternoon, joining call.

revenue XX% XXXX a this our historical cutaneous afternoon decreased increase August, million to million. to pre-COVID of We are in XX% with lingering the including revenue numbers raised compared XX% In year diagnoses melanoma quarter, another year, and adjusted discuss pleased $XX we revenue of you strong impacts XXXX. $XX to over a increase despite in to in guidance

are We increased meet this range. track to say pleased that to we on were

you that working I the As XXXX, cutaneous is We fourth can diagnoses to October impact would all due XQ solid lower to it quarter the third similar is equal, to that XXXX, on quarter but compared tell soon too but XX% and pre-COVID melanoma else the to were down was trends, just with know holidays trends slightly quarter diagnoses. noted, than third flat typically I quarter a third to being quarter volume fourth fewer note days.

successes more our in this these of including test. evidence in growth to factors offsets in quarter initiatives, expanded the recent positive discuss some see may from supporting I'll commercial detail publications team and our moment. in a our fourth we However,

position believe commercial made initiatives, investments ensure team, programs, our pipeline they and a expanding You We decision as our creating our we both our to with including term. in our believe as two the long may focus the the well of we value continue unmet addressing near recall resiliency for line strategic in additional onset improve stockholders clinical we identified indications made from in patient existing to business remain tests. we as our and and we our of growth patient R&D commercial Further, accelerate compliment would that the growth for with impact pandemic, areas ensure in care, these to care. of strategic needs decisions

acquisition recently, the and The Laboratory test the of Cernostics. more pending first LLC, was myPath acquisition and myPath melanoma our the associated of Myriad

discuss these followed our across on Frank will by are additional results. initiatives, which We financial seeing detail providing today, progress excellent I

compared proud patients third the below As to remaining diagnoses the X,XXX I'm reports includes levels leader XXXX, data. us to by the our expression test melanoma strong test is with This their period We deliver of you our in cutaneous to X,XXX in third-party approximately of to XXXX, always upon execution, the it important to commitment quarter growth DecisionDx-Melanoma XX% to despite historical X,XXX and as further XX% delivered, consistent of another compared XXXX. diagnostics. enabled in gene of dermatologic a profile XX% total growth quarter and XXXX same based special XXXX delivered Castle thank position their compared analysis and reports team. begin which

we channels quarter. in this calling to point. ground sales the discussed, With of our were skin proprietary utilizing our knowledge cancer two July sales quarter and about of the offerings, beginning believe which And team existing optimal expect representatives experience continue each call primary productivity, we training three is their to takes on all promoting they expansion, the grew The on test dermatology-facing on dermatologists quarters. Xst. them we've As territory expanded and around we our and as XX educating second their to completed now our team and toward sales XX XXXX. third on And representatives of in

sales the what During with XXXX. in quarter in-person, were saw calls the quarter, our of is which approximately of we XX% second consistent

our last with our records modernizing clinicians the electronic record on clinicians XXXX. our limited And third these the plans once use We in-person reopen. our beginning earlier to high announced to of medicine's process peer medical an At by basis we with systems, reinforces patients. the our in-person integrate records Importantly, continue health accelerating with methods significantly for quarter and offices. compared our electronic offices even week, practice process last individual we the we We integrating attended. be the customers access have ordering variety that group, our platforms to establish widely pandemic, and reasons increased programs to interface actively agreement counteract health beneficial to that would to provide ordering for value their a searched peer be to electronic of of our practice the believe this begin We EMA. engagement to determined system, to increase tests with the year,

The with receive years the enable interface electronic expected Book. process. cancer by system to Black dermatologists and Castle's past Our has dermatologic record. is to been the skin medical by designed streamline EMA directly this ordering one review from to results eight The tests, clinicians ranked and for is then interface platform patient's number within DecisionDx, order a

expect of complete the end our by EMA interface We to this year. be with

that ahead, our look market promotionally responsive. we seen we is As have

XX body XXXX. across our that Salesforce for tests expansion for our alone now position of of in expect peer DecisionDx-Melanoma should have efforts, our suite dermatologic reviewed test, expansive we growth we evidence increasing publications with us supporting our So along well

adoption cell and channels SCC delivered August of this DecisionDx-SCC or of also our months factors. risk test ended cutaneous expectations. DecisionDx-Melanoma of offering our XXX for for third value with to the our same DecisionDx-SCC first patients our early as quarter XXXX. the and period. reports Turning carcinoma one the ordered for during XX% established approximately that XXXX well more and September We who squamous test XXXX, XX, on ordered this for diagnosed to as commercial discussed clinicians time exceed to in We've We've of comprehensive dermatologic continues XX, introduced diagnostic leveraging nine market

in quarter previously of discussed and third we've for the quarter XXXX complete being dossier the in XXXX. was the submitted for submission As confirmation more second to and received of our we as DecisionDx-SCC of review a test of Meridian acceptance PALMETTO DX technical

today, program the second not for posted XXXX. common has of As a period PALMETTO MolDX open

we XXXX. LCD's timing MolDX of Given that believe next for quarter in be comment likely the open will it's first the the

to XXXX. of melanocytic myPath delivered DecisionDx, We lesions. test and reports diagnostic third XXX the comprehensive our melanoma for difficult-to-diagnose quarter on for offering for DiffDx Moving melanoma combined

that unmet recall a DiffDx our we few may years need medical clarity began around You this improved development of diagnose address ago test lesions. provide to difficult to to melanoma

succeeded areas [ph] high with rate test technical In a and addition of target that profile criteria a sensitivity a low test having included our result We we able low unmet intermediate difficult And both and failure the said or product rate the tests being and our developing us clinically is lesions plan, possible. benign part the specificity, to strategic ordering indications to are a diagnose product of report of results likely in target of of We first. orders. XX% as determined and additional test patients our gene strongest more to clinical addressing the identified actionable expression with highest need, melanoma profile and evidence housing, believe for focus that to existing the business structure process with use with enable myPath providing malignant out likely as more test achieving serve to and than two growth profile. clinically could results being align we compliment earlier, I our acquisition our both with actionable,

either XXXX question at data the and XX, or able able malignant explain. with XXXX, for both This month. is, presented thus Pathology patients. In myPath and X, not? XX% Society first offer in comprehensive diagnostic period study melanoma used actionable of Meeting in a test DiffDx that did the benign And clinically when XX% comprehensive the alone, yes. from answer We the we're I'll providers Annual just clinical offering last we And reporting workflow, August enhancing months healthcare review order to results So DiffDx cmelanoma increase alone that the workflow. offering results American melanoma or confidence conjunction from melanoma likely to essentially objectives time let through our Dramatic of as of diagnostic delivery to data actionable accomplish their me June of and diagnostic the under to is here reviewed we're likely three

to our LCD, reimbursement advance saw pull in the growth volume able DiffDx being melanoma significantly timing compared business we existing or with under forward myPath covered CDO MolDX on we're quarter CDO addition, during and to significant In our alone. third

of and test. clinical of we TissueCypher with first of Esophagus aligned Barrett's focus Cernostics complements its platform, the business that identify our and acquisition area TissueCypher our market unmet second existing growth, to pending addressing with is indications The strategic including the need

before the deal We end expect to the XXXX. close of

carries and increasing which at includes progression mortality because Also tissue TissueCypher Barrett's on teams about cancer of one in with a as and to combined to the dysplasia survival This from eradication Barrett's fastest esophagus the Barrett's esophageal US. our the high We unfortunately, rates cancers reduce accelerate accurately non-dysplastic esophageal is esophageal address that dysplasia is our therapy, critical in been grade interventions Esophagus five-year have dysplasia all rates of in The incidence to test the potential unmet and to the is are proven need with But indefinite progression excited patients under of to care impact rate high-grade cancer. esophageal predict XX%. intervention is ablation designed in has Esophagus. clinical cancer. and or objectively patient other low cancer

esophageal need reverse cancer. So tools of diagnosis clinical trend this in to new we growth the

total and decision tests. we for Medicare Tissue cipher stratification on alone cipher XXX,XXX non-dysplastic approximately tissue use the patients addressable large improving assuming annual intended what So with need esophagus rate, This for our DecisionDx-SCC Barrett's them diagnosed our Cernostics stratification estimated what our In decision, words, patients other of this patients offer in-market an population a serve dysplasia current the been have also time? use at indefinite factors with market, indication grade the risk Barrett's do by fall risk like we clinical acquire dysplasia it million. that for parallels DecisionDx-Melanoma market the equating basis. current the $X to an within that low that are and esophagus. expands to high but US about DecisionDx-UM current by and solutions intended when is And influenced

biology similar This liked with focused customer a And expression innovative demonstrated XX,XXX that to also to And beyond tests. we market. to educate know finally, spatial have to in and adding clinical promote laboratory this tests R&D clinicians. size. another our the platform GI base we dermatology size is or targetable market skin We the of general profile technology groups how effectively multianalyte we cancer so of market and approximately multianalyte are to expanded gene

and to generating a usage term, Despite market. market GI experiences cipher as our of theranostics having team on the GIS. has number parallel a we fields For interest dermatology presence, our any been in in in near tissue the successful see from

group build addition We initial expect associates. representatives sales in of an to XX XX internal sales to and and MSLs

close, we that right I doing report on am I published excited the time. Before share our principle today. Castle founded of thing at ESG guiding right the you inaugural to with was the

of Castle we journey program our The early We move demonstrates Although strong core as a of goals. our ESG focus with are innovation. relevant and this principle collaboration is guiding launch marks ESG transparency, building our inaugural laid desire business to in our our journey that still and important believe for integrity, essential to our forward is factors in our success. report public the in an began progress ESG XXXX. and cornerstones and company, milestone stakeholders on We our a

to the our learn financial call detail and over Castle it reinforces our lives grow. remains results. turn Frank I employees Frank? of ensure into additional now and positively valued Additionally, provide will to our for commitment improve our to led impact who'll great patients the place communities a

Frank Stokes

went to Medicare $XX.X for by the increase tests effect rate into melanoma beginning Overall and the strong revenues Thank on offset in of and and Medicare that in XXXX, growth positive million, for of commitments our In that third reflect for XXXX, on report the delivered higher revenue expanded continues a total we deliver lower volumes With quarter at considerable higher Derek DecisionDx-uveal of LCD revenue higher stakeholder melanoma to test made DecisionDx-Melanoma, good and third increased year. progress periods. a The per you, rates, adjustments unit per into delivered partially unit reflect XX% uveal afternoon, XXXX. everyone. our DecisionDx melanoma DecisionDx quarter as quarter third Castle our the both related to of initiatives. effect a December prior of higher rates as this went well our over

excluding million, adjusted periods of of over the quarter to the revenue XX% prior in test revenue increase a adjustments Our was delivered effects third related $XX.X XXXX.

was gross XX% of in margin quarter Our during the XX% compared quarter the to XXXX. third third

test was Our reports same compared associated period to of delivered margin, effects the adjusted XX% gross asset intangible in prior revenue periods the XXXX. excluding amortization and XX% with for of

XX, sales increase clinical expenses, And same costs by operating million increase as SG&A XXXX associated the well the return $XX.X peer XXXX $XX.X total the and largest increases $X.X $XX.X manage a was R&D as cost XXXX normalized for with Our conferences, remainder for stock-based higher and increased hybrid clinical of return ended primarily attributable sales studies 'XX compared personnel functions. increased by The in higher compared the run we're to other training expense the headcount, to to bonuses, increased costs XX, in-person quarter the well with was the and programs of our September to activity. including includes for headcount events, as increases administrative travel in third were with in-person large more partial of additional and the in to which XXXX associated in months marketing to to higher primarily of million support of peer September and our expenses These associated attributable as period and promotional costs. in personnel the to ended benefits study to and of quarter our teams, part same SG&A, attributable which million the three increased was year. in compensation. associated with period personnel salaries, primarily driver million costs expansion compared last

our to commercial As body expand September the evidence, XX, which support quarter products, increase our we cost $X.X to R&D as compensation among XXXX. quarter initiatives ended continue as our expect non-cash the expense, expense to and Total of sales for September further. ended well pipeline XX, stock-based R&D to million is for our continue $X.X and total allocated SG&A, XXXX, million compared of we

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

quarter nine XX, ended Our net attributable net charges. the share a of $X.X to million well a portion of XXXX was a attributable loss cashflow for as of requirements, for the months the XXXX. per $X.XX of to for $XX.X primarily Diluted Medicare recoupment of by the loss was third XXXX Operating third of the third was non-cash million payment for a September capital million loss same increases the $X.XX quarter the $XX.X was XXXX. loss net XXXX. quarter negative $XX.X for compared of common advanced to offset the to stockholders partially positive for quarter in third of working to compared It period and in the as XXXX million compared

You'll that receipt advanced prior the began. of recruitment Medicare payment associated of This $X.X the advance with April, benefited year, the year payment. the from million cashflow operating recall beginning of

As of million September September $X.X during has with balance million the ended for Investing recruitment. to cash XX, were in the payment melanoma. the been associated the XXXX, nine primarily myPath months of acquisition applied $XX XXXX, XX, flows

now XXXX cash turn cash at equivalents Finally, we no million and XX, call of and Derek. over the to September debt. had $XXX back I'll

Derek Maetzold

Thank you, Frank.

hard achievements and commitments to of enables As possible of work without strong stakeholders, our our deliver and dedication to to Castle care. whose on the always, us impact patient our the continue execution are none team importantly,

well and for commercial initiatives for Q&A. and Thank including progress dermatologic Operator, programs, we creation. and in team us our the both expansion commercial our continued Castle. ready now in value are remarks. our This R&D pipeline growth you concludes interest test of our quarter, for third Our positions for our

Operator

The instructions] with question Sung [Operator Ji BTIG. Please from proceed. first comes Nam

Sung Ji Nam

Hi, seen of right? that's having the that in from about, might been diagnosis, thanks we've you stages terms diagnosis Derek, you it's the terms be the year, taking for as delays of could hearing impact now melanoma far you that potential a questions. talk hearing? anything or Maybe as Since ground been in are of whatnot

Derek Maetzold

don't people comments what be in I a shortly we're increase spread seeing think publicly that's to are kind of or already officers the US. around dramatically that number have think don't any I terms going -- regionally informal melanoma either distantly. of about available we I of heard see diagnosed with will

to stage four. visits primary their seeing And is that appears concerned but I meetings we that a or that patient the necessarily diagnosed different healthcare tumor by being of three like for couple in so-called could thickness population are gotten So actually the which because a of this that's to us says What risk are the mole up melanoma. be where ancillary physicians, other to has enough called going think only fall they're sickness patients in to of a things creeping Breslow's melanoma for example, big in their be is. not that care

that my is that they're that being are up terms the person when side they're over that in phone months the ancillary, in having thickness. those being a missed. melanoma XX those, weren't than think, be adverse coming now just many the back ones their coming the is the there XX% is of a seen in so people ear and as of of the more And or little with more or perception that comfortable in are on COVID picked pushed their of that since our neck with little worse I impact renewals So summary, prescription tele-health of mole be to last patients their

in value our there are I showing tumors melanomas, There that that who that invasive terms Now, very difficulty that millimeters think have patients in have what thin where data X.X thin that very, in are we thick, test. Castle? the with actually melanoma. use also mean of are coming add is certainly some patients we of like X.X that one DecisionDx-Melanoma millimeter, generating are for

what is So we diagnosed or layer of really our gotten we X.X, or just earlier on with those noninvasive test of epidermal with would X.X, who call in-situ skin, melanoma, the a which a tests. X.X don't thickness thicker, might've

go So come as these over belief be basis of work patients spot actually or to seeing begin ahead to but a will primary person sweet test either and their practice, to progress routine into time, back happened that it's sometime see least diagnosed with more their at yet, on way care it happen we'll melanoma a in because the hit patients hasn't more who to doctor has evolve. and that dermatology our our continues

Sung Ji Nam

there I are of timeline past? one have non-skin follow then And just changes of the updates terms underway? cancer any discussed in any up. you that helpful. terms in Are That's are in of If programs what there your have the

Derek Maetzold

No, maybe I in we here seen a we've think the fall. conference at this discussed

our organizations that seeing executed to have of being and that we that a now, our more yet seem our estimate start most come high internal of protocols, to we're right I patients. running programs is have pipeline research are are disclose I new ready what targets, we're of out but other of you COVID sort So forecasts. seeing versus couple say, our would of hospital-based of they're guess all believe ahead to and that they community-based programs

our see timelines of don't any estimates of we delay terms in this earlier So year. earlier

Sung Ji Nam

you Great. much. so Thank

Operator

Mikson Nam. Please from Ms. The proceed. with Kyle next you, Thank Canaccord. comes question

Kyle Mikson

Hi Thanks Thanks. questions. for guys. the taking

and the revenue. a I revenue start I'm the looks decline to If guidance. So total sequential wanted in doing with like math, it

reps just And XX% I'm or quarter calls provide. trends at upside surprised level XX% below type so given could the you're of if like assuming, baseline. same the I'm the a melanoma the of, same additional access, little And just wondering bit third the in-person diagnoses

of expectations talk some you. or in conservatives So that could making tempered you're Thank about there? maybe the you

Derek Maetzold

carried there well October very We the May is in a through third we the quarter and Sure. in and strong. important that out period. word. guess recovery June And over began most finished I time maybe is changes know Nice Kyle, holiday, in seeing, so I few quite flattish being to were do November, XXXX, thing of trends XXXX, a working sort a that want those melanoma funny growth guess being well respect, you as third days maybe but XXXX, quarter XXXX, of speaking I because could of fourth see to that but don't put of you typically typically a a the part non-COVID Thanksgiving quarter conservative, would as December. seasonality. overly as in normal in we're diagnosis in year, say

mentioned here do field as for certainly adequate year We could October guidance see we felt pleased the Frank, Now, that are that said, also but force concern, that are that the being on negative would being I any it you don't of our you a was with with the that now. too agree occurred that when expansion that in or... we trends year. very this through hindsight, commentary we July rest X and conservative of cause be

Kyle Mikson

Not potential Okay. LTV effect of rest positioned to to coverage tests. effects receive kind portfolio well. data growing are as our others or there in due some I are guidelines of surprise and deck and and payer of just products huge your Thanks. SCC in the to there. maybe officially could commercial coverage Thanks. just if payer private for for 'XX for the No, noticed understand. I wondering that's DiffDx the presentation talk you the about of that expectations is XXXX. guess, helpful. your, a the sooner I than And, now that I'm any in And Thanks. better of

Derek Maetzold

Yep.

New think is bit Christmas given and One holidays by apart us and see that try November a Noridian meeting of little I'll or for and XX, highly tell likely here between week it's it here. Palmetto the that's Year. posted Christmas already that we'll open I a So

a meeting obviously I associated LCs that is likelihood year occurring So think and unlikely. of end with before trauma open the XXXX

between here would come certainly, It it's a must one. the could so assumption working upfront out term. our be do meeting first to So quarter limit a is be absolutely informal posting have by a could of push which then at versus that a conservative but a earlier, about LCD have think set, time draft they year faster I assuming then final definition the when XXXX they towards to better churn or

terms and we amounts the newer side so could update the or change in think other of of we in go expect predominantly a are we during continue test in basis, XXXX tests, seeing some launch revenue squamous the cell and guideline XXXX. expect coverage for I for commercial modest on that in coming to carcinoma. DecisionDx-SCC In don't certainly

I think think that year. meets in group of I the fall, every

So I towards commercial that effect probably much the would see wouldn't would earliest we on that through of passing which be on XXXX payers. think update an have a end the

in NCC included diagnose the diagnostic combined expression melanoma, a On in earlier comprehensive see a combined that lesion XXXX, the diagnostic difficult guidelines and year did to earlier DiffDx or of myPath melanoma we are that offering melanocytic assist recognize and diagnosis this there. offering change in of this that gene profile tests

reimbursement to final as to of movement forward NCC and inclusion or So hope trend guideline coverage. normal in of pull the number through XXXX, litmus test sort we the them go some some and would from put the payers a a an with since see of

going our on XXXX think revenue I in throughout number for hopefully expectations a build forward things have will expectations we of So the that year.

to the to well. evidence of this as relates XXXX. ahead and being third in DecisionDx-Melanoma go some it year As that next we plans as smaller continue test, year expect would second and the and additional have later did we We progress, the published in see the quarter

Kyle Mikson

was Okay. helpful. Very great. That

that that, quantify of epic expanding next if to kind before It off. can and one, also, questions kind quick ambulatory I you rate, I Athena of plan one gen overtime. nice question HR maybe ask two you HR had your number on was could basically integration just ordering the me you electronic current hopp see that is like or qualify news. other just talk the Let to and was about I about -- do

Derek Maetzold

about So and the EMA talking medicine you're the integration platform? would that the modernize

Kyle Mikson

Correct. a the has just and well wondering about [ph] installed base Any modernized rest. Anderson

Derek Maetzold

Yeah.

guess we'll I the have look is of electronically. portal it the current physicians the business but It's we part online with in future ordering past, it So haven't small at important a the want one that maybe who through disclosed ordering our here. in online

I value been laboratory customers a number operate that's they would who less that's how of are practice. but as the a on, So going over fax reports, that's and going there just with say volume a than because half still machines of

practices, said, number think we received reports and business to processes from way, in throughout a ordering. being when I having our of integrate they through is of saw we and did to ordering XXXX, by practice both converting the well individual solution for that them of being However, EMA, the facts-based practice with all and Tesla as based very interested tests, that, opportunity EMA as kind were by exciting

So think order on ordering appropriate are and diagnosed kind Monday afternoon. easier talks level. standpoint. that go of expect offerings, or XXXX, mind, on because the entertaining and that individual number nice we over And our of practice could and to medical test by the the or from of EMA with X% able patients ahead load much come a practices back we all solutions. XX% will XXX% Friday I customer believe as doctor's practice that the we clinician work record about to private miss in into certainly day. times year, It's see not? And going level, the in through see and an we go of be plus melanoma keeping be It it convenience becomes we integrated will of who the that lift that with receipt that's the we believe course online to forgotten, a in patients could We were a from community-based individuals. they on do fact They I results. reduce throughout dermatologist companies they busy the might more test of expect Tuesday managed other a by time that should that to our make initially course, that with are minority smoother and

interests EMR systems others per So the a don't and se. thinking who than epic are into really fall much really services of some our command about I'm more hospital-based have

going through that business medicine So forward looking impact on the see then to we are national there. and out modernizing from has and seeing roll sort going the the to of

Kyle Mikson

Okay. hear. Makes to sense. Really interesting

it question, for them. there so but leave much I'll thanks my taking So

Operator

question proceed. next Lake comes Please from The with Street. Thomas Flaten

Thomas Flaten

the wanted on for the the get comment, release productivity. optimal to prepared to and press reps to also remarks the taking question up Great. sales from I the of Thanks time quarters follow respect both to two guys a with

around I longer Derek calls take it think that of caveats access, put you'd past that etcetera. in because some might

wanted they're So now? So into by year that. we kind fully end? seen it's think acceleration year? clarify productive quarters you or are that do from have just the of two we, there? next to an Or I So half expect you can first of

Derek Maetzold

No, them things had up I Good year when to question. in-person both have good get it's and don't second October. about think a our to running. quarter have third take through didn't worse XX% of We've see going and access calls you been

that, the I was If our covered hindsight in expansion. up I third there. are something think as that it, quarter, we think of count wouldn't seeing do earlier of during of effectiveness I the it questions because an were of Salesforce seeing we had impact Delta? new sort we So

So a my sort of force ground expansion of we'll hit with the that at the sales fully beginning running year. the expectations effective

Thomas Flaten

had Got that to ready the teams, January a speaking it. call, And on commercially? having plan product commercial still [indiscernible] team believe talked you go Is that then about I X. for to of support the

Derek Maetzold

Yes. Yes.

week. are interviews think this completed being I

and early start and during nearly will at a We gastroenterology profile have sets. Castle, experience expect structural of that and people on board the they, come to ahead we believe really nice all have individuals offers go given go the out December

early hit the running timeframe. in they the hope would January post-training ground we So

that remains on So track.

Thomas Flaten

you quick a atopic study the on the in guys psoriasis one dermatitis had program just then And a put poster. out design

I Or there sampling are but are? think it you sounds it how as guys a like it weeks the a two is opportunity non-invasive And back. well? you've into thinking treatment you combining if selection that given up set opportunities extend as response an to about was those test, monitoring few platform,

Derek Maetzold

read the you. poster well, you I didn't guess

clearance the mean hoping end systemic objective is the to with which we by minimal modest patient's to clearance, or at that up get XXX% don't opposite and likely have expect therapy And response a we think partial. really is to first patient We're highly a find look to. we clearance go to in from I our a nearly could just and with biologic responders. this that ahead therapies which

physician a if So and the table a really, patient off take two six can and put on.

poster time. serial you that as noted collections in over are However, there

before to response. to patient by advance for pick so three monitoring, in be up response And begins lose example, able months may we

value too think that, it a that be we care. a might comment on better creates early that if annuity forward for company in And I it's but can for patient going patient great obviously per the fact, demonstrate to

Derek Maetzold

taking the so much. you appreciate questions. guys I Thanks

Operator

question Baird. comes with from next The proceed. Please Schulte Catherine

Catherine Schulte

questions. of you guess came the in we Salesforce, reps could much your the the the cohort a for first, curious, more think quenching new that expanded growth on get How from they fourth how I and more bit just much thanks do of contribute granularity guys, little Hey quarter? there. could

Derek Maetzold

level we country my the haven't We with only dermatology per had se had areas. we out maybe of those analyzed We no facing and covered the we wide that bodies. importantly areas and US representatives whole with at don't, XX is

to that went XX dermatology that rough had before, of something. hadn't focused the and sort when where people to we So wasn't say mid-XXs you went could areas to from zero of you covering you sales covered we

in question sales the integrity. with over quite don't August, September and any of answer course the were terms that the I pleased accurately October. with of overall July, seeing think productivity we of growth So can We groups the

to we 'XX. think pleased in go the out at I bleed question. that overly and and but us October here, we August, it too, forward well didn't and earlier sales quite seeing expanded triangulation was quarter the on We with are want mentioned conservative and I September should organization that quite come were as fourth Kyle's in So the be with

Catherine Schulte

you early highlighted we get you when Okay, study outcomes? on is could enrollment great. going us your and the personalized in details give any update additional the can how an decision-making study, on And on SXB then and data XX-Q there. Decide then And

Derek Maetzold

centers of over of sort. That's who been nice we of Catherine. sort slowdown the in due XXXX IRB coming of last I saw Most terms Sure. And think in board. slower placements on terms that little in progress maybe early or improvement 'XX the COVID, were contracting I in early We've kind seen and quarter to don't so. and academic centers was -- of at of to honest, for largely studies be our a a observational

going a of of who number disease, get data to some the I the and I opposed didn't PDX fantastic benefit. had we might it, that end be change, from wait selection, maybe number hey, to by these really it. with have and year, of the in who Stage say, initial three probably to expect of I'd reasonable aggressive that use I'm data's So who to and all watch, patients need it are patients or strong but see here the, that who think, but next It'd that therapies of are inhibitor that's could benefited here help terms be efficacy nobody despite a think wouldn't improve patients the as to gets they're saying, patient patients going because not

timing. hopeful our that's So

think XB in year XXXX You Merck focused September, XC presented may by that was seen data on was with XXX patients. have September Keynote this at and study back I ESMO, the of there late Stage

can a are a you uglier quite likely have showing Stage low Thomas but are and presented and likelihood at because wrecks weeks ago, patients. from a therapy and PD-X of benefit thinner modest. conference value similar, our tests, We train of effect, if found XC expect they the those who negative, a people especially metastasizing of and really were showed very essentially those same was integrated who as going identify but not it tumors data our about treatment data thicker that not the very, in we Stage [ph] model talked The couple and forward. XB So there people who little

make those that elements So moving they into two quite to that a XXXX. me, positive story make --

don't to XXXX. we of centers had As really period we it that's relates think terms quite earlier of in up Decide, well. XXXX because a running to largely the enrollment, kind had I slowdown in in enrolling in COVID

that of and tracking looking outcomes, to on a be or have study fall. shorter use followup preliminary with able some other we those same our guide patients patients not, is data at a that data, So later of procedure this to is spring, are biopsy who tests which a to then top publications sentence, come see had will be similar course, year. out long-term although this next should line also We time electing it

Operator

Thank Please Leerink. next comes you, Ms. from question Schulte. with SVB proceed. The Puneet Souda

Puneet Souda

I'm you today? Are really with the seeing longer the they're interaction? terms rep been trims of derm that's is I'm The been one covered ask in any has and that And they're maybe it practices, change sure. let Traditionally time first me behavior, in anything are the little interacting But dermatology this this gives the any volumes their sales allowing of looking how in differently. terms type impact of you any that permanent in more if we the -- were could that market. sales the seeing here, different just, reps pause a November, in super what COVID expecting of sort and bit post that trend a be in you of just currently seeing of the you're you're and seeing in you pickup that obviously stronger helpful. saw as little would market, of you bit qualify

Derek Maetzold

for So have that seeing Delta by that structural that's move through that's and of of changes, as on or in another any until kind practices basis, expected, I locations not aware a back we're off we some comfortable, Puneet. but a you macro and two right certain month why practice let's were changes go person certainly or basis, there practice heard ahead trend on are put

three XX% our be think interesting. of to sales I what diagnostic skin person believe are in or offerings other When to sort getting as third fact differently melanoma us highly something who that there's finding who have that much quarter look setting all stage some I'm with different calls, and compare something hearing seeing, I running XX% were to molecular other of diagnosing person molecular that who to, towards more second tests, squamous back want I in-person are carcinoma about, two to XX%, be think about those the I cancer, guess peers I we of is resistance dermatologists have for diagnostic cell quarter that I And data dermatology. companies actionable and being it were castle customers. clinical but than calls year product our this now of have able in quarters early

that of to our office want versus our terms a of bring So But a certainly the which know value is dynamic it representatives different. if of I don't to tests level is an companies. other and that perceive value as in I educational the Castle difference

to and Castle forward. -- it aware I So longterm practice nothing we're can be going can that macro I don't on or nationally about systemic we happening I but kind say from standpoint, say, of this basis, cause on of a might shifting to seeing a a by concerned point aren't be some practice is something a basis,

Puneet Souda

just data out we opt clarify. what watch are maybe of out taking the couple then lay you to conference should could given things forward? the And the Derek, that it. some next in or for Just questions. that the question we of terms to Frank, months? Got lineup for readouts us on quarter Thanks how prior my wanted of going And Medicare about think adjustment,

Frank Stokes

Yeah.

categories. positive relates see prior the all It'll we'll period bounce continue that. to we'll some around, Puneet, to and And So negative. have payer some

I up collection closer is important at what's much our better actual think rate experience. that's test we've a accruing gotten per to

million and same north I of grand quarter the million. so, quarter And on difference it $X was $XX year a think last was this $XX.X

grow So, that if are should and we other -- with DiffDx prior we're and companies And period also, this -- the bit. prior the said from quickly, eventually squamous you before, really Appeals tick course some little all to have companies, the see time. benefit you and improvement nice we might that's see time the process period a as obviously but up going as adjustments some cover as there, from in of it'll to a

Derek Maetzold

couple of it of have in meetings abstract XXXX. There the dates. a to timing that milestone So shorter period are sort relates time in January

of terms there data day late they some opportunity breaking go So at think in presentation that that offer would year, a something might a this milestone, in be it is as to And have March. to look a to AAD hope well. I in we

So you April I importance would next of an around activity. is think of the period kind to meeting late or where go and that's College expect operate spring skin target American wise early area in of time some The really we AAD see as the Mohs May. but and ACMS early marker that's is Surgery was always of stage ASCO, cancer. in you kind as know June,

there, but activity care about dermatology have might would company. base we is to be not customer So the us that's a that honest, we really for as

some we perspective to data I penetration be presented. there earlier expect from have line go So up a driving those would that the are to ones would important

Operator

Mr. you, Thank

next from with comes proceed. The Please Souda. Paul question Knight KeyBanc.

Paul Knight

I genetic like Derek. expecting today or with in The coding soon Theranostics you were anything Theranostics. else Thanks test acquisition. on update know for time.

Derek Maetzold

Yeah.

they tomorrow, already Draft So either that a but billing the there was I LC is finalized today, article there. were in think

you I channel, test the like cipher the Theranostics gastroenterology so the guess for say. We esophagus. overall really program would we tissue really So, like Barrett's

test squamous As every than cell melanoma you know, a our our who we potential think getting that could there's for combined. more around endoscopies be tissue patients cipher eligible year XXX,XXX and are test. and That's carcinoma

we So that that like from standpoint.

like having tests, say, or and three this maybe, foothold being to of the leader of that think through next around also develop we Theranostics to through either in the can current approach couple gastroenterologist in in perceived dermatology, space. gee, find tests or RNA and or be some as turn that four kind by years, with GI so having you We additional 'XX our from we'll a went just able you're over

think that's get I So our there. vision to

time. since with their payments the price in clinical [ph] They established do claims that Now have and on this have earlier more laboratory fee point XXXX. receiving year on all Theranostics did in term Novatos short review routine been Medicare list complete their an evaluation practically medical schedule of

really and patient the if there year. like of help had check commercial So it next a say, we support boxes to of uptake solid care, efforts all let's test that And far. so a use difference to are out go appropriate good, ordering has makes no to we have feel expect

deal certainly. ad, month really see Although last year, as that our is we 'XX revenue is when 'XX are that revenue mentioned, announced here going but is next see expectation and to we you building the we accretive

Paul Knight

environment margin, on Derek in the the then the a supply in gross bit and chain the And sequentially, was Frank tech held down lab anything on it going side? and

Frank Stokes

a fortunately because -- new the out had Long the honestly Paul, off to got that sitting we two XXXX our issues for, the obviously the right it. almost margin tests impact products. any are of of of success modest accrue almost of we've -- the We've consumables Most Mass, over just Beach come none there. consumables no book No, no. our had of majority didn't barge And now. with cost is associated the we we but of really XXXX, which on Waltham gross did on have did, and revenue we

the tests So is that's number seeing what accruing of that not revenue for. the just impact we're of there we're

Paul Knight

you. Thank

Operator

are There at this questions time. additional no waiting

for Derek Maetzold conference So to I'll closing the over remarks. pass

Derek Maetzold

today interest Biosciences. Thank continued for you, This concludes Castle in third Thank joining operator. and XXXX for earnings our call. us again quarter your you

Castle Biosciences (CSTL) 9 Nov 212021 Q3 Earnings call transcript