CSTL - Earnings call transcript Q4 2021 | Castle Biosciences, Inc.

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Operator

00:05 Good afternoon and welcome to Castle Biosciences Fourth Quarter and Full-Year 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. 00:19 I'd 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 XX:XX everyone. afternoon, Good to Castle results full-year financial quarter Biosciences call. fourth conference and XXXX Welcome

the update statements and risk company's Accounting as not over at has comparable accordance items Reconciliations results. States available statements factors in XX:XX of believe Joining Act Castle's of most the website. Frank to and reports limited forward-looking Reform the company's transcript statements change. forward-looking Form of and these the reading calculated contemplated or uncertainties on assume quarter today, only measures other Forward-looking these addition, with a the earnings the discussed today are forward-looking in three as these the non-GAAP of flow should recording risks these and inherent we today Generally could you risks Maetzold; XX:XX time-sensitive recorded statements detail contained XX, about our margin, expectations to page Investor me containing Relations no today's been there The are used in financial as is the heading materially today. in and current be any of information are tables this we revise are referenced company's A release useful in for of financial on and directly other provide financial of and flow accurate. Securities in as and contain adjusted have XX:XX or to EBITDA, and Annual from circumstances Securities the be pandemic. results assessing metrics company's the these Officer, to non-GAAP the approximately release the expectations that XXXX. to the differ operational statements December related GAAP. Investor will projections forward-looking impact non-GAAP and some supplemental described Chief in adjusted financial XX:XX ended on financial COVID-XX may our A uncertainties, page will earnings that cause Exchange posted for adjusted factors, assurances the earlier can begin, cash XXXX. the on information issued upon XX-K Chief any addition be not Accepted or this Derek in based today, will event Executive including in And will of our today and obligation statements. of revenue be gross and are listening February to are number as weeks. the those performance, to speak with and involve statements the We call, Private of actual be results realized. Litigation substitute XX:XX outlook Financial issued forward-looking the future presented Therefore, turn or the of future speaks some longer United to other Commission. to These the Officer, matters end assumptions our made statements and These remind include you the measures which for These not regarding of call includes but the like risks financial operating filed Relations our within factors In Stokes. documents of Report under in metrics XX, Principles such been call in Derek. Information and cash statements adjusted which Founder, of meaning I revenue, XX:XX Before no today, that GAAP only information President if statements XXXX now measures I and call and website would or replay XX:XX our GAAP the no performance.

Derek Maetzold

you, for earnings XX:XX joining Thank Camilla everyone. for Castle's full-year and fourth good quarter today you call. and us afternoon, XXXX Thank

balance doubled executed enable successfully clinical allow long-term commercial we in Our creation, gene and facing team by areas accomplishments dermatology the believe and evidence goals believe value and XXXX, opportunities, expression execution expectations, that R&D, Castle revenue year accomplish to care and XX:XX leader. of plans the industry beat further impact on two tests. momentum, by an revenue continued success significantly growth XXXX. will million was us am today company We the strong on our to to team. us investments proud our set by in XXXX as beyond. scientific and to I testing in volumes to demonstrates well XX,XXX, our as out comments our our allows areas growing as a the unmet that to acquire profile full-year patient XXXX and compared cover XX% We our support potential advancing an a our XXXX plans with key strong exceeded exceptional sheet, of our growth We XXXX and complementary increasing XXXX the of in needs. to our we XX% extremely to for We $XX.X XX:XX clinical accelerated value enter further in our position strategic XX:XX Biosciences

$XXX testing to our full-year expect in the now we our revenue patient range XX:XX focus continued the centric foundational XXXX million, will million ahead, driven strategy. I of dermatologic $XXX franchise. Looking discuss

to related is offerings: three patients provide a of with clinicians to treatment is decisions, as as in diagnosed may test Our XX:XX is plan dermatological with similar melanoma charter ability clinical or consists to cutaneous This subsequent At risk [indiscernible] decisions is DecisionDx-Melanoma. stratify allows personalized enrollment. initiation decisions include enrolment. frequency both with of biopsy melanoma of follow-up, This DecisionDx risk one biopsy, and which surgical trial to well used patients risk including factors. that adjuvant test [indiscernible] more franchise risk to patients imaging, advanced node second the and testing the node evaluation, a trial invasive diagnosed sentinellymph DecisionDx-SCC. test used active procedure, sentinellymph surveillance first stratify relating dermatologic Our proceeding clinical it tests, radiation, in used with and therapy, treatment is

XXXX, difficult-to-diagnose we third compared our and XX:XX to XXXX, overall Our dermatopathologists approximately test In headwinds [indiscernible] DecisionDx tests tests: lesions. comprised despite are assist diagnosis when test. XX%, the Melanoma grew dermatological of nearly offering used XXXX, in faced of The by were XXXX down discussed, in melanoma. to rolling-out two DiffDx-Melanoma to rolling-in pre-COVID melanoma these from continued Essentially myPath test is and by dermatologic the compared with XX% XX:XX or As melanocytic dermatologists have volume levels. COVID. Both

In outside initiation treatment of NCI of will knowledge, progress you expansion, their and about was assessing updated [indiscernible] about from but received testing more further long-term our highlighted delivered with [indiscernible] XX% our based diagnosis. We the our registries collaboration doubled believe with ongoing on our for on useful XXXX we we XX% further that execution I deeper the life modernizing we ordering our response health in building XX:XX DecisionDx-Melanoma accomplishments at [indiscernible]. know, assessment. health and near-term Conference out you team record could XX% remind and of their person. survey serve to our generate. make As our our size ours the health areas, the dermatologic had the uncertainty, patients we our this received progress, territories, XXXX, a current Research the who of contract dermatology the is conducted size the team to and publications of Cancer the we sense sales investments, tests, with could fee XX:XX system, fourth time assess ongoing in new from continued believe personalized to that commercial continued a supply our sales clinicians. core to us. we interface consider tests. a peer-to-peer ordering about melanoma of than remind team by adoption instance and we melanoma the test the and our Federal programs team, and commitment dated We three survey with option, calls XXXX, in around XX:XX them outcomes and total reviewed XX and and Foundation NCI, with and patients the testing, you relationships will spend XX:XX Our increasing were XX:XX improve R&D Melanoma dermatology will but One in both Castle, of initiatives the XX:XX electronic end data We That's of keep patients XXXX clinical in of initiatives XXXX, schedule an providers at finalize XXXX at for able gave fantastic and were potential quarter our our peer the XXXX, for the collaborating was published who of in from customers reports. you which with or in expand dermatologic I that continue great system, XXXX. medicine's for XX:XX approximately collaborative strong sales time ordering we the to to for information facing increased tests. And were targeting that for exciting planning. significant in their and XX the we show part offerings, new clinicians optimal include In and saw a that leading program. plans that upon dermatology results Again, team discussions alone, with time will in wanted evidence continue relief the plans XX% of our Institute National value patients. XXX of issuing for innovative should well this X,XXX Winter of These through representatives believe we commercial their Further we clinicians Clinical patients dermatologic us information growth. SEER, Dermatology patient in positions most a X.XXX time optimization, of January link of in the with tumors attribute time

specifically SEER overall For specific and those have outcomes, survival melanoma associated and survival. program the into NCI who enter database registries’

performs who patients That treatment is, at only only Meeting who to and diagnosis. X:X The focused ensure patient develop a This X had and of results that those the and socioeconomic to melanoma traditional seen published pathologic or We XB confirmation Class had melanoma Medicare features plan. or which or that test XX the survival eligible Class all age test performance DecisionDx-Melanoma good. real variables XXXX death both who patients who low to have in able is those Class last from dying our and also have care. or Looking clinical time a all XX:XX as unselected That data it those show to and high result matched was the to population this care patients are their month to Study or in death XXXX a a population. had features from death receive results: pathologic their is on X not dying what higher develop features between and the of all ratio a upon traditional with melanoma, benefit before low-risk at was clinical large causes. plan. or XX:XX that dying from match and their unselected this actually NASH we and our diagnosed found which has who world, as part are or clinical traditional a tested first patient were similar test. XX:XX pathologic cohort of XX:XX determine did clinical a of National patients, from patient We we from of to a from from first older prospective result melanoma risk clinical population good clinician DecisionDx patients. had patients the XA XX and two test the retrospective studies, years Dermatology progression analysis, of at clinically large that results causes pathologic we've and causes of That's of balance likelihood test relates to those the the presented important a likelihood outcomes risk using

the our real prior patients. is is the studies unselected of in world standpoint of While to important from patient important population replication this far more test a second large reproducibility, result

it pathologic features test strong are upon as who is factors. the This melanoma readout, looking years. traditional DecisionDx addition as DecisionDx clinicians full XX:XX longer, as been received clinical melanoma solely clinical lived whose important results over who relies test patients a forward to received Specifically results. shows survival well benefit next in initial to several traditional of pathologic patients leakages a the in this publication We patients ongoing

As we draft catalysts, we XXXX expect think quarter. about the franchise end DecisionDx-SCC additional by LCD dermatology for second of the the potential

XXXX. with XXXX? months would has see we been but the DX in from timeline in was to the finalization That all in of XXXX finalization second XXXX. we technical that XX this in following, a at quarter to XX:XX And test submitted recall will first time, You of PALMETTO roughly of dossier Do in assessment the LCD second delayed. sometime expected review sometime half draft quarter XXXX. that draft LCD the We expect for

patients, Gastroenterology continue the clinical the here Franchise is As and we December of are part our our believe that the care strategic XXXX. results the acquisition expectations platform development and adoption of DecisionDx-SCC and test see having outcomes. the to our our and on decisions for we test need continue in plans, We patient of proud with improve the exceeded impact right our to begin of thing of what of XX:XX significant, unmet is we treatment growth Cernostics TissueCypher will is as spatialomics providing impact

opportunities and I hired, our team territories January. XX:XX to test team liaison hire clinical XX sales unmet Our business was progression esophagus previously dysplasia with discussed and utilize released to risk associate internal or Gastroenterology that what you consider clinicians of foundational potential a have stratification tests. areas in field cancer. Barrett’s areas esophageal can in to opportunity to designed high-grade proven XX:XX tests of early wins. support. and for will complementary commercial the grade adjacent a we test to us the address need commercial outside we sales reimbursement medical Difficulty] allow science generally that single plans We in the additional a provides in dermatology where regarding supported M&A, our a predict to That [indiscernible] [Technical we [indiscernible] TissueCypher or a half approximately trained use remind by to of second are playbook realize is

our and enhancements support with work potential for for encouraging clinicians, year-end will in including mid-year providers investments and upon dermatology sometime our providers expansion response, would throughput, to but continue XXXX our promising Pittsburgh market franchise of Initial spatialomics to strategy, to should that a XXXX, our strong test should Further, the outside our is results. have year year XX:XX already team reviewed test XX later a XX:XX plan or if our accessing for to test support determine XXXX, Turning with expect of platform. we Gastroenterology response is enable early on with early use expansion the Our believe as expected efficiencies further assess XX:XX ’s commercial we planned so The sales increase a number initiated as our needed. within TissueCypher TissueCypher headcount part laboratory progress GI than Our additional a is the and our our laboratories, that team increased expand We based response more XXXX. start look supported using and provide in and Esophagus research, of was in will workflow well a X progress approximately like end publications, exciting. in and we've facility throughout and assess automation, initiatives seeing with initial what from metric by focus optimization is providers. XX:XX as expect order continue of positive on execution adoption us territories. our expanded test peer volumes. to provider more to commercial laboratory the R&D and we in Barrett future significant ordering to allow Our multiple as of increased reconfigurations CapEx has new payers. market between to seen investments, the will and also footprint process we the Floor adoption for that successful we

Therefore, the As XXXX, results test and we you care nearly know, patients, increase believe uveal our or in Further, a was managing the significant this due growth diagnosed to part, are DecisionDx-UM in rate test in making volume in In COVID. XXXX. of in we decrease XXXX. the X,XXX standard in increase [indiscernible] Medicare for at up We XXXX for a our is flat in slight approximately XX:XX annually patients with the patients compared newly for U.S. X,XXX This XXXX $X,XXX, expect due our was XXXX, to estimated reports increase over patients XX% rate. provided over DecisionDx-UM to XXXX, even lost XX:XX melanoma. diagnosed

test the our remains Medicare XX:XX tests with the the are to in approvals [indiscernible] in on DecisionDx-UM steering Before $X,XXX. XX:XX at disease development formed we first by we received for Frank, skin I patient. initiated provide response. our development track XXXX, call for study enrolled inflammatory We turn to and to and for of believe our on XXXX, In update want committee XXXX. that's systemic our and leading field, validation the I launching experts predict end an over this rate therapy For

results the test I will Frank? will U.S. estimated expect what and the noted turn additional over Frank, successful last to add would XX:XX in an financial relating we now call provide who that As to for pipeline TAM. if XXXX? year, billion our detail to $X.X

Frank Stokes

the to execution continue to a good for well and Derek XXXX, positions that reiterate Derek’s afternoon patients, everyone. of million, revenues us we team. thanks over are strong Their delivered higher creating revenue per XXXX, primarily we the total value and XXXX, you, of XX:XX delivered and volume, XXXX. a a I led Castle increased In fourth XXXX full-year consistent to the an attributable investors. quarter XX% quarter the customers, revenues. XX:XX want increase Thank increase over test test XX:XX $XX XX% unit increase but report of $XX.X to reflecting in million the fourth for dermatologic revenues, to Overall,

resulted test. in will XXXX. key the recorded we fourth net year-ended effective which December unchanged $X,XXX, that revenue revenue which Medicare DecisionDx-Melanoma Our for significantly XXXX LTV For related December reimbursement and from positive contributing net DecisionDx-Melanoma our rate previous expanded became For things. XXXX, a these XX:XX rate periods. for of continue for XXXX $X.X and per XX:XX the Medicare rate of the XX:XX unit X, benefited for for the test revenue result $X.X for negative higher delivered of the revenues XXXX, you effective a $X,XXX will having remind of XXXX, higher revenue that test adjustments our XXXX, to million January DecisionDx-UM of also adjustments in quarter XX, Medicare I increase adjustments to we recorded is million from with

is basis. recorded first The we cash a from tests that revenue on

related prior or which in in reimbursement previously newer For revenue for periods will we And history XX:XX other delivered estimates adjustments Revenue adjustments final up or fluctuate to we to coverage. claims. due of sufficiently from over example, and quarter-to-quarter changes settlement down and include, test adjustments tests, time. upon second, our have from don't

on adjustments of the million XXXX. million generating anticipate to effects test $XX.X driven In in prior related $XXX for by XXXX, growth $XXX between full-year the revenue we consistent quarter, delivered in and plans. further excluding XX:XX revenue, our the million million for revenue, periods $XX.X adjusted was and total execution Our

in XXXX for growth to and growth the volume we increased to December December we our our successfully approximately obtaining representing Additionally, headcount, total exceed XX:XX XXXX support our rate we on further continue XXXX, on December alignment from port XX, order growth which is XX%. expect to in For increases over XX% XXX XXX and goals XXXX of to XX, it revenue and anticipate the for expect scaled XX:XX headcount from reimbursement approximately our with be coverage. there in XX, we our to organization rate In growth in execute on plans, XXXX number. XXXX,

margin XX.X% the test the for with associated revenue periods we As in as for likely in advance the gross for was prior compared key XX, we decline, XX.X% discuss range increase and in As the related investments previously we is expenses compared XXXX, personnel mid-to-high driver period the in quarter effects anticipated investments expected laboratory gross related and XX:XX the XX.X% for employees. February near-term, increased of XX:XX excludes expenses I to compared and and include XX.X%, our in additional report quarter, XX.X% support growth XX:XX to of same that XX.X%, to the a acquisitions to margin reports in which expected our XX.X% expectations in intangible in resources. during XXXX. volumes adjusted delivered our gross asset amortization we two XXX in moment fourth in XXXX These XXXX. year, in fourth coverage. will up was quarter our in of and XX.X% of ramp Our full-year had our in the single-digits and headcount XX:XX reimbursement facilitate for XXXX Our was discussed, margin gross will our percentage obtaining XXXX. margin, to and a the

large to recent largest The Additionally, XX:XX increased intangible attributable increase XXXX, the associated as well year, over following which personnel for plans, our amortization in increase million to the for of We the Our ended our the of lab, ended negatively for December margin prior we creation as million compared as compensation will associated assets XX:XX amortization associated run also confident designed enable a sales by and higher were Total includes be compared GI, as and further full-year to XX, our growth support SG&A, continue to headcount. $XX.X with in gross we costs XXXX. with was prepare $XXX.X clinical for compared million acquisitions. to driven the XX, attributable higher anticipated we including $X.X XXXX stock primarily XX% Derm, increases acquired by part $XX.X $XX.X assets expenses activity. our $XX.X allocated the to discussed, we for million to December we support for XXXX in scaling million expenses, total to intangible million sales, with million, cost to increased with XXXX. our benefits XX% research primarily to and well our the to and based and to GAAP XXXX driver increased costs which the generate These the increases accelerate plans R&D of as the and stock-based XX:XX pipeline our XX:XX additional continue of marketing year our volume personnel by XX% personnel comp, and SG&A excluding expense fourth investments clinical additional continue teams, the in to of normalized includes $XX.X to support expect quarter, study to to DecisionDx-SCC, SG&A of costs, $XX.X primarily higher ended R&D and headcount of remainder increases for compared by increased stock-based are million the $X.X expansion hybrid cost bonuses, in for as increased training million as to is and by among Pittsburgh attributable was and XXXX, associated events, clinical administrative return by plans, peer-to-peer XX% travel conferences salaries, to manage XX:XX XX:XX and expect increases costs. full-year were for as long-term well in associated XXXX, studies expense programs and sales year other DecisionDx-Melanoma. non-cash a sales, We as our the value functions. through TissueCypher expenses the increase tests. totaled related full-year, XX:XX increase forward for compared our XXXX. expense, headcount, our including and to and of December returns in-person on promotional expense impacted The of operating expenses to This compensation. by in which in to XX, expect quarter cost to our to it's Looking our increase increase R&D XXXX, with XX:XX

in expect We XXXX $X.X expect driven XX:XX IPO of stock due ended option increases in non-cash headcount. higher include we teams The all growth prudence our in expense stock-based by Cernostics. income to Derm to GI. continue optimize SG&A to significant XX%, XX% December $XX we increase to $XX increases around compensation, as by be million in and categories the which XXXX, to for commercial additional Expense awards and benefit year benefit directly non-recurring non-cash tax was XX:XX to outstanding attributable post the in Income valuations XX, tax was million. large to and million acquisition

ended portion operating capital. positive period $XX.X X.X X.X XX:XX in the million of loss ended the as of the the XXXX. of assets, the taking million margins, loss marketing non-cash and creating XX, we allow share net Finally, equivalents purchases and December on and XX balance Myriad priorities Diluted well evidence in expensive $XX.X to XX:XX fourth Investing as of XXXX attributable compared XXXX. long-term a These $X.XX, sales share our the loss of XX:XX we sector detail for in on In teams X.X sight the Diluted share continued and cash macro test. that [indiscernible] making XXXX develop warranted XXXX strategy, of focus quarter in XXXX, the shareholder cash you could commercial in believe growth our gross want and with volume. Melanoma further offset of for was of near and compared full-year understanding is and We're required resources the profitability. growth an in to initiatives, assets net cash acquisitions of diluted pull fourth strong line position testing, top-line as path to December million existing investments and to flow test periods Medicare foundation very were significant million cash primarily loss shift property and build a $X.XX, $X.X as to our debt. myPath associated net allowance flows optimization had understand was these the negative continue we to during EBITDA what of growth of XX:XX infrastructure, of our in equipment believe million, continues in mind, maintain GI XXXX assess same bolt-on to performance to for environment X.X will for COGS to of $X.X for our reimbursement, R&D to primarily outline impact compared areas Adjusted compared our comparable XXXX. the our cash continue full-year million, quarter pricing fourth company . the better recruitment cash neutrality, the for advance million and per future to pipeline were working loss diluted months to $X.XX diagnostic fourth was that deferred and in Cernostics of XX, of XX:XX of leader to As was release that. reminder to a include we’re during value. and positive supports X.X our XX:XX the no including $XX.X The of turn adjusted to future However, million million million, include a was our attributable deliver and in continue million used in XXXX at was R&D a to our XXXX. place XXXX. XX:XX and share XX.X of With secure $XX know, liabilities we per for operating changes was our Our the that Melanoma net XXXX. XX, call test, we'll payment tax activities lab With and increase build It for fourth the used in with million, a months XXXX quarter myPath compared was XX:XX Derm we activities significant closely operating in the respectively, I the growth and demonstrating million even loss accelerated per well XX:XX and plans quarter compared from our our $X.X the as opportunistic efficient to XXXX. M&A. levers $XX per our efforts, this And For quarter $XXX testing in $X.XX valuation at and investments profitability. As as acceleration was of Cernostics, monitor a our sheet XXXX quarter loss profitability. and for our loss charges and back of $XX [indiscernible] teams, body capital priorities full-year we million, XX:XX to in allocation fourth XX deferred our growth XXXX, to million. a to strong our due we and our Specifically, evolve, net tax of appropriate and of XXXX, aggregate will net million back our we an over use of of the $XX.X loss, to that, and as December use effective cash net marketing flow Derek. continued the to I'll partially the by our for us million for the

Derek Maetzold

conclude would to you, Castle Frank. by our like XX:XX today Thank I team. thanking

progress forward now Q&A. is XXXX. momentum this concludes XX:XX in interest are for Castle. excellent look This in accomplishments. XXXX our Operator, you we in continued remarks. Thank their to to for your Our We due continuing

Operator

Mason, Our XX:XX Carrico question line first with your Mason goes Absolutely. Stephens. [Operator to Instructions] open. is

ahead. can You go

Unidentified Analyst

XX:XX Hi guys. This Thanks is for Jacob for Mason. questions. taking the on

Just us. for a one quick

of subset sales you've reach you GI your do that high XX have? how clinicians XX For currently think force, with volume there have the and the identified targeting maybe or was you wondering is can [indiscernible] our reps much initially? a you I

Derek Maetzold

the a question? a sort patient Gastroenterologist, of them reasonable limited a question. really seeing is of sort a slightly not commercial the since kind opportunity work, for XX%, of represent patients majority sub-set, that at acquisition. lower Yes, ablation maybe will, that are is target There or Gastroenterologist XX% us. of Hope group here any but esophagus, more and before higher of throughput might the clinicians work they certainly course, you maybe of Gastroenterology, diagnosed who with XX:XX GI it's of of XX%, of Barrett’s specializing could within there a answered who be in kind targeted wide [indiscernible] excellent referral They have call list wasn't do Cernostics open effort which

Unidentified Analyst

Yeah. did. you. XX:XX That Thank

Operator

Thank you, Mason. XX:XX

with your to next open. Catherine, Our question Schulte Catherine Baird. is line goes

ahead. You can go

Catherine Schulte

first assume melanoma where XX:XX Hey for of and access TissueCypher what the the I in guys in does questions. guess for that trends a and for diagnoses? are there core terms web in revenue the and thanks the on assumptions business, recovery guide,

Derek Maetzold

XX:XX Hey Catherine. Thanks.

[BAX] but slowly it It's excited we've yet. give have whatever they in trends of is, as aggressive the lag test as So, today, we're a maybe. a today. it's guidance bit days it you based resurgence not know, diagnoses, on too that. it's we see good business about the feels COVID but like or but And great as closing still flavor got [ph] but on a we exist there TissueCypher, from predicting in not and XX:XX team, gap or conditions we access. the the we're We're There's do or in little new early commercial being

in see to baked too want we for get go conversions before So, we the TissueCypher. how much

Catherine Schulte

about how or number of calls sales you rep does I of think Okay, maybe be that how given in the volume calls calls rebound fourth expansion, talked but got terms XX:XX XX% quarter, to pop does just per pre-COVID of think I’d curious being overall to it. in your do And the person just much be levels? you there’s a calls, of how in still compare here? from

Derek Maetzold

Yes. XX:XX

think almost it pre-historic, So, right. like pre-COVID, back seems I to

in XX pre-COVID – levels, and you from went-up XX we we think were public. to we to just expanded XXXX before sales just December had XX representatives to If went back territories in XXXX February

went FTEs So, in course representatives as sales of XX-ish XXXX. off the listeners the FTE middle And from mid-XXs year. probably probably XX for maybe whole year. So, the for base is the of we dermatology probably year, maybe the of the XXXX the XX:XX pre-COVID the the to recall, the of just of course will was the comparison of XX

So, XX% we've calls seeing course with And that two third kind those of, in-person compares more of quarter had to we the and same mine, of quarter than half fourth are XX:XX XX-ish in XXXX. certainly in XXXX had of being in second to than XX-ish of with XXXX. the more we the

We our, of calls still day. per of below sort are a little in levels number pre-COVID customer bit terms of

the So, around we think out pre-COVID XX%. opportunities that calls is don't year. essentially release we this just reflection that the per having in of to shy to that don't reported that and quite quarter were think U.S. day. there there. marketplace know reduced number reflection a a XX:XX of the COVID is of not quarter, bit that sort I across representatives improved for for or it a the Xx but levels sales I say of answer. point I I third did of back didn't We XX:XX What fourth now. So,

present is to fourth us information different to seeing conditions that these clinical for case, we're it's testing our feel we And viable we see representatives when our I this their think of the think are still interest to a to customer. XX:XX expert in solutions which the comes a probably per that way of fact three dramatic throughout to having is we clinicians test manage number customers. day, mixture in the to you and it single to it territory, be to products continue look So, for quarter customers the [indiscernible] In XXXX, that or see improve. won't in our there I genomic that person, and room but they the

access I think we throughout have why that's good certainly. XXXX

Catherine Schulte

Thank very helpful. Alright, you. XX:XX

Operator

Catherine. XX:XX you, Thank

Our is next with question goes SVB open. to Puneet, your line Leerink. Puneet Souda

go ahead. can You

Puneet Souda

thanks XX:XX for question. Yeah. Frank Derek, taking the

two get I'm have queue. question, I and and that the one going back to into So, sort into wrap

going based like provided, Frank So what an has investment really it to first you. one, year for on seems is be this

some the burn the you and level XX:XX for patterns among expectations for at in see update your the just ordering one, taking of high means sort about of Derm you cash for wondering DecisionDx-Melanoma XXXX? if that this you this thinking mentioned, and broad could overall cash being the I your we EMR the use last XXXX gross talk guys. profitability, moderation system for And do when Thanks us from expectations margin maybe maybe to breakeven questions dermatology long-term that change mean, practices point? around EMR you And and expect should So, could at a is does that the how Derek practices? maybe those what flow

Derek Maetzold

Frank I So, think and take I'll XX:XX handle [indiscernible]. last the cash one first the can

Thanks Puneet. Okay.

understanding individuals. and dermatologists are MS from based And practice think dermatology perspective. as So, office that because system built is towards modernizing are that's by is our largely the of an medicines basis majority System in system we EMR procedures it's office private the I market largest a EMR vast share know,

and the see flow location is end must then It's yes plan associated is of couple example model. of cash patient DecisionDx-Melanoma and a the with physician when test a go as to i.e. a order their form of have you pathology the the system. kind melanoma, there’s reports. That's us, dropdown one to where both of an sends sort It We doctor, that as dermatology DecisionDx-Melanoma clinicians a and you'd sees do that off now Biosciences of to sign fits those of options our well certainly from So, that Castle sits. System is XX:XX it up one of want any So easier. on ordering the as makes The take to that that just in the that's treatment smooth all a to patient expect options pops say system. a and ahead EMR what go menus XX:XX what's clicks down who's Castle diagnosed ahead next, that that test.

December. in being of signed now I with agreement out the So, just what XX:XX does that we're rolling that terms potential mean think upside? in

appropriate our in might expect sort impact, be, be would it's practice, using patients Friday less, DecisionDx-Melanoma if have too have on for customer say, who's would seen loss we to early I So, would expectations that this example. customers a a but current of for see we their we afternoon,

And that sort know just always patients cracks have who in there. appropriate here the because there a that gains, customer of so, or reminder some we were fall through advertising we might

believe [ph], time. we do area that's you So, I see, are is or it that to some might dermatology aren't based they is do you [dabblers] with maybe there all see actions our frequently melanoma there, XX:XX limited they who our our say about one upon of of customers the thinking or test bit interactions but here improvement. don’t it know a or use

doesn't in time. that hand maybe clinician XX:XX be think actually of think get of mind far opportunity test about? initiation, or like either page of think test us some I DecisionDx-Melanoma to appropriate that as I that's sort front our I the to see a what a but terms out and that orders drive of in I dabbler in getting her do on of his will have want adopted recall. a of look XX:XX to we having it, think improvements that to of who thinking to enables right kind I advertising just not number a individual, doctor proving coming expect to may having who kind to it's clinician should all to reminder forefront of plan sort has or stretch of you're had drop zero treatment that think Does forward tests test of a access have a them there reminder the ignore opportunity wrong. opposed the use down the So, to or reviewed of

Frank Stokes

XX:XX Yes, Puneet. add finish I question the and will

to This be various increases right. try in an as some year see down we the we the will what and you’re categories did to granularity So, investment get P&A.

we have, see when volumes However, impact certainly the can we see line referenced when and you good You'll the you earlier. squamous volume were to to to certainly for in Medicare very getting XX:XX sight that growth think on continue want on We as revenue report at exceed important due have have it's I XX:XX by – XX:XX reimbursement gross adjusted look cash know, we would volumes be – still we Derek that. gross be example, going the neutrality, and we flow flows we're deliver as So, appropriately what and if run mentioned, Cernostics an myPath both paid do in begun you to with to reports. we margin serve patients that have with those break to reimbursement and to test the at There's offering then full on margin, to that of cell, them take through run the And place. Medicare intangibles the for cash growth out flow the cycle delay out COGS amortization. associated a line.

to view the how performing. offer better So, of out that we've business is taken a

margin place, on gross consumables. our we've think I see and continue to instrumentation delivering is XX:XX but be all three Derm with said, in same exactly this similar we're same the All the these very tests, of the people key. reimbursement We tests as run without very, impacted the will by Derm tests

those for dollars. a really difference is three tests handful just COGS the So, of

right and we're being will get Melanoma new gross little on is operating we nearly of reimbursed were was without [money] water go like a durable. look XX:XX the way year, all launch big on remember, test so, as reflected a important when is brings be the tests. what's It the drops and already test our we we'll prior cash mean when have resulted and reflected – providing is that that that that's marketing those generate down the through revenue to but what XX:XX way income, to the place, in to reimbursed the And it it that because down. the will report. we've a for in proforma And COGS deliver that order have do the – drop in of would that we've and I Now, margin [ph] the And very sales environment test. do all sort the impact. reports already our tests, to accruing gives reimbursement down So, we to without in bit tests, the what now, the I for impact so the effort if of that we think

Operator

Thank XX:XX Puneet. you,

question open. with Our Paul Paul, Knight is next KeyBanc. to goes your line

can You go ahead.

Unidentified Analyst

as seems high XQ. of Omicron in volume is you This wondering you guys. over level on It and your there’s overall out kind to think business how – for of impacted good we Hey Paul. the if called talk call in XQ. volumes in guys Harrison momentum was growth just XX:XX could I like as terms well I a

of kind Omicron how there affected quarter, seeing just kind you're the of guys so? So, in you wondering what

Derek Maetzold

XX:XX Yes.

out thought a So let here. me have

were of maybe any down, we sort that so of number did sort So, in reversal not that or sort access of thinking sort of achieved. top representative day calls see per

below So rates overall, a diagnoses of in melanoma nothing on I of was fourth perspective. XXXX, that did We reduction XX% promotional overall sort compared responsiveness XXXX the about had we quarter. the that for perspective think X% from see XX:XX XXXX the in and

at down see X% part in down because impact in or I and was, fourth probably perhaps of tangible the down probably the can there know in X% impacted return Harrison I in terms it Omicron X% three just XXXX, diagnosed flow versus So, in terms by of quarters of cancer other patient continued fourth was we have to patients the [indiscernible] that of believe came been quarter. had quarter, only is X% I don't to in skin the that So, Omicron improvement ratio. compared by the saw XX:XX that it

Unidentified Analyst

I as And Got XX:XX it. follow-up if could well. kind of just

years seeing following up the find trends might place here OpEx, outer in overall how increasing OpEx in guys kind you we're generally in of headcount the and that think about to a do Just headcount on where the settle?

Derek Maetzold

XX:XX I’ll cover side, the Frank. cover salesforce area and or you rest maybe can commercial So,

XXX Frank may dermatology and in to I as It terms Stephen’s maybe in up of, response to end sort investments, out mentioned representatives. think of time, we marketing earlier, that peeking think over XX sales the think I question, we

right overall. we in larger probably mid-XXs XX:XX We’re it have that’s to sort bit of about a little representatives matures, Gastroenterology bit and that a now. fully when appears, Most have dermatology, they dermatology because think that of groups in kind a XX:XX companies in is a range the if of single and they're there. little line lighter maybe part of is number

of So, point. of [XX-XX] you number, call a perhaps in have Frank you XX:XX over more bag, do It be personnel at out. sales What our and a those think multipliers. liaison you support of customers think time could on those associated Can single catch the Gastroenterology a rest marketing inside can we over associate between organization. the comment offer sort So, that's probably and but of number can you have ends over [ph] at the science, we time the fraction picking up. sales I are medical as products the of is that reasonable

Frank Stokes

XX:XX Yes.

marketing. in is and R&D in the So, what see most there, growth of you Harrison as

In center part part generating lower. terms of increases of much non-revenue business the of cost the are the the the business, or

today, I of three we're most is, revenue that. opportunity and guess is certainly committed Derm of And is, in [XXXX, drivers of just these each excited penetrate are the I as exciting expanding the last begin have and say tests keep penetration a now, GI here thing [ph]. would where growth in tremendous that's So we of that side to to will we those to and each on the the drive XXXX, XXXX] we're sit our market that possibilities as of and the business areas we

Unidentified Analyst

guys. Thanks XX:XX

Operator

XX:XX Thank you, Harrison.

Our line open. Canaccord. next Mikson Kyle, to Kyle your question with goes is

You can go ahead.

Kyle Mikson

for covered, questions quarter. taking I was advance, if in had congrats touch the a Thanks. apologies but XX:XX guys, already on I Hey, anything the you. that few for questions, just on thanks And

first So, again in of hit on Omicron, first obviously the in the it kind quarter quarter. hard or

if how that you that [indiscernible] the wondering was below think based of XQ diagnoses, come you will far on, all process talk how level? of I Thanks. year? could relative then think sort was And baseline do above about was I percentage X%. the that, throughout thought the Melanoma that like January, below in like So,

Derek Maetzold

no, no, answer. the is So, no XX:XX short

a party Symphony to purchased out. kind of a of diagnostic So, weeks month run They weeks X third before the data sold after diagnoses we quarter, interest of anywhere month of third our in from close from X that Health. sort are

look So, like, little to it [indiscernible] should we're a but nearing honest, what there's be still.

XXXX. getting don't you in terms holiday a of be exception uncomfortable January. fourth might were XX:XX I'm issues, fourth of different quarter couple but you've be average of The number a to worsening and a we honest in of quarter the only day issues I January, So, think in what saw you be snow there little maybe there. is, got if the in it a couple a

New would do of week variable to X, analysis. December January is Day XX:XX we have per I canceling cite day when showing So, January of diagnosis able be over. to people based think of pops to Omicron first sort we upon So, on the that were weren't see XX data that of example. for We kind typically because Year's have quite a don't January don't in any heard we'd up, that a this. I’ve personally patients

sort your of see nothing just impacts. COVID seasonality probably be to think I So, would and more that related would we mid-winter typical

Kyle Mikson

earlier. side you you to Derek, I [indiscernible] the – I kind would you XX:XX do have up GI sense, going great. with you are what And of Okay. of that investments XXX year, that the, noticed the for expenses, or think And will the guess. Derm with balance curious guys Cernostics? Thanks, slides side, sheet just guys be [indiscernible] did the of of which like picking XXXX, And was and the like deal, helpful. this next guidance the myPath kind for the I strengthen I'm make heard like on you're I ready if would million components saw obviously in the you things was the about you

thinking what you're So, like for year, I’m this year strategic terms deployment next and about forward? of just curious in capital like going

Derek Maetzold

Yeah. XX:XX

the about of talk of pre-IPO we've maybe mind. a been hampered, impacted in not terms couple in been thinking I’ll but COVID So, little last that's what years, by

balance I one, sheet as earlier a have out without a corner strong us investments you worry, XXXX perspective. to, in we a think the So, sheet being pointed to very about number from right make balance having

tests looking call to completion staff] we're our [ph], dermatology time investments. great to pipeline of dermatology in refined XX:XX my that's So myPath be a XXXX all could six organic is have current assets with or could to six that two five dermatology we that My be point. commercial and in. our pipeline, is place hope or successful XXXX at or commercial three if of offer come they're fold-in programs a put it additional [around to products like that call seven hope, that kind it be to or Those in we only

better we there, more was, and they became, dermatology, internal there making assets be well Gastroenterology call where number points out call only that a access came that look areas or are interesting commercial XX:XX the to question want conclusion we time. perspective there of was just a those but esophagus, advanced informed all pony like build and really could this Gastroenterology the clinicians in if our of from do point to In at believe Cernostics one And look wasn't we interesting and So, and on our had you in Gastroenterology, decisions do that's Barrett’s for trick in it are interest a offer yes. diagnosis go actually XX:XX some thinking through along.

by be perspective, here the use in in or just in Gastroenterology will two Gastroenterology tests marketplace I have – or we'll my from expectation – that but that XXXX, customer our hopefully will one four well received for have three not would base. So, three is or that product,

might come Now, opportunities. They come acquisitions. from from those internal might

other something should marketplace of the is that's say, the was are that at. do a of will that table like point we interest at Gastroenterology a XX:XX feel question And is out that in areas in other are So business build in acquire, dermatology, organically cards Gastroenterology there we're should our that where course, of test we dermatology another looking years, in to comfortable we we on there certainly this and yet believe we couple those a have time. one looks reflect and or diagnostics

Kyle Mikson

using, from well. going confirm, you kind dermatology, that spatial mean I great. leveraging to stuff want be Okay, be spatialomics and or GI kind is platform test just TissueCypher want about just that of clear forward I then for XX:XX are that And to expand to could Cernostics, that. or going to, I the oncology of using as

Derek Maetzold

have excellent time answered an I around. should That's question. first XX:XX that

as company, our So, say XX:XX interest. we that platform the look approach. we a of using mirror will guess from really I at tools spatialomics limited using all profiling limited looking we experience or asset Cernostics think you had other gene ourselves I discovery call nice, and certainly it focus as predominantly AI is on could expertise in expression a

because opportunities. pipeline I one potentially And might and saying, is both to kind at So, internally, to answer expertise the have quick this as that we'll we a is of look think platform gene let's it, expression our right expertise opportunities go spatialomics let's and that. think pathways, own We and space ahead the make be limit there profiling, take with about technology you nice that Gastroenterology through call sort dermatology leverage and certainly the one we area think go to additional XX:XX in for that pickups of specific not just pretty additional programs of that we call now in-house. may question would free, I platform. can

Kyle Mikson

Great. XX:XX

questions. Appreciate Sounds promising. Thanks it. for the

Derek Maetzold

XX:XX Yes.

Operator

Thank XX:XX you, Kyle.

Our Capita. open. to Flaten last is your Street Thomas with line question Thomas, Lake is

go can You ahead.

Thomas Flaten

guys. XX:XX Hi, thanks Good afternoon

be you're about been Just hold two prepared data in to forward that? should would on How you data? far questions. publication, data, the that the comments linkage off until we that know SEER you or your run going so mentioned more recent quick to that's you to based are respect looking additional With I a think you with do

Derek Maetzold

question. Excellent XX:XX

data looking in purposely we analysis SEER the of just initial of January at So, dataset. that the the a an presented earlier subgroup dermatology overall at

is that the So, out. analyses part is recent complete publications our as we’ll that fuller a going expectation of primary population have updates with linkage here the

Thomas Flaten

on XX:XX Got myPath. it. one DiffDx, the And then

service guys reflex and indefinite run the myPath trying provider? keep level? if XX% kind done the at you the you of cost result is think to level get of it you just [ph], just of and Is and to results [DiffDx-Melanoma] that of an to economics about the your So, I'm how initially kind to guys at that it? that you of blinded think

Derek Maetzold

XX:XX Yes.

that an in that do myPath, on came we this So, where the a subsequent, with first, back the run we alert from processed clinician score an situation that – intermediate same DiffDx-Melanoma on do intermediate sample with the report, indicate while think we and for you're it so don't myPath with they say and them. result that don't both two do issuing at we from in should we that so perspective myPath, that XX:XX time, could have results, go that's test, because you Now, this point appropriate. yield we we

Thomas Flaten

the Appreciate Thank you. it. Got XX:XX clarity.

Derek Maetzold

XX:XX Thanks Thomas.

Operator

registered no at There questions time. are further XX:XX Thomas. this Thank you,

management I team So, the conference any for pass to the will over back closing remarks.

Derek Maetzold

fourth for our joining you, Thank in quarter operator. Biosciences. for today again full-year earnings XXXX Thank us and you Castle This and XX:XX concludes call. continued interest

Operator

you That your for your lines. XX:XX today's And call. concludes disconnect Thank may participation. you

Castle Biosciences (CSTL) 1 Mar 222021 Q4 Earnings call transcript