CSTL - Earnings call transcript Q2 2022 | Castle Biosciences, Inc.

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Operator

Good afternoon, and welcome to the Castle Biosciences Second Quarter 2022 Conference Call.

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

We will begin today's call with opening remarks and introductions, followed by a question-and-answer session. I would like to turn the call over to Camilla Zuckero, Vice President, Investor Relations and Corporate Affairs. Please go ahead.

Camilla Zuckero

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

Joining of and call to Information Founder, may be accurate. Derek Castle's page if of me is today XXXX. X, President call A the replay only Chief of company's Therefore, Officer, today, August 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

TAM earnings we related today Private containing items future Reform operational estimated statements Act Before impacts market that similar future made will financial assumptions you our referenced contain statements U.S. performance, statements COVID-XX the remind of XXXX. forward-looking of and the Securities and Litigation These today the or like including but to, I our or expectations in projections or the limited begin, issued our forward-looking are statements and not to addressable of about statements total to events outlook, some pandemic. of include, financial the within regarding release our would meaning

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

of GAAP EBITDA directly some financial as measures in the believe in with Investor addition, in not turn and useful in adjusted gross adjusted cash and that today should been provide principles non-GAAP the to generally Relations website. financial business now In accepted issued to items of which includes and calculated most results. These margin, used have GAAP. financial United earnings information at release to be adjusted I measures page revenue, flow We assessing on accordance the posted been are as States in not accounting the such the presented operating measures for of addition financial metrics comparable our a supplemental any adjusted non-GAAP end discussed earlier substitute has these over today, Derek. the these information will GAAP tables non-GAAP performance. call of company's Reconciliations the or the

Derek Maetzold

XX% XXXX anticipated growth half results XXXX. full representing XX% momentum and at million, share to another Castle when in by test volume our our when first $XXX to the on Based quarter, Thank revenue the we total good to we've Camilla, compared afternoon, our and year compared million to increased pleased Today, you, that of growing quarter everyone. XX% the in Biosciences $XXX of the are year of report business, by delivered least strong second to XXXX. revenue and guidance

take the through through of I of from to want continued will in thank quarter, we Before employees we financial dedication the and innovative their will work discuss Today, I your more mission improving to highlights detail, execution all hard patient for Castle will for and guide that then the provide and Frank during and highlights the our tests quarter take health care. quarter questions. you strategy then period, our

our business. dermatology start core Let's with

of reports. XX, delivered And test saw a ended X,XXX in XXXX, clinicians for of skin ordering XX% to increase combined, test report XXXX test cancer compared our second XX% and For over second X,XXX June quarter X,XXX the first months volume increase a the the tests. and delivering for clinicians quarter we quarter approximately we in six when the approximately ordering total new XXXX, dermatologic

second For quarter test the second increase over XX% quarter, reports DecisionDx-Melanoma, in X,XXX of delivered we an of XXXX. the

current in That second upon third discussed, of investments from or of our we volume want we is largely growth this to had down diagnoses or we prior flat typical the to seasonality the is sequential compared thoughtful, half of to drive what quarter, And is is strong quarter business the quarter. the slightly melanoma growth believe rates COVID. a of year, typically quarter compared believe the or second do down year that quarter third-party assets our our our XXXX that tactical report of remind organic strategic diagnoses and growth we on I trend then third result flat. the a continued analysis seasonality down growth, As continued flat which saw test midterm. fourth slow of become dermatology remain generally to estimates this and and data, preliminary Based near-term with where will the we is back for believe to our plan. of led the you both to execution record

as diagnoses be and However, to they continue we XXXX, first we the seen believe but below have trending quarter of XXXX throughout levels, pre-COVID overall are upward.

XXXX our specifically. about talk in let's context, that in So performance

Institute our While most the data, compared and in test of clinical or of drove significant with to the report on increase that sequentially our we believe factors registries the portion We volume XXXX but cases. prior DecisionDx-Melanoma was due of program's of key initial small number that the observed. we collaboration diagnosed in presentations with not accelerated data including we an tests increase National new are analysis DecisionDx-Melanoma to iXX-GEP newly expansion our data the data, of driver the of the that our a the that based SEER combination quarter first data believe seasonality the from penetration coupled melanoma commercial meaningful these linking melanomas, third-party Cancer diagnoses from the was cutaneous integrated upon believe, investments, with

sales outside additional was make our optimizations our offerings. with all some our three plan skin As team. we of number dermatology our team our on have XX equipped discussed, commercial we each we routinely and outside to And of In assessments, territories. the size to of we mid-XXXX, size assess Based the our roughly dermatology team cancer to territories. of representatives continued commercial commercial sales increased the of

shift our its new starting of for focus the of that proper sales current diagnostic for profile DecisionDx-Melanoma both allows mid-third expect of dedicated myPath to all offering value DiffDx-Melanoma tests. will team team gene expression our only. Melanoma We expression commercial profiling and dermatology focus cancer diagnostic have our will offering DecisionDx-SCC believe The quarter, a adding gene that We a test our on team. dedicated consists and skin

dermatologists. Our target dermatopathologists, customers remain for some the diagnostic GEP offering followed will by

We are responsive. have promotionally of that seen our markets all

for provide Noridian a DiffDX-Melanoma. these historically, offset Palmetto LCD of to two team beyond. each that expense. a Further, additional continued our will believe criteria productivity and in reps draft it optimizations terms expenses, commercial to coverage June level quarters sales we in reach of posted our additional to will XXXX contribute their dermatology taken So to has for and momentum In XXXX, about

we of effective recall for LCD date, a of quarter that and Melanoma XXXX. LCD covered be Based may final draft Medicare. second myPath already the benchmarking the You end is will final DiffDX-Melanoma believe the upon by reimbursement between by posting the

XXXX, Now our to On Novitas, OncoKB following has posted let's is test, expression from been of databases at DecisionDx-SCC reviews rate pricing. second Oncotype test of review and draft NCCN. databases; of that by proposes which to test. Two profile and we've $X,XXX our receiving of a ClinGen, not biomarker quarter yet, reimbursement of a test, not and DecisionDx-SCC completion oncology knowledge, medical prostate LCD upon our on per turn evidentiary breast requested gene to DecisionDx-SCC. In Novitas NCCN do and pricing review attention from Oncotype Novitas three identical X, our DecisionDx-SCC to rely the the reviewed a sourced June XXXX,

as will LCD be LCD proposed, a DecisionDx-SCC quoting covered then in not proposed and would this included as associated might whether finalized as the be what if draft billing any predict finalized test the final such, article. of As or We cannot timing be.

Now franchise. our let's new gears switch GI to

reimbursement test As Cernostics and the in December culture, the acquisition Castle and XX with their transition acquisition we what improvement of made laboratory TissueCypher commercial XXXX. a to where six for addressing reflect period months strong a XXXX including rule. months our is integration, growth to would a we the We as and building in we first CMS expected XXXX the and organization the team, nine strategy beyond. believe alignment this a Further, to out reminder, of completed of we day

XX we patients. First which few quarter XX, which rule, we performed the the Medicare's was on the accomplishes process our day and goals, expectations status discussed, simplifies advanced diagnostic with or from being laboratory consistent test Also Medicare most granted have expected. as TissueCypher March as exemption for billing ADLT important a

expected. seeing in milestones we and as second context, the the the these announce in reports quarter, to delivered up XX pleased reports growth quarter With trends test we monthly that very are we XXX are from first

XXXX, TissueCypher. XXX,XXX the use still the the stages innovation clinician or early we of beneficial Barrett's Clinical for test and The started of TissueCypher, on esophagus, published Association the of TissueCypher with Barrett's American advances AGA practice the to esophagus. nondysplastic which launch Barrett's market guidance update This or for patients are to in was July we year esophagus X, Gastroenterological update to inclusion with clinical of that Barrett's we regarding third risk Update. approximately the in provide approximately While the esophagus per XX% surveillance is with may quarter of for on endoscopies purpose AGA's represents intended be screening stratification states believe and Practice

team from the And to second September, test. we planned beginning July, and Given expect we are in into for our first our additional TissueCypher. through TissueCypher momentum our territories add on quarter executing for commercial investments

period equal rate the relates sales March XX, Effective the status as based XXXX $X,XXX XXXX ASP is from Medicare for on median This rate to collection test, allowable XXXX. initial XXXX. rate TissueCypher. ADLT will was modified was per the through payer list January rate through the thinking X, was private to average end price it XX, Finally, the granted effective about When price for which X, XXXX, the reimbursement test. the the April or be August of on of

health our mental Finally, let's turn franchise. to

of integration acquisition are XX. which We closed of stages on AltheaDx, in the April our early of

We performance to expectations. initial and is are progress, extremely with encouraged consistent with the date our

XX. June through XX April from reports test XXX delivered we Specifically,

approximately team. of anxiety $X completed well-integrated will commercial standard compulsive to unmet territories disorder, area and XX efforts for coverage enter offer of $X,XXX. in expanding lab one IDgenetix deficit disorder. has of need, enhancements well U.S. incremental Medicare enables mental acquisition bipolar and with following XXXX us health is obsessive by our depression, an a with a beyond approach. depression. June, Our allow disorder The approximately to disorder, the tests The outside depressive the is extended our in impact solution disorder, Medicare and care PGx on the stress an other to in-market billion X TAM trial-and-error multi-panel IDgenetix believe team panic further clinicians that seven disorder, conditions additional reimbursed currently patient our going sales accelerate and care attention includes potential disorders, schizophrenia, personality patients with expectation of training hyperactivity integration approximately to and we Phase test major us posttraumatic integration of are at that including estimated coverage and test two offer significantly by Medicare Recently, high for IDgenetix over coverage value clinical

corporate over XXXX, we will Before to initiatives know to now our our provide creation. I over update to and in-depth will growth on want September an and continued you call details guidance. the the value relating updated to financial call long-term an let to Day XX, on I host Frank, to turn turn provide Frank, I that plans details results who XXXX will revenue More come. for Investor

Frank Stokes

to raised of enabled The you, guidance and strong quarter afternoon, $XXX good anticipated for deliver and has Derek, growth, $XXX the revenue execution another have to to of we of total from million strategy million Thank everyone. our XXXX $XXX outlook organic us our million million. to $XXX disciplined previous

to primarily volumes primarily $XX.X reflect Second to of increase DecisionDx-Melanoma quarter Overall, each of our easing was XX% increase non-dermatologic we compared our increase dermatologic XXXX, revenues for dermatologic also expansion delivered and to million patient XX, dermatologic discussed higher the in earlier, sales our a tests, effect potentially XXXX. to quarter consideration, an revenue as a flow ended Cernostics higher our $X.X of due Derek Medicare revenue $X.X and and a COVID-XX the XX, $X.X in to acquisitions of AltheaDx. on increased effects adjustments in was revenue which other revenue mid-XXXX higher higher revenues of the the XX% test was from million which DecisionDx-SCC, tests force test reports three previous associated June million, offerings, increased months were The delivered positive and of attributable June of attributable across estimated was tests, periods The DecisionDx-SCC. negative combination the dermatologic three tests, with believe in changes primarily of revenue ended variable primarily XXXX. second in the months over with from increase to reflect attributable payments was million for The related in the and restrictions.

related delivered over XX% prior million, XXXX. tests revenue the second in quarter increase to periods, Excluding was of of revenue of effects $XX.X the adjusted an adjustments

quarter Our gross was XX.X% XXXX. of compared the second second quarter margin for in the to XX.X%

asset same adjusted reports quarter for acquisitions gross delivered and to XX.X% the XXXX. excludes of with to which was for prior our periods, effects revenue compared amortization the in Our in intangible the margin, XX.X% period associated test related

of to by of impacted amortization be GAAP our remainder acquisitions with associated gross negatively continue discussed, recent intangible the assets margin will XXXX. we for As

$XX.X compensation. three the quarter last personnel general higher XXXX consideration selling, for administrative $XX.X head in months to XX, operating stock-based compared in expenses commercial our team contingent the net Higher Cernostics including acquisitions costs quarter million For of to costs 'XX the and million also June the of return to expenses, events, quarter Total was million our in-person June higher higher ended reflect and associated meetings and year. business the XX, XXXX. rates. and compared primarily $X.X increase XXXX. mid-XXs in of increase expansion through salaries, attributable were through AltheaDx marketing including of remainder million and the with This to for to increased travel, second and of the The the events. personnel conventions and pay count bonuses dermatology-facing and expenses increased value marketing sales XXXX, XXXX a cost in reflecting sales adjustment fair have of training of continuing and April our by Personnel $XX.X same our included customers sales December and ended expenses costs, of

compared about expanded to cost expansions with earn-out expense in studies. changes support million will revenue of XX, and $X.X Further XXXX, and months acquired of in to compensation have for is ended related to after and in gain which the pay. the IDgenetix liability XX, and valuation amortization in stock-based April of to and TissueCypher laboratory in attributable increase to intangible also million tests, and clinical to and increase and increased increased XXXX, R&D for costs, amortization June R&D count personnel the of higher This higher the personnel not Cost December salaries, XX, head the head $X which and million of This our XX, or also count bonuses allocated count costs, any vary $XX.X sales, the is to June in XXXX, changes primarily salaries the attributable the regarding which higher June to to expanded increased higher we attainment for XXXX, $X.XX head attributable XXXX. as is attributable ended on ended primarily three respectively. three assets discussed ended expenses acquired Melanoma, is increased activity, Cernostics quarter is remeasurement to contingent we is through rates. during compared expense sales to to pay of XXXX, volume acquired as expand for periods of which and intend two stock-based the to Cernostics half of degree, million increased the testing as to compared though intangible Cernostics related test and though wages commercial million attributable by costs, XXXX to of diluted for to of to primarily our May in second due team quarter among marketing higher higher months also million XX, expect operations, myPath outside developed head second related quarter $X including assets, expenses million supplies which XXXX is XXXX. in of second We quarter fair in count sales, compensation. to XXXX, reflect three June increased XX, laboratory higher primarily expect compared in roughly by and the increase related in in increased acquisitions sales expense, personnel June ended ended of $X.X of growth, territories stock-based Operating cost the our $X.X of our exclusive technology AltheaDx. quarters. higher our June volumes. months SG&A, second expenses three and The third-party of to AltheaDx compared including administrative for costs that higher of quarter consideration by assumptions months functions, as higher payments due value well projections with our higher or XXXX support we by XXXX, of reflects also $X.X administrative offset Total future change depending services, results. reflecting share costs quarter-to-quarter, Derek months increased and the personnel to of reflect months team cost The most the rates certain include the loss I attributable three increased acquisitions the additions The earlier, expenses in General and to reiterate including the this likely for compensation commercial a totaled XXXX. from acquisition and management's connection per could and personnel milestones three

income months million ended of a to XXXX, recorded on attributable XX, resulting three June to was in $X of for deferred taxes. reduction AltheaDx. tax Moving assets valuation tax our acquisition the a benefit We allowance which primarily our from

$X.X of million, million million. in depreciation which and of compared operating period in Basic net was to increases was loss loss for and XXXX. in second fair loss months share $X.XX share of were XXXX. $XX.X share per contingent six million and amortization ended loss the second change primarily share second per to $XX.X in EBITDA the XXXX, quarter net attributable a the the was used of million, accounts in net million the $XX.X of was a quarter million of and $X.X to the second compared million $XX.X for for for of XXXX of second activities stock of Adjusted and of million $X.X $X.X and basic Our quarter compared expense the Net $X.XX to of diluted diluted by compensation $XX.X consideration the non-cash negative of value for $X.X million, cash XXXX. $X.X negative in was comparable XX, June quarter income a partially loss offset the quarter deferred receivable million taxes

that by at operating XX, reach million. had $XXX momentum, Finally, our we cash We cash we June believe XXXX, current neutrality with XXXX. of flow cash will equivalents and

year we with assessment our environment. business. focused in long-term changes our our of growth the factors XXXX cash As an stated, necessary is we the macro includes on alignment and the This mid growth make focused Derek. to balance our I'll strategy, sheet, in end needs any investment of I'll now well portfolio call assess based needs of clinicians. use focused and today remain continually as we meeting on for believe saying that by of patients strong the we positioned based turn we're tests, on back and investments uniquely to will over diversified

Derek Maetzold

as we we who where call that position. of half who combined for are years of today improving to Thank team. you, Castle our again summary, by entering In like if individuals be of with us and those Thank would have for are and you I Castle your We we believe we're volume the test continued thanking in record XXXX not strong to revenue, home. and for those second interest team, efforts Castle. many conclude delivered comfortable the Frank. I those weren't to been their the well the in another them with quarter a newer it lives who patients serve. thank individual would we for the commitment as

take questions. Now we'll your Operator? be to happy

Operator

The question Instructions] Stephens, [Operator first proceed. comes Carrico from Inc. of Mason Please

Mason Carrico

questions Hey, for the Thanks here. guys. taking

to SCC on circle back the wanted reimbursement Just commentary.

just Sorry seems bouncing for could catching between for they're It all, few paying you not But tonight. commentary it again? I'm that Novitas like through walk it. a

rate. -- there this the additional would are percentage you of risk currently gave or you a draft away be high-level really brought You But going paid is on? reimbursement high-level commentary any a what there But getting to up And helpful? LCD. also tests

Derek Maetzold

Good Sure, here. Derek Mason. hear to is This you.

written I got your questions here. I think down

over payment breakup. we've a age with it individuals from under So plans, Medicare of or two which have make of payers, Advantage XX, right? the got of are categories really major We so kind Medicare XX XX perspective, kind and

think of DecisionDx-SCC. we're rapidly we'll volumes the in and -- obviously growing be still for terms I quite

So might the ratio change.

may that years cell as diagnoses think But U.S. up age. I up are age XX running the higher. XX, north XX% a of XX in about patients age. bit squamous background, the we're years of it average end is setting than more of And of of

published We tend tend be data, or with cell based right. feels just older. to about good is be high-risk the that carcinoma younger individuals -- to to honest, So have upon squamous don't a on be handle

About a melanoma XX% Medicare higher breakup. little less in being the and standpoint or from that, greater a terms that's than vantage Since eligible the remaining test. favorable with our Advantage of in Medicare being a to so in So second claims paying for, than been nearly I Novitas we medical second completed probably quarter. early all quarter, think, of review the date the the we've

a we So validated occasionally of we fairly you additionally quarter we -- activity. get And from age. previously do had insurance we full for that's people with And assets years as private know, some clinical of have commercial payers because do paid bill use. less than XX

the So the to the for cover to that's that number trends one Mason? can and or early of over, that. reimbursement -- accrue we Does questions

Mason Carrico

can to Yeah. covers more, just supporting but maybe team few some here, offering. start derm outside thoughts expanding up of you on paid I to And more? shifting And the I off-line. expecting missed CDO the That economics but may legacy sorry I'm the the have it on the you incentivize size initial it. one if test, team territories. some the now follow pushing sales SCC test again, to of Thanks. are a to that are follow-up start And your more I SCC get starting

Derek Maetzold

Yeah.

provided right So guess would now. you details numbers exact two say. we we've I expansions, through working we're -- because different announced are the Haven't

three when on started in base. sales have test dermatopathologists out individual activity. test of then sales three clear to a two think, an that focused As I is folded pleased it's individuals we mid-XXs, introducing one XX and or we That bag. you been the educational customer launched a the back or may in. three really mid-XXXX, to And XXXX, November not And different really dedicated us we or of, to sales went recall, reasonable difficult that DiffDx-Melanoma individuals quite while the uptake, to in predominant with group force we getting within focused of what's with have leaves around we small, from sales dermatology XX tests products just our as when adoption out XX

on We'll to. that that and really course, predominantly making our predominantly and and combination small, over on sometime to support forward will DiffDx-Melanoma quarter Melanoma adequate But a the focus SCC point. occur, able myPath test have the are our dermatopathology out to test will for and myPath be group we we on it's Melanoma predominantly So presence going hiring splitting sure of third forward. and communicate DecisionDx-Melanoma test. call back to dermatopathology appropriate we dedicated of the And that DiffDx on have as I think, look and also,

So we should begin that -- second impact the to in year see of the end next on thinking. quarter maybe our first is the

obviously forward. cell structured the a to and On of dermatology lets out team go dermatology combination carcinoma and squamous for the of expand We'll rest more the -- the us of what now melanoma that test it test going the does in we the fashion is and forward. XXX% team quarter the focus on needs a as kind assess fourth see how third and

with would also we're by plus Medicare, day the expanding as expected resolved momentum well. of sales to the that of although trends gastroenterology the first liaison kind quarter, and saw based the with in the coupled the upon plan are that go second still the force quarter -- early, reported second our medical is the team. granting make team having growth to first rule science We ADLT we we close and quarter, we our saw, quarter We sales expand which ahead status, from of XX that quite But course. decided volume over call, that we

Mason Carrico

guys. of a makes That sense. it. Thanks Got lot

Derek Maetzold

you. Thank

Operator

Thank you.

of from Please Baird. Catherine comes proceed. question Next Schulte

Tom Peterson

This the you TissueCypher and if an get here. just anything a maybe little for to better is I hey Peterson Yeah, as Catherine. on there get But I repeat commercialization a bit want guys. Joined so to apologies Tom late well, look. as update stick on

Just us of Momentum give to what's what you're from early be providers? be solid. these any from here on could the getting But feedback sort that adopters if seems feedback you of kind would pretty great.

Derek Maetzold

of Sure. up January, Qualitatively, which had with with force, out territories because we have give experience started quantity course, most so I qualitative you, any trained the XX of companies. to gastroenterology other in only, prior don't sales

call So be they the a a TissueCypher a they going say, people had who sort physicians you in quarter I kind largely they that's quarter oriented but slightly different while could first versus, test was GIs We of pharmaceutical to of knew training, a had educating I certainly. And that amount or a diagnostic knew, reasonable some new to about getting guess -- of and a communication of device speaking product. think, to point. say,

quarter that XX-day also address going old we that, end quarter, rule, with billing were which of the had first by And Medicare be it resolved CMS Medicare first We would to into knew which practice was. the still the this we the assuming with policy affects that hospitals. work to

were, we seeing very to second looking pleased with the what or between very, month-on-month quarter a we've So a quarter. the trends look seen even like on what far. standpoint, so And planning really basis will versus first forward we're on

that's some esophageal of U.S. cancer. sort is Barrett's low-grade would Barrett's the of on most But grade an sort work most the of years the dysplastic on high-grade non-dysplastic surgical a and or large, So the that dysplasia with are high to The their the a grade. severity and or concerning to risky significant low-grade lifetime the from grade. -- many who are be dysplasia higher is of marketplace quite patients in cancer so benign of patients in the there's diagnosed of Barrett's high U.S. generally, the non-dysplastic sort all to offered there the high-grade is terms esophageal and this patients proportion of all -- basis, if the progress that to high-grade are standard in that's patients. well. people, of of for high-grade, less at so, is patients common esophagus on go group, so that a with And of the feedback, with practice some low risk group every a But as of -- therapy, usually the population, esophageal Then disease, payer sort XX% sort them. indefinite, dysplastic because very as non-dysplastic to for of there are therapy. from ablation believe, focused there or -- after in group they has form to pool because three system called progress standard goes risk five entire the backdrop, And patients dysplasia we grading the actually is many as Barrett's diagnosed eradication And to esophagus all maybe bulk today rescoping the rebiopsing there's into but the is sort been the or low. because see fall where of this to to dysplasia

patient ones as that's And patient itself bad non-dysplastic those Barrett's benign pathology still to fairly XX% And that the so have we what this period. esophagus for are heard where represents population that is trying really back is our sweet is which spot because group. the about we're the the marketplace find a test from this that biology masking really TAM, observation of that's

one which and the matches was -- of research the summer that's fall feedback So the market seen, XXXX. and in documents we've that which

that of are to what marketplace which a support XX clinicians being value spot about standpoint, Barrett's esophagus X the sweet encouraging where very of the seeing as is from exactly saw, patients live. see So test we it's

that's good. So

figure quite encouraging American practices I clinical a they other focused but or TissueCypher maybe the biopsy a harboring where non-dysplastic have for to Gastroenterology two TissueCypher disease them or they because is more positive sampling already very aggressive that trying year error were And that non-dysplastic again, The technologies new esophagus were their Barrett's have biopsied best non-dysplastic patients out, value terms included in high their as their overview shifted this for where Xst published the very, practice to disease July a what months, was, this of Association because they of of in and on you're I maybe just the low of had best they that area they the waited grade. month? in After grade update. in the on test was of review -- review was of was on X the

early marketplace part So gastroenterology base us encouraging our or become, grow the diagnosed several of next should that's and opportunity. really a the and of customer to course perspective, test carefully and become the over the newly appropriately up very which years -- from to cautiously patients. and be will this workup to educate of it's that what the of part to is core And our

Tom Peterson

of to acquisitive priorities the then nine balance balances a forward? the Great. That's should And the Thanks sheet, flow and I think XXXX, capital operating XXXX feel over trying good. year, new higher balance Great. review. but XX Frank, it's I to beyond 'XX. for cash Okay. the environment. general forward? months last the following you know of guess kind by maybe interest we spend more allocation do and months going about on neutrality the around of Thanks. think cash how period an more investment just focus rate a hear And good how to more about reiteration and going cash

Frank Stokes

Sure. Yeah.

So perspective. are we sheet we're a where with very comfortable from balance

that advance priorities products. capital Our pipeline continuing remain allocation and of for supporting products on-market to our our

I the think of I think perspective, a that's strategic priorities. from down capital list

excited now have And Castle. those pipeline And the capital going to programs. what those in and so we're about is sales in advancing that the focus here bag where we're at and that's pushing we

Tom Peterson

Thanks Great. much. very

Operator

from comes question Puneet of next Securities. Souda The SVB proceed. you. Please Thank

Puneet Souda

the Yeah. Frank. Hi, Derek, taking for Thanks questions.

that And one outline mean, DecisionDx-Melanoma is the -- I well the growth is you AltheaDx full guide? guide for for guide. volume are raise really for as raise. is first much what in year? you guide the The the you good quantify to of can see But can how on and assuming

Frank Stokes

break don't you're Hope doing well. product. revenue out Puneet. by Hey, We

really is the just guide portfolio. of inclusive the So

in areas. said seen for driver with three of primarily year. dermatological all be we product you Derek in therapeutic his will revenue traction that very -- melanoma As cutaneous opening portfolio this we've our were expect, as But primary the remarks, the and our be pleased will

the pleased out we aren't breaking half. guiding to or the the through But very volumes. about we're excited So and were first back we half, with volumes

Puneet Souda

Fair. Okay.

are commercial of that your the the to to for of efforts growth? And terms In product should product model of payers, ASP what given some where overall your ongoing? the given that how think volume the DecisionDx-Melanoma significance is for and are about we that today,

Frank Stokes

Yeah.

team have access. groups. that They're melanoma a group that's of those payer the know, our we good focused in we it all with for wealth do landscape commercial have continues call the to and around and companies As But technical the to managing be that for tests market a Puneet, reviews particular. we our very you -- is the sector, challenging medical groups data in explaining

unfortunately, test? as to that every time, well. So we that all of It's come How see believe get and by does we for this the much progress. longer with we It's it progress is They process. evidence are care talk is hard, to we're of And to that confident just quarter, we very there. make not got not how head-to-head continue at we And in -- -- unfortunately, it's very evidence, that most it beneficial not we a day. patients? certainly I to the we questions think the all, quarter a But people does tend will to physician work very -- plodding great they're overwhelming. payers matter agree. the the and the And landslide-type team view much use a very is a their a we And is, have of body your doctor this and effort.

Puneet Souda

much. avenues? what last the call sort for ADLT test? Thank Okay. a this should number think should we one about how your, of for for there? how it. ultimately, think for about I Got is potential But on think expectation per just test. we other you the $X,XXX on an then ultimately or I And And gave SCC. mean, so ASP you

Derek Maetzold

Sure.

was following requested. was we medical that review price the determined $X,XXX So by the I that -- think Novitas

modeling I think ADLT model, under X% believe will sequestration CMS from into price a do be the forward safe for our a near fees that that in qualify standpoint, to test going less the So a would We put status regulations. term. DecisionDx-SCC

granting -- not though, the is that know, a by you acknowledgment is or -- Castle. As of of an CMS, follows that evaluation a

as that's in the evaluating timing. we've bake term. wouldn't anything across and review that we'll in I of for to ADLT long companies as seen different kind standpoint, a timing way From feel the that status we're experiences we But So opportunity, ADLT bet can go. appropriate with an you proceed short as

will as as occur early Some of XX them days.

place. as with a think, awarded understand the with of that in March that will having quarter and we review a first at more January took end also in here. DecisionDx-UM, made about of would March ago was few status us as For better But cycles status year group. the that although a in years the couple instance, of was well or TissueCypher, 'XX at maybe we application ADLT submitted year turn. two, Maybe talked earlier this were cycle the in the and first process for in 'XX that us CMS I least the It the forward process take -- going

So hope covers the background. that I

Puneet Souda

again congrats and Thanks the No, super helpful. Yeah. on quarter.

Derek Maetzold

continued for to Thank want in today Biosciences. you. This joining and you call. quarter thank for concludes again your our XXXX earnings interest I second us Castle

Operator

participation. Thank conference concludes for you call. your the That

You disconnect may now your lines.

Castle Biosciences (CSTL) 12 Aug 222022 Q2 Earnings call transcript